More Proof that Nancy Pelosi is an Incompetent Fool / Barney’s Way

When you really need the assistance of others to further a particular goal, does it make sense to first INSULT those people and unfairly cast blame on them?

Of course not. This would be a stupid thing to do unless you’re the belligerent and bellicose Nancy Pelosi, Speaker of the House and general do-nothing. Today, Speaker Pelosi thought that a rambling, partisan, uninformed speech made prior to a huge vote would be A-OK.

Speaker Nancy Pelosi

Boston Herald: Boehner: Pelosi speech ‘poisoned’ GOP support

Meanwhile, let’s not forget a huge enabler of this whole mess who deserves alot more attention: bleeding heart Barney Frank (D-gay prostitution ring) whose economic illiteracy and blindness to multiculturalism is bleeding us all.

Rep. Barney Frank (D-Mass, gay prostitution ring)

Boston Herald: Better not bank on Barney Frank — He brought the (fiscal) house down By Michael Graham

Barney [Frank] and friends used the regulations of the Community Reinvestment Act to threaten lenders into making these loans. And banks, trying to meet Frank’s demands, expanded riskier lending schemes like subprime mortgages.

[...]

Lenders asked themselves, why should I care how shaky these borrowers are or risky the loans if a government-backed body is going to buy them up anyway?

The loans were made, the housing market bubbled, contributions from F&F flowed to Democrats like Chris Dodd and Barack Obama, and everyone was happy. Until they weren’t.

Without Freddie and Fannie’s reckless expansion, the housing bubble doesn’t happen. Without the implied promise behind F&F’s money, investment banks don’t dive into the derivatives market.

Instead, we did it Barney’s way.

Boston Globe: Frank’s fingerprints are all over the financial fiasco by Jeff Jacoby

Barney Frank’s talking points notwithstanding, mortgage lenders didn’t wake up one fine day deciding to junk long-held standards of creditworthiness in order to make ill-advised loans to unqualified borrowers. It would be closer to the truth to say they woke up to find the government twisting their arms and demanding that they do so – or else.

The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and “redlining” because urban blacks were being denied mortgages at a higher rate than suburban whites.

The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to “meet the credit needs” of “low-income, minority, and distressed neighborhoods.” Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this “subprime” lending by authorizing ever more “flexible” criteria . . .

All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices. A manual issued by the Federal Reserve Bank of Boston advised mortgage lenders to disregard financial common sense. “Lack of credit history should not be seen as a negative factor,” the Fed’s guidelines instructed. Lenders were directed to accept welfare payments and unemployment benefits as “valid income sources” to qualify for a mortgage. Failure to comply could mean a lawsuit.

As long as housing prices kept rising, the illusion that all this was good public policy could be sustained. But it didn’t take a financial whiz to recognize that a day of reckoning would come. [...]

Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that “these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis.” When the White House warned of “systemic risk for our financial system” unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.

Now that the bubble has burst and the “systemic risk” is apparent to all, Frank blithely declares: “The private sector got us into this mess.” Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he can find one suspect in the nearest mirror.

Meanwhile, in what can only be described as brass cojones, U.S. Democrats seek Wall Street tax in bailout plan.

How about we tax the Democrat Party for the Community Reinvestment Act?

Filed under: The Government Engineered Mortgage Crisis , AIG, Barney Frank, Bear Stearns, Bill Clinton, Community Reinvestment Act of 1977, Crazy liberals, Democrats, Fannie Mae, Freddie Mac, Government engineered mortgage crisis, Jimmy Carter, Speaker Nancy Pelosi

REJECTED: Bailout Plan Fails in the House 228-205

Today, the House of Representatives gave socialism a defeat. Back to the drawing board. Biiiiiiiiiiitch.

AP: Stunning defeat for economy bailout; stocks plunge By JULIE HIRSCHFELD DAVIS

[T]he House on Monday defeated a $700 billion emergency rescue for the nation’s financial system, ignoring urgent warnings from President Bush and congressional leaders of both parties that the economy could nosedive without it.

Stocks plummeted on Wall Street even before the 228-205 vote to reject the bill was officially announced on the House floor.

Meanwhile, the Dow Jones falls 600+ points.

And another bank struggles:

AP: Citigroup to buy Wachovia banking operations — Citigroup will buy Wachovia’s banking operations; FDIC says Wachovia did not fail by Sara Lepro

Filed under: The Government Engineered Mortgage Crisis , 700 billion, AIG, bailout, banks, Bear Stearns, Bill Clinton, Community Reinvestment Act of 1977, Democrats, Dow Jones, Fannie Mae, Franklin Raines, Freddie Mac, Government engineered mortgage crisis, House of Representatives, Jamie Gorelick, Jim Johnson, Jimmy Carter, mortgage, President Bush, rejected, stocks, subprime

Asking the Arsonist to Put Out the Fire

“No man’s life, liberty, or property is safe

while Congress is in session.”

Mark Twain

* * * * *

A Political “Solution” By Thomas Sowell

Ninety percent of the people on this planet would exchange their economic situation for ours in a minute. The media love hype, and have been dying to use the word “recession” all year but nothing has happened that meets the definition of a recession.

The American economy is growing, not declining. Our unemployment rate is up to 6 percent but there are countries that would be delighted to get their unemployment rate down to 6 percent. Our inflation rate is up a little but many countries would love to get their inflation rate down to where ours is.

Why then is there such a mess in the financial markets? Much of that mess is due to the very people we are now turning to for solutions — members of Congress.

Past Congresses created the hybrid financial institutions known as Fannie Mae and Freddie Mac, private institutions with government backing and political influence. About half of the mortgages in this country are backed by these two institutions.

Such institutions — exempt from laws that apply to other financial institutions and backed by the implicit promise of government support with the taxpayers’ money– are an open invitation to risky behavior. When these risks blew up in their faces, Fannie Mae and Freddie Mac were taken over by the government, costing the taxpayers billions of dollars.

For years the Wall Street Journal has been warning that Fannie Mae and Freddie Mac were taking reckless chances but liberal Democrats especially have pooh-poohed the dangers.

Senator Chris Dodd (D-CT), top Fannie Mae beneficiary.

A Political “Solution”: Part II By Thomas Sowell

Many people have trouble even forming some notion of what such numbers as billion and trillion mean. One way to get some idea of the magnitude of a trillion is to ask: How long ago was a trillion seconds?

A trillion seconds ago, no one on this planet could read and write. Neither the Roman Empire nor the ancient Chinese dynasties had yet come into existence. None of the founders of the world’s great religions today had yet been born.

That’s what a trillion means. Put a dollar sign in front of it and that’s what the current bailout may cost.

[...]

[B]ailing out people who made ill-advised mortgages makes no more sense that bailing out people who lost their life savings in Las Vegas casinos. It makes political sense only to people like Senator Dodd, who are among the reasons for the financial mess in the first place.

People usually stop making ill-advised decisions when they are forced to face the consequences of those decisions, not when politicians come to their rescue and make the taxpayers pay for decisions that the taxpayers had nothing to do with.

The Wall Street Journal, which has for years been sounding the alarm about the riskiness of Fannie Mae and Freddie Mac, recently cited Senator Christopher Dodd along with Senator Charles Schumer and Congressman Barney Frank among those on Capitol Hill who have been “shilling” for these financial institutions, downplaying the risks and opposing attempts to restrict their free-wheeling role in the mortgage market.

As recently as July of this year, Senator Dodd declared Fannie Mae and Freddie “fundamentally strong” and said there is no need for “panicking” about them.

[Emphasis added]

At YouTube, “TheMouthPeace” put together a highly informative 10 minute video on this whole mess and who and what caused it.

Filed under: Barack Obama / The Messiah, The Government Engineered Mortgage Crisis , Barack Obama / The Messiah, Congress, Democrats, economy, Fannie Mae, Freddie Mac, Government engineered mortgage crisis, inflation, mortgages, Represenative Barney Frank, Senator Chris Dodd, subprime mortgages, taxpayers, unemployment rate

Bailout Quote of the Day

Socialism Bailout Quote of the Day

“[T]here are those in the public debate who have said that we must act now. The last time I heard that, I was on a used-car lot. The truth is, every time somebody tells you that you’ve got to do the deal right now, it usually means they’re going to get the better part of the deal.”

– Rep. Mike Pence, R-Indiana

Filed under: The Government Engineered Mortgage Crisis , 700 billion, AIG, bailout, banks, Bear Stearns, Bill Clinton, Community Reinvestment Act of 1977, Democrats, Dow Jones, Fannie Mae, Franklin Raines, Freddie Mac, Government engineered mortgage crisis, House of Representatives, Indiana, Jamie Gorelick, Jim Johnson, Jimmy Carter, Mike Pence, mortgage, President Bush, Republican, stocks, subprime, The Government Engineered Mortgage Crisis