“We are in the midst of a serious financial crisis,” President Bush said on Wednesday evening. “The market is not functioning properly.”
Warren Buffett called it an “economic Pearl Harbor”.
It has been called a “meltdown” and a “once in a century” occurrence.
But that means it happens once every hundred years, and so we have to deal with it. And we will. The question is how.
There are serious issues here, but that hasn’t stopped politicians from taking advantage. When Senator McCain said he would suspend his campaign and skip the Friday night foreign policy debate to return to Washington to work on a solution, Democrats called it a desperate “hail Mary” move, impugning the integrity of a man who refused an offer of early release from a prisoner-of-war camp because it was not his turn to leave according to military protocol.
In other words, America first and McCain second?
Barack Obama went on an unseemly attack against McCain, accusing him of ducking the debate. Ditto Senate majority leader Harry Reid. Yet Obama at the same time was calling the crisis “as serious as any we have faced since the Great Depression.”
He continued: “If I can be helpful, I am prepared to be there (in Washington) at any point.”
Obama indeed ended up in Washington on Thursday afternoon after President Bush requested his presence at the White House. Looking miffed and unaccustomed to his seat at the end of the table rather than standing in the spotlight with his teleprompters, Obama certainly must have realized that McCain had been right, that perhaps there was something to this silly America First thing.
And he certainly knew that his own politicization of the crisis had failed.
No wonder he looked mad. In addition to the fact that he was losing valuable prep time to cram for the possible foreign policy debate in which McCain could ream him with no preparation at all.
There are many questions about this bailout, which is being called “a loan” and “a rescue”. Republicans are rightly concerned about its sheer size. And McCain was right to go and have a hand in how $700 billion was going to be spent despite assurances that the government actually could make money by re-selling the assets at a later date for better prices.
And there are many breathless media questions about why the government should rescue firms that made bad loans. But never do the same media inquisitors wonder how banks ended up in this mess in the first place, or how the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac) came to buy and become responsible for so many bad loans.
It is simple. After pressuring banks through decades of legislation to make loans to people that banks traditionally, and rightfully, had considered unqualified, the government set up Fannie and Freddie to buy (assume the liquidity of) those loans after the banks made them. So banks could make the loans and get rid of them at virtually no risk. Fannie and Freddie became “the banks”, assuming all the risk, as did some of the big Wall Street firms.
In other words, the government forced the banks to make the loans and then ended up forcing the taxpayer into guaranteeing them.
You have to watch these Democrats. This was just another huge government welfare program with a neat-sounding name like Fannie Mae. If the unqualified buyers somehow managed the payments, they got the house. When they flopped, the taxpayer got stuck with the bill. And unqualified buyers spread into the middle class too because, hey, it’s a party.
The people who made the laws like the Community Reinvestment Act (1977) and dreamed up Fannie and Freddie are the same people who have benefited financially… Democrats. They looked like the good guys helping the poor into home ownership when in fact they ended up looting the system – Franklin Raines ($90 million from Fannie), Jamie Gorelick ($24 million) James Johnson ($21 million) and the rest.
President Bush summed it up well in his speech. The main culprit in this whole crisis is two words – easy credit.
And who has been urging credit-for-all for the last millennia?
Socialist theory, that’s who. Everyone deserves credit under the redistributionist banner just like any poor person deserves a handout, no matter their behavior.
Today, something refreshing is happening however. Some banks are actually advertising themselves as having “conservative lending standards” in order to promote their image. In other words, “conservative” is now a positive buzzword after decades of malicious connotations conjured by Democrat politicians, social activists and the media.
“Think of all the companies that do the right thing every day,” said far-left Democrat representative Dennis Kucinich of Ohio, implying that good firms too will pay a price for this blowout.
Yes, Rep K, all those companies that did the right thing according to old-fashioned “conservative” accounting principles which you, Franklin Raines, Barack Obama and the rest of the Mortgage Mafia did everything to undermine.
The benefits of any bailout plan must “go to homeowners”, said Kucinich.
What that means is that he and his friends like Democrat Maxine Waters of California plan to load up any bailout with more and more handouts of cash to help even people who simply are having trouble paying their current mortgage. In other words, let’s help everybody.
Does not this sound kind of like the “easy credit” that got us into this mess in the first place?
Waters called for “tough oversight” in any new mortgage system. Yet her Democrat friends allowed their own frankensteins called Fannie and Freddie to collapse even after Bush and McCain had repeatedly warned about the problems.Meanwhile the House on Wednesday passed a $25 billion loan authorization bill for the auto industry that was buried in a stop-gap spending bill that passed 370-58.
Yet that is simply a way to pass onto the taxpayer the enormous cost of bloated union contracts that are killing the auto industry.
Why can’t the unions give back to save the auto industry? They are the ones who have been milking it since World War II.
And who do the unions support 99%?
Yes, those same Democrats who trashed Fannie Mae and who ran Wall Street into the ground buying bad mortgage securities.
Wall Street?! That couldn’t be! Wall Street is the playground of the Republican Rich, is it not!?
No, friends, Wall Street today has many, many liberal players. The former chairman of Goldman Sachs is the very liberal New Jersey governor John Corzine. The former chairman of recently-deceased Lehman Brothers is Obama adviser James Johnson, who once was CEO of… recently-deceased Fannie Mae! Lehman Brothers employees gave campaign cash overwhelmingly to Democrats like Hillary and Schumer. And on and on
And meanwhile Christopher Dodd, Democrat of Connecticut, chairman of the Senate Banking Committee, was the #1 recipient of campaign contributions from Fannie Mae.
Who was #2?
Barack Obama. The man who said “If I can be helpful, I am prepared to be there (in Washington) at any point.”
Perhaps Obama should stay on the campaign trail so that we can fix this mess once and for all. And perhaps he could ask a few hundred other Democrats to join him.
Please visit my website at www.nikitas3.com for more common sense.