More Proof That the Democrats Ruined the Economy

Jim Yardley at American Thinker gives more details on the Democrat melt-down of 2008, including a graph of real estate prices.  Yardley explains how the subprime mortgage fiasco, which was forced on banks and morgage companies, and the graph shows the resulting spike in home prices that resulted.  Yardley writes:

Claims of racial discrimination were frequently aimed at banks in the mid-1990s by community activists who, through judicial actions or by producing demonstrations by irate citizens, embarrassed banks into lowering their lending requirements to the point where, in common parlance, banks began issuing "sub-prime" mortgages. In an effort to both protect the financial integrity of local community banks and provide access to enormous amounts of cash for mortgages, Congress instructed Fannie Mae and Freddie Mac to purchase such mortgages from the original lender, returning the original lender to his original state of liquidity.

Fannie and Freddie then offered institutions such as Lehman Brothers and other major Wall Street firms a chance to "bundle" these mortgages and sell derivative securities, with their value basis predicated on such bundles.

More about the Democrat-engineered meltdown can be read in Mark Levin's book, "Liberty and Tyranny" and in Thomas E. Wood's book, "Meltdown."

The meltdown not only wrecked the economy, it provided the duplicitous mass media and the Democratic Party an opportunity to benefit from their own misdeeds.  The bubble burst in the last few months of George Bush's presidency.  In an extraordinary display of bad faith, the Democrats then blamed the meltdown on a lack of governmental oversight, the machinations of Wall Street and the Republican policies of George W. Bush.

Read Yardley's article:  So Obama Inherited a Mess, Did He? From Whom?

It Wasn't Bush That Caused the Melt Down: It Was Democrats Forcing Banks to Make Bad Mortgage Loans

The Daily Caller today has an article on a theme I have discussed several times:  the melt down of the financial sector and the resulting recession was caused by the subprime mortgage fiasco.  The subprime mortgage fiasco was a project of the Democrats.  Beginning with the Clinton Administration, the Dems began  suing mortgage companies and banks for "racist" red-lining:  not giving mortgage loans to minorities in proportion to the latter's percentage of the population.

The so-called "red-lining" wasn't racist or personal.  Banks generally loan money to people based on their credit rating, their income and their ability to repay.  Down payments on mortgage loans are usually required so that the borrower has something to lose if he defaults on the loan.

All of these safeguards were dispensed with by the Democrats, but they assured the banks and mortgage companies there was no reason to worry:  FHA would cover the loans, and as everyone knows, real estate prices always go up.  The easy loans would allow minorities to participate in gains from real estate appreciation.  However, once subprime mortgages were made available to minorities, they were made available to everyone else as well.

To make a long story short, the easy mortgage money caused real estate prices to rise substantially and artificially, creating a "bubble."  When the bubble burst, home values plummeted and thousands of subprime borrowers simply walked away from their mortgage, which now exceeded the market value of the home.  Banks were stuck with loan collateral that was worth less than the outstanding principal.  Banks, mortgage companies and other financial institutions, including pension plans that had invested in mortgage loans, went bust.  Banks failed by the thousands.  The shockwave through the economy resulted in credit drying up overnight and many non-financial businesses failed as a result.

And the Democrats did it.  Not Bush, who months before the crash warned of the bubble and the need to reign in FHA's easy credit, who held committee hearings on the subject with key Democrats.  The Democrats would have none of it, arguing that real estate would always go up, so no problem.

This week I was disgusted to hear Barack Obama's lying words that it was Republican policies that "caused the problem in the first place, and got us to where we are now" (I am paraphrasing from memory).  No, it was Democrat policies that got us here.

Now the Daily Caller has done some research, and learned that Barack Obama was one of those responsible for creating "the mess that got us to where we are in the first place."  As a plaintiff's attorney in Illinois, he sued Citibank to force them to make risky loans to minorities in Chicago.  The Caller states:

President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.

When the bubble burst, Citibank suffered substantially from the bad loans Obama had forced them to make.

As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.

It pains me to hear people blame Bush for a problem he didn't cause and tried to avoid, and then argue that we should elect or reelect the actual culprits, the Democrats and Barack Obama, who indeed are guilty of the policies that "caused the problem in the first place and got us to where we are now."

Read the Daily Caller article With landmark lawsuit, Barack Obama pushed banks to give subprime loans to Chicago’s African-Americans

Also see:  Subprime Housing Bubble:  Obama "Vampire" Socialism Built It.

Liberal Eleanor Clift Lies Like Hell About the Subprime Mortgage Meltdown; is Refuted by New York Times

One of the most glaring examples of Democrat economy-ruining policies is the subprime mortgage meltdown.  The meltdown brought on the worst recession in my six decades of life.  It was caused by the Clinton Administration forcing banks and mortgage companies to make bad home loans to minorities, which caused a real estate bubble that eventually burst, causing thousands of banks and mortgage companies to fail, thereby spreading the failure throughout the financial sector like a tsunami of bad debt, uncollectible because the loans were collateralized by real estate worth less than the loan balances.

The Democrats have been acting like contortionists ever since, in order to avoid taking responsibility for the disaster that they caused.  Now Eleanor Clift, well-know Democrat propagandist, has asserted on television that it was Wall Street who caused the meltdown, not the bad loans through Fannie Mae and Freddie Mac, who were only innocently following Wall Street down the road to serfdom.

This is B.S. and doesn't square with the recorded facts.  Newsbusters proves that it was indeed the Democrats, through the lending agencies Freddie Mac and Fannie Mae, that planned, executed and carried off the disaster.  Newsbusters quotes articles from the New York Times, circa 1999, that explains the Dem plan to bring home ownership to minorities, through relaxed lending standards at Freddie Mac and Fannie Mae.  Clift is shown to be a liar.  But you knew that.

Read the Newsbuster's article here.