Now that president Obama has proposed stringent new regulations for the financial system, this is an encore editorial from www.nikitas3.com outlining the reasons that we do not need heavy-handed new regulations, but rather we need to restrain the Democrats and their policies, listed below, that caused the financial collapse in the first place:
The Community Reinvestment Act (CRA) of 1977, passed by a Democrat Congress and signed into law by Democrat president Jimmy Carter, forced banks to make mortgage loans to “low-income” people and forbade banks from ‘redlining’, a practice in which banks would not loan money in certain neighborhoods seen as risky areas. CRA eventually led to mortgages not only for “low-income” people but for “low- and moderate-income” people, which is the way that socialism always expands itself… incrementally. Most of these loan recipients had little, poor or no credit history, had poor employment histories and prospects, and eventually had high rates of default on loans. None of them should have owned homes in the first place, but should have remained renters.
Association of Community Organizations for Reform Now (ACORN) is a left-wing activist group that has accessed huge amounts of money from the federal government. Besides engaging in massive fraud in voter registration, ACORN has used pressure tactics like on-site protests and legal filings against banks that ACORN has claimed were not loaning enough money to “the poor”, leading banks to make trillions in bad loans to people who could not pay the loans back. Obama was closely associated with ACORN in the 1990s.
The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac) are government-sponsored agencies founded, run and staffed by Democrat liberals. These agencies for decades purchased the risky loans that the CRA and ACORN were forcing banks to make. Since these agencies were buying the loans, banks felt comfortable making the loans because the government (the taxpayers) then was assuming the risk when it purchased the loans. Trillions in bad ‘subprime’ loans are the spark that caused this whole financial crisis to explode.
The Clinton administration in the 1990s started to agitate for more home loans for poor people even after CRA. Between 1997 and 2001, Andrew Cuomo, Clinton’s secretary of Housing and Urban Development, advocated a system where poor people needn’t even have had an income nor a job (No Income No Job or NINJA loans) to get a bank loan that then would be purchased by Fannie and Freddie. Andrew Cuomo is the son of Mario Cuomo, the liberal former governor of New York state and a big-time Democrat activist.
Democrat US representative Barney Frank of Massachusetts and Democrat US senator Christopher Dodd of Connecticut, two of the most powerful people in Washington both said in public statements over several years that Fannie Mae and Freddie Mac were sound institutions. Frank said so as recently as July 2008. Yet both agencies went into conservatorship in September 2008. Meanwhile Republicans John McCain and George Bush warned repeatedly in public statements that Fannie and Freddie were not sound. Dodd also got a sweetheart mortgage deal for his personal mortgage from Countrywide Financial.
Robert Rubin, a director and senior counselor from 1999 to 2009 at Citigroup, one of the biggest banks in America. Rubin was Bill Clinton’s Treasury secretary from 1995 to 1999 and is considered one of the most prominent Democrats of the last 25 years. He urged Citigroup to begin investing in risky instruments, leading to its almost-collapse. In January 2009, he resigned from Citigroup saying he was “tired of it”. In other words, he wanted to get away from the mess that he himself had created. Rubin got more than $126 million in salary and bonuses during his tenure at Citi.
Bernard Madoff, the $50 billion financial scammer who ran the biggest ponzi scheme in American history, is a big-time New York City liberal and Democrat party donor.
R. Allen Stanford, an $8 billion Texas financial ponzi schemer, was close to the Clintons, Nancy Pelosi and the Democrat party. He financed a special event at the 2008 Democrat convention in Denver. Vice president Joe Biden’s brother and two sons have all been closely associated with Stanford business dealings.
Richard Fuld, a big-time Democrat donor, headed Wall Street investment bank Lehman Brothers and ran it into bankruptcy and collapse.
AIG, the crippled insurance giant, was founded by ultra-liberal New York businessman Maurice Greenberg. In 2005, ultra-left Democrat Eliot Spitzer, then attorney general of New York state, acting on his own personal anti-capitalist crusade against big New York financial interests, drove Greenberg out of AIG with false accusations of wrongdoing. Greenberg since has been cleared and has maintained repeatedly that the people who took his place did not know anything about running AIG, leading to its collapse.
Democrat US senator Charles Schumer of New York caused a ‘run’ on deposits at IndyMac Bank in California, leading to the bank’s collapse. Schumer publicly released a letter he had written questioning the bank’s liquidity, causing depositors to panic.
Warren Buffett, the richest man in America and an Obama voter, is a liberal who has supported all these left-wing initiatives like CRA. Ditto many left-wing multimillionaires and billionaires in Hollywood, New York City, San Francisco, Chicago, Aspen, Santa Fe etc.
Franklin Raines, Bill Clinton’s budget director, was chairman of Fannie Mae from 1999 to 2004 when he took “early retirement” after being accused of cooking the books to the tune of $6.3 billion. Raines left Fannie Mae with $90 million in accumulated compensation and bonuses based on the falsified figures. Democrats in Congress are declining to investigate or prosecute Raines.
James Johnson, Daniel Mudd and Jamie Gorelick, all big-time Democrat operatives, drew more than $50 million in salaries and bonuses out of Fannie Mae.
Tens of thousands of liberal university graduates and liberal business school graduates have joined the financial system, bringing their politics with them. (Chelsea Clinton works for a New York hedge fund.) These are the people who urged banks and Wall Street investment firms to become institutions of social engineering that hardly asked any questions before loaning people money, causing the housing bubble that burst. Because to liberals, everyone deserves credit, no questions asked. Had “conservatives” been in control of the banking and financial systems, this crisis never would have happened because most of these bad loans never would have been made in the first place. But the media and the universities have demonized conservatives for the last 50 years. Thus this crisis.
Federal Reserve chairman Alan Greenspan set interest rates far too low in response to 9/11, feeding a housing bubble. This shows the danger of allowing the government to set nationwide policies, rather than allowing the broad free market to set rates. Easy credit is actually worse for the economy than hard-to-get credit. George Washington said specifically that business must be regulated, but that the government never should set either wages or prices. Greenspan essentially was setting the “price” of loan money.
Labor unions have milked massive amounts of wealth out of the Big 3 car companies, driving Chrysler and General Motors to insolvency.
Democrat-dominated states like California, Illinois, Massachusetts, Vermont and New York had the worst, least productive economies in America even before the economic crisis hit. Meanwhile, the state with the best economy before and after the crisis hit is… George Bush’s conservative Texas.
Worldwide socialism in places like Europe, Canada, Japan and Australia have weakened those economies, leaving them with high unemployment and low growth and unable to help the world economy in the wake of the US crisis.
Barack Obama, Bill Clinton, John Kerry, Ted Kennedy, Dick Durbin, Nancy Pelosi and thousands of other elected Democrats nationwide adhere religiously to the ideology that created this collapse.
Please visit my website at www.nikitas3.com for more. You can print out for free my book, Right Is Right, which explains why only conservatism can maintain our freedom and prosperity.