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Columnist laid blame with the wrong party
Daily Pilot (VA) ^ | 9/24/2008 | Tom Williams

Posted on 09/23/2008 1:32:56 PM PDT by markomalley

We usually don’t have to wait very long in one of Joe Bell’s weekly columns for Joe to get to his usual condescending, snide, partisan, political remarks, but in his weekly diatribe last Thursday (“Woes on Wall St. nostalgic), Joe made us wait clear until the final paragraph for his endorsement of Barack Obama for president and his derision of his hated Republican Party. This guy is as predictable as the sun coming up. And his column is supposed to be about local events. What a farce!

And just as predictable, Joe is wrong — yet again. To hear Joe tell it, the current woes of our credit market and the housing industry are all the fault of President Bush and the Republican Party. I don’t know where you’ve been hibernating for the last two years, Joe, but your Democrats have been in complete charge of Congress since November 2006.

I’m also sorry to break this to you as well, Joe, but the seeds of this sub-prime mortgage meltdown were sown by none other Bill Clinton and his democratic administration more than a decade ago. And this comes from Clinton’s head economic advisor, Robert B. Reich, who stated on MSNBC on Sept. 15 that the blame for the current meltdown could be laid squarely at the feet of Robert Rubin (Clinton treasury secretary at the time) and Alan Greenspan, then-chairman of the Federal Reserve.

According to Reich, “they were so obsessed with multiculturalism that they dictated where mortgage lenders Fannie Mae and Freddie Mac could lend and originally helped create the market for the high-risk sub-prime loans now infecting the financial community like a retrovirus infecting the balance sheets of many of Wall Street’s most respected institutions.” Institutions like: Bear Stearns, Merrill Lynch, Lehman Bros., Morgan Stanley, Goldman Sachs, etc. Any of these firms sound familiar?

Reich went on to say tough new regulations (under the Clinton administration) forced lenders into high-risk areas (the end of red-lining) where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against. It was either that or face stiff penalties.

To add insult to injury, the Clinton administration used Fannie Mae and Freddie Mac as its own personal “farm team” to farm out favored democratic operatives like Franklin Delano Raines and Jim Johnson, whom Clinton successively sent to take the helm of Fannie Mae and Freddie Mac during his administration where they promptly proceeded to loot these institutions of more than $100 million for their own personal piggy-banks. Next was Jamie Gorelick (Janet Reno’s former aid), who proceeded to loot another $75 million for her account. In the end, Fannie Mae had to pay $400 million in civil fines for these egregious violations and others under their leadership. And who is now one of Obama’s top economic advisors? None other than Raines! And what has Johnson been up to? He headed up Obama’s vice presidential search committee and stayed on as one of his most trusted economic advisors.


TOPICS: Business/Economy; Editorial; Government; Politics/Elections
KEYWORDS:
Nice response. Too bad it won't ever get good coverage
1 posted on 09/23/2008 1:32:56 PM PDT by markomalley
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To: markomalley

Get good coverage? How about no coverage! McCain has to put these facts into a series of nasty mean spirited commercials. Making mean spirited nasty commercials is the only way the McCain Palin campaign receives ANY media coverage.


2 posted on 09/23/2008 1:41:16 PM PDT by xkaydet65 (Freedom is purchased not with gold, but with steel.)
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To: markomalley

why don’t these thieves have to give back the money they stole?


3 posted on 09/23/2008 1:48:05 PM PDT by machogirl
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To: markomalley
According to Reich, “they were so obsessed with multiculturalism that they dictated where mortgage lenders Fannie Mae and Freddie Mac could lend and originally helped create the market for the high-risk sub-prime loans now infecting the financial community like a retrovirus infecting the balance sheets of many of Wall Street’s most respected institutions.”

ROBERT REICH said this?

Everybody make sure to carry an umbrella today. You will need it with all those pigs flying overhead.

4 posted on 09/23/2008 2:11:11 PM PDT by murdoog (http://babydoc3.livejournal.com)
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To: murdoog
Hmmm. I may have spoken too soon. I just saw the same quote in this IBD editorial. Williams may be wrong about the source.
5 posted on 09/23/2008 2:19:35 PM PDT by murdoog (http://babydoc3.livejournal.com)
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To: markomalley
While it certainly is not Bush's fault the stuff started at the same time he did not stop it. Bush pushed for the subprime mortgages just as hard as anyone else.

Go here. A lot of what happened happened under Bush's administration and his crony HUD secretary appointees Martinez and Jackson.

Prior to HERA, the Secretary of HUD was the mission regulator for the GSEs, with oversight authority to ensure that both GSEs complied with the public purposes set forth in their charters. HUD had general regulatory authority for oversight responsibilities, which included establishing housing goals; monitoring and enforcing compliance with housing goals; new program approval; collecting loan-level data from the GSEs on their mortgage purchase activities; making available to the public a database on non-proprietary GSE loan purchase data; and ensuring GSE compliance with fair lending requirements.From here.

Next.....

But by 2004, when HUD next revised the goals, Freddie and Fannie's purchases of subprime-backed securities had risen tenfold. Foreclosure rates also were rising.

That year, President Bush's HUD ratcheted up the main affordable-housing goal over the next four years, from 50 percent to 56 percent. John C. Weicher, then an assistant HUD secretary, said the institutions lagged behind even the private market and "must do more."

From here.

Bush increased the percentage of sub prime lending required from Fannie and Freddie "each (Clinton and Bush) trying to lay claim to a record percentage of homeowners" here)

There is no question that the problems were created by HUD. Oh, by the way the HUD Secretaries under Bush? Mel Martinez and Alphonso Jackson. Both Bush cronies.

Maybe this is why Bush is pushing just as hard as the dems in using your and my money to bail out Fannie and Freddie.

Go to this thread and read the links.

When HUD released the next set of goals in 2004, it reported that after Cuomo's previous edict, there had been a sudden spurt of GSE subprime investment, "partly in response to higher affordable-housing goals set by HUD in 2000." Fannie had gone from $1.2 billion in subprime-mortgage and securities purchases in 2000 to $9.2 billion in 2001 and $15 billion in 2002. Freddie's numbers were murkier, but clearly also on the rise. In 2003 alone, the two bought $81 billion in subprime securities—which also count against the goals.

That was during Martinez's tenure.

Martinez's successor, Alphonso Jackson, ended up being just as scandalous by receiving sub rate loans from Countrywide.

The whole department appears to be incestuous. Also, note that Martinez and Jackson are both minorities. Did that play a role in their relaxing the loan requirements for Fannie and Freddie? They were obviously put there to appease the minority factions of the U.S.

The whole HUD is corrupt, in my opinion. It's intent has been corrupted by years of abuse and lack of oversight.

I realize a lot of people are trying to deflect blame from Bush but a lot of this stuff happened on his watch under Martinez and Jackson. While I don't expect Bush to be able to monitor every facet of the U.S. govt., he kept putting cronies in charge. They either abused their standing with him or he was too naive to see what they were doing.

6 posted on 09/23/2008 2:42:03 PM PDT by raybbr (You think it's bad now - wait till the anchor babies start to vote!)
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