Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson, Speaker of the House Nancy Pelosi, Majority Leader Harry Reid and other Congressional and Administration officials are meeting in Washington this weekend to administer what American socialists hope will be the final coup de grace to the American Capitalist system. Participants in the Socialist movement have been working tirelessly generation after generation over the past hundred years to bring about this day.
Beginning with the “Trust Busting” of Theodore Roosevelt, the first “progressive” President, and the stock market collapse of 1929, a couple of decades later, socialist have made steady progress toward their Karl Marx inspired goal of destroying our capitalist system and building a socialist utopia on the rubble.
Socialist policies have all but destroyed our industrial base, our educational system, our healthcare system, our social structure, and are on the verge of destroying our economic system. Each time government encroachment on the private sector creates a disaster, the solution offered is always more government involvement. The current financial disaster is no exception.
The hallmark of the socialist movement is to create chaos and then point to their opposition and declare, “They did it!” It seems to work more often than not. The meltdown of our financial markets demonstrates this tactic with a clarity that cannot be denied. An analysis of the development of the crisis shows without question that the root cause is socialist policies, not the capitalist system nor the policies of the Bush Administration.
There is widespread agreement among economists and politicians that sub-prime lending practices, prevalent among mortgage companies, is the primary culprit. A number of circumstances converged during an election year that virtually guaranteed the collapse of major segments of the financial markets. That they occurred during an election year made any sane thought-out remedies unattainable. Facts, mixed with and distorted by political rhetoric, rendered an objective evaluation of the problems all but impossible.
The rapid rise in energy prices, soaring home values with the corresponding rise in real estate taxes, the vagaries of adjustable-rate mortgages, and the stagnation of lower and middle class incomes stretched family budgets to the point they could no longer be sustained. Mortgage payments, the largest item in the average budget, simply had to be postponed or cut back in favor of survival. All of these, when objectively judged by the facts, are revealed to be the result of socialist policies.
The populist view of history as promulgated by the Democratic Party, the mainstream media and even, somewhat, by the McCain camp, is that the crisis caused by sub-prime lending was brought about by corporate greed and “eight years of failed policies by the Bush Administration”. The truth is somewhat different. An article in World Net Daily on September 20 is quite revealing in that it links to two articles written before Bush took office in 2001. One is in the Los Angeles Times, the other The New York Times, neither of which are conservative publications.
Both articles were written to praise Bill Clinton during the final years of his Administration. The first was an article in the Los Angeles Times dated May 31, 1999 titled “Minorities’ Home Ownership Booms Under Clinton But Still Lags Whites’”. The opening paragraph begins with,
“It’s one of the hidden success stories of the Clinton era. In the great housing boom of the 1990s, black and latino homeownership has surged to the highest level ever recorded.”
By itself, that would indeed be good news, but the article then goes on to explain the factors that gave rise to this phenomenon. By indulging in an obligatory swipe at the Reagan-Bush administrations, the writer undermined what could have been the best alternative explanation, the booming economy.
“But the economy isn’t the whole story. As HUD Secretary Andrew Cuomo says: ‘There have been points in the past when the economy has done well but minority homeownership has not increased proportionally.’ Case in point: Despite generally good times in the 1980s, homeownership among blacks and Latinos actually declined slightly, while rising slightly among whites.” He writes.
He then returns to his theme of praising the leadership of Bill Clinton.
“All of this suggests that Clinton’s efforts to increase minority access to loans and capital also have spurred this decade’s gains. Under Clinton, bank regulators have breathed the first real life into enforcement of the Community Reinvestment Act, a 20-year-old statute meant to combat “redlining” by requiring banks to serve their low-income communities.”
“The administration also has sent a clear message by stiffening enforcement of the fair housing and fair lending laws. The bottom line: Between 1993 and 1997, home loans grew by 72% to blacks and by 45% to Latinos, far faster than the total growth rate.
“Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system…”
“…In 1992, Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. …It [Fannie Mae] has aimed extensive advertising campaigns at minorities that explain how to buy a home and opened three dozen local offices to encourage lenders to serve these markets. Most importantly, Fannie Mae has agreed to buy more loans with very low down payments–or with mortgage payments that represent an unusually high percentage of a buyer’s income….”
“…But with discrimination in the banking system not yet eradicated, maintaining the momentum of the 1990s will also require a continuing nudge from Washington. One key is to defend the Community Reinvestment Act…The top priority may be to ask more of Fannie Mae and Freddie Mac. The two companies are now required to devote 42% of their portfolios to loans for low- and moderate-income borrowers; HUD, which has the authority to set the targets, is poised to propose an increase this summer“….
The facts presented by Ronald Brownstein in this article are indisputable and clearly point to Congress and the Clinton Administration as the primary causes of the eventual mortgage market meltdown. A later article in the New York Times dated September 30, 1999 was less slanted toward praise of Clinton and gives us a few additional insights.
“… [A new Fannie Mae program] will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — [it] will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
“…Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people
“…In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called sub-prime borrowers.
“…In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.
“…said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”
Keep in mind both of these articles were written well before George Bush moved into the White House. No one can honestly deny that the problem was inherited by Bush from the Clinton administration. It is also true that both Bush and McCain attempted to rein in the excessiveness of Fannie Mae and Freddie Mac but were prevented from doing so by socialist Democrats and their socialist leaning Republican allies in Congress.
It is imperative that McCain and Palin focus on these facts over the next few weeks instead of going along with the MSM version in courting independents and “moderates”. This will not help in changing the results of decisions made in Washington this weekend or the follow-up actions by Congress next week. It may, however, wake up some of the American voters encouraging them to vote some of the socialists in Congress out of office and give us a chance to begin returning the government back into the constitutional republic it was intended to be.
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