However, "red-lining" was a myth. The people who were being denied loans were those with no credit and no way to repay. Nonetheless, what a wonderful opportunity for the Democrat Party to press its creds as the party who protects minorities from alleged "racism"!
Christopher Booker of the U.K. Telegraph summarizes Obama's conceit on the matter, quoting from his State of the Union speech:
“The house of cards collapsed,” he recalled. “We learned that mortgages had been sold to people who couldn’t afford or understand them.” He excoriated the banks which had “made huge bets and bonuses with other people’s money”, while “regulators looked the other way and didn’t have the authority to stop the bad behaviour”. This, said Obama, “was wrong. It was irresponsible. And it plunged our economy into a crisis that put millions out of work.”Obama is the personification of Democrat dishonesty. They create a major recession through governmental malfeasance, then blame it on the victims of their own bad behavior, i.e. the banks and mortgage companies. Hence we have Obama promising to create a governmental "mortgage fraud" unit to investigate such matters. They ought to start with Obama himself. As Booker writes:
I recalled a piece I wrote in this column on January 29, 2009, just after Obama took office. It was headlined: “This is the sub-prime house that Barack Obama built”. As a rising young Chicago politician in 1995, no one campaigned more actively than Mr Obama for an amendment to the US Community Reinvestment Act, legally requiring banks to lend huge sums to millions of poor, mainly black Americans, guaranteed by the two giant mortgage associations, Fannie Mae and Freddie Mac.The recent outrage against Bank of America underscores the cynicism of the Democrats. Bank of America was forced to pay $335 million to settle the government's charges that its Countrywide lending unit engaged in "predatory lending" practices, i.e. convincing black borrowers to enter into real estate loans that they couldn't afford to repay. So Countrywide was forced to make bad loans to blacks by the federal government, and now is excoriated by that same federal government for doing what they were told. The Democrats create a mess, then require their victims to pay for it and take the blame. Disgusting.
It was this Act, above all, which let the US housing bubble blow up, far beyond the point where it was obvious that hundreds of thousands of homeowners would be likely to default. Yet, in 2005, no one more actively opposed moves to halt these reckless guarantees than Senator Obama, who received more donations from Fannie Mae than any other US politician (although Senator Hillary Clinton ran him close).
Read Christopher Booker's article today, "How I Woke Up to the Untruths of Barack Obama."
6 comments:
We are not in a recession. We are in a depression.
Barney Frank was the main individual responsible for the whole thing. One idiot caused a world wide economic slump.
The banks had nothing at all to do with any of this. Most of the banks now are just there to provide more money to the Feds as they rape them.
David, well said. Actually, there were several top Democrats involved but Barney Frank was indeed a top player.
On David's point ... I can't agree that the banks have no culpability. And to say that the Big Banks are now being raped, completely ignores QE! & QE2.
That being said I completely agree that a large causation of the disaster was the push for low income ownership, and maybe if that never took place the disaster would of never taken place. But from that point to where we got.... took some serious missteps by an over leveraged financial community. And as someone that works for a major Derivatives Firm that also has a Mortgage Backed Securities Arm, I know that there were choices. Our firm and many firms didn't get in trouble, because we made the proper risk management decisions. And it's irritating to hear these other firms defended and protected by our Federal Gov't when they made bad bets and lost. To me that is anti- free market and anti-capitalist as you get.
Ex Citigroup Chairman John Reed sat down with Bill Moyers for an interesting conversation. He is a person that understands the situation on a level that the talking heads don't. I think it's worth the time to view. Moyers also sat down with David Stockman (Reagan's Budget Director).
http://billmoyers.com/segment/john-reed-on-big-banks-power-and-influence/
On another note.... David looks to be a Doctor. Interested to hear his thoughts on what should be done with our Health Care System. I realize that's a wide open question. But with the Baby Boomers beginning to retire, it's something that will be a political issue from this point on.
"A government big enough to give you everything you want is a government big enough to take away everything you have."
Socialism DOES NOT WORK.
I wish Reagan was here to school
Obama.
See: http://www.youtube.com/watch?v=KBXQhs6kwYc&feature=related
As a rising young Chicago politician in 1995, no one campaigned more actively than Mr Obama for an amendment to the US Community Reinvestment Act, legally requiring banks to lend huge sums to millions of poor, mainly black Americans, guaranteed by the two giant mortgage associations, Fannie Mae and Freddie Mac.
It was this Act, above all, which let the US housing bubble blow up...
Yep.
And the Dems pretend now that they were not complicit in this economic depression.
pjm, I have long believed you are a liberal, a friendly liberal, but a liberal nonetheless who wishes to put a liberal spin on discussions here.
I agree with David, that the banks were not at fault whatsoever. So they may have invested in bad "derivatives," but derivatives of what? The value of mortgage loans? Other investments, like stocks and bonds? All investments suffered when the housing crash occurred, and so all or nearly all derivatives suffered as well. Pension plans went broke. Retirement funds were lost. But it all ties back directly to the Democrats forcing banks and mortgage companies to make bad real estate loans, first to minorities then to everyone else, which created both the housing bubble and the resulting crash.
I don't like Ron Paul all that much, but he predicted both the bubble and the crash several years before it happened. It isn't rocket science. The causes of the recession are clear.
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