Diary

Financial Reg Bill's Dubious Advocates

There was a quote on the web recently that was allegedly from Democrat US senator Christopher Dodd of Connecticut. It said that Dodd had said that requirements that potential homeowners put 5% down on loans was wrong because it “would restrict home ownership only to those who can afford it.”

 

This quote was a satire, but it sounds as if it could be true. Because humor always has a grain of truth in it, and some people actually believed that Dodd could have said this because this is really the way a guy like Dodd thinks.

 

Remember Dodd is the Democrat who was forced out of his re-election bid this November over a sweetheart mortgage deal that he made with Angelo Mozilo at Countrywide Financial. And so in his own way, one-on-one, Dodd is the face of the economic collapse which was caused by trillions of dollars in sweetheart loan deals, particularly between banks and poor people, forced by the US government under the Community Reinvestment Act, which is supported by Democrats like Dodd.

 

Remember Chris Dodd, who was enraged about the April 6 stock market plunge, accusing everyone in sight of causing it? First he started ranting about high-speed trading programs, then about someone with a “heavy finger” entering the wrong number in a computer trade.

 

A guy like Dodd is always on the attack, despite his own dubious status. Because bad people criticize others to get the spotlight off of themselves. Meanwhile, nobody has been able to explain the April 6 drop. But Dodd sure wanted to find out. Boy, did he ever.

 

Now  Dodd, the Senate Banking Committee chairman, was cheered at the early-morning passage on June 25 of the new compromise House/Senate financial regulatory reform bill. Democrat Massachusetts congressman Barney Frank, chairman of the House Banking Committee, also was cheered. And here is what Dodd said after the cheering stopped:  “It took a crisis to bring us to the point where we could actually get this job done.”

 

Indeed, a crisis caused by people making sweetheart deals like Chris Dodd. And remember Barney Frank, who said over and over  during a period of more than five years that Fannie Mae was in great shape while collecting big campaign contributions from Fannie?

 

Then Fannie collapsed first in September 2008, leading to the current crisis in a series of falling Wall Street dominoes.

 

Then these two frauds – Dodd and Frank – were cheered over the passage of the financial reform bill.

 

And after passage, Dodd said that we will find out how the bill works after it is enacted! Sound familiar? Remember when Democrat House speaker Nancy Pelosi said March 10, 2010 about the  health-care bill… “But we have to pass the bill so that you can find out what is in it, away from the fog of the controversy.”

 

This is the insanity of the hard left in America today, i.e., let’s pass a law and then find out what’s in it. This is Soviet-style governance.

 

Here is an excerpt from npr.org describing the financial reform bill, with the controversial phrases in bold:

 

‘The legislation touches on an exhaustive range of financial transactions, from a debit card swipe at a supermarket to the most complex securities deals cut in downtown Manhattan…. In its breadth, the legislation would affect working class homebuyers negotiating their first mortgage as well as international finance ministers negotiating international regulatory regimes… The compromise did not address any restructuring of the government-related mortgage giants Fannie Mae and Freddie Mac. Republicans tried to shift the debate to those two, to no avail…. The government took over Fannie and Freddie in 2008 after they suffered heavy loan losses in the housing crash. Their collapse has cost $145 billion and the Obama administration has pledged to cover unlimited Fannie and Freddie losses through 2012, lifting an earlier cap of $400 billion‘ (end of excerpt)

 

So in other words, every financial transaction now can come under government scrutiny. But what about Fannie and Freddie, the corrupt government agencies that caused the collapse? No problem there. No oversight. Despite the fact that George Bush and John McCain were seeking reform of Fannie and Freddie for years.

 

Former Fannie Mae chief Franklin Raines, a prominent Democrat, was accused of cooking the books to the tune of billions of dollars, and took away more than $90 million in salary and bonuses from the agency. Yet he has not been prosecuted in any way.

 

Later in its article, npr.org reported on new regs for derivatives:

 

‘Derivatives are complex securities often used by corporations to hedge against market fluctuations. But they also have become speculative instruments for financial institutions, the most notorious of which were credit default swaps that hedged against loan failures.’ (end of excerpt)

 

Yet why are banks hedging on loans anyway? Don’t they scrutinize borrowers already?

 

Answer: No, that was in the old days when ‘conservatives’ ran banks. Today the government is forcing banks to make so many suspect loans in the first place that they have to hedge their bets.

 

Judge Andrew Napolitano of Fox News says that the new financial regulatory legislation violates the Constitution’s 4th and 5th Amendments by allowing the government to inspect the books of private firms without a search warrant; and allowing the government to seize property without due process or fair compensation.

 

This legislation is going to be very problematic and even dangerous, and is another step in the wrong direction for America. It should not become law. 

 

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.