The Financial Mess: How We Got Here

American Thinker ^ | September 29, 2008 | Abraham H. Miller

[Volunteer]

This was brilliant. I will be using this at work today.

[sickoflibs]

None of this will ever be heard if republicans support a bailout that appears to payoff their rich thieving buddies. How can Bush do this to his party?? What does McCain think this would do to him? McCain is a coward if he doesnt take a stand on this and he will deserve to lose, God help us!

[ComputerGuy]

By 2006, 30% of all mortgages went to people who in any other circumstances wouldn't qualify.

This is the first time I've seen that number.
Astounding.

[sheikdetailfeather]

Absolutely brilliant and should be shown around the world! This bailout cannot help a thing long term if the underlying causes of the problem are not addressed.

[logician2u]

I am not suggesting that the CRA by itself led to the current crisis, but the CRA was the first and most important part of the food chain. The CRA caused the expansion in the number of questionable loans that lending institutions made, but Wall Street and insurance underwriters were all to willing to package these loans, enhance their ratings through convenient exercises in fantasy, sell them, and insure them with reserves that were more inadequate than the incomes of the people who got the loans in the first place.

Prof. Miller should stick to politcs, which he knows, and let others speak to the origins of the current malaise.

It's so easy to place blame on Wall Street and bankers and Fannie and Freddie and Congress and CRA, and they all had a role to play for sure.

But you can't make loans without first having the money, and the excess money came from the Fed. The single individual most responsible for the bubble (although not for its being popped) is Alan Greenspan.

[tx_eggman]

Just the facts mam, just the facts

Linky Thing: Burning Down the House
Linky Thing: Timeline - Fox News
Linky Thing: Excerpts from Congressional Hearings

[indianyogi]

Let us not blame Mr. McCain for this mess and his vote. He did not start it and so whatever he does to make it better, we need to support him.

On the other hand, Obaama’s thinking, philosophy, and operations are build on CRA concepts. He is the one who needs to be stopped for the sake of this country.

I wish, President Clinton will stand up and take the blame and responsibility for putting in place a CRA program and philosophy throughout the political/business establishments.

I wish he would also stand up and say Mr. McCain’s opposition to this throughout his career shows he is a great man.

[madinmadtown]

Great post! One of the questions that isn't being asked is, what happens to property tax bases now that homes are being devalued? Municipalities, counties and states are all reliant for property taxes for inflated budgets based on sky-high property evaluations. Even if your community has managed to keep property taxes low, probably not all communities in your county or state have done the same. This housing mess in a nightmare for schools and local governments throughout the country.

[rockinqsranch]

http://www.freerepublic.com/focus/news/2083123/posts?page=50

http://findarticles.com/p/articles/mi_m1282/is_n25_v45/ai_14779796

http://www.freerepublic.com/focus/f-news/1965239/posts
http://www.ibdeditorials.com/IBDArticles.aspx?id=306978378974502
http://www.ibdeditorials.com/IBDArticles.aspx?id=307149667289804&kw=cra
http://www.freerepublic.com/focus/f-news/2088795/posts
http://www.americanthinker.com/2008/09/the_financial_mess_how_we_got.html

I’ve added this one to my collection.

[PeterPrinciple]

One of the questions that isn't being asked is, what happens to property tax bases now that homes are being devalued? Municipalities, counties and states are all reliant for property taxes for inflated budgets based on sky-high property evaluations.

---

The property taxes are prorated among all the properties no matter what the FMV value is, at least in Iowa. I would suspect the libs have done this throughout the nation.

[sickoflibs]

RE “so whatever he does to make it better, we need to support him.”

I will NOT support him trying to get elected at the expense of house republicans. Even if it worked we would have McCain with democrat supermajority. How can republicans oppose any spending if they support what looks like a bailout of republican rich buddies? They will either have to support all welfare spending or be tarred as Obama says, only caring for the rich. If McCain loses, and now that is very likely short some foreign crisis, this is a hell of a lot of power to hand to democrat majority, and shooting house republicans in the head will make it worse.

[sloop]

and all these conditions remain intact while we put hundreds of billions toward a rescue plan - a plan whose major players include dodd and frank

[TruthWillWin]

The Bush administration in 2003 tried to change the system, to no avail. Congressman Barney Frank, (D, MA ) was in the forefront of stopping the Bush proposal to take control out of Fannie and Freddie and put it into a third overseeing organization. Frank too has emerged in the current crisis as one of the major critics of the administration.

This bothers me. At that time we control all three branches of government. Why can't we fix this? Bill was able to create much of these problems even when we controlled congress:

Rather than submit legislation that the GOP-led Congress was almost sure to reject, Clinton ordered Robert Rubin's Treasury Department to rewrite the rules in 1995.

How A Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable

If Bush did not have the support to fix this even with a Republican controlled congress why wasn't he able/willing to rewrite the rules like Bill did?

[VOA]

bump

[roses of sharon]

http://www.nypost.com/seven/09292008/postopinion/opedcolumnists/os_dangerous_pals_131216.htm?&page=1

ONE key pioneer of ACORN's subprime-loan shakedown racket was Madeline Talbott - an activist with extensive ties to Barack Obama. She was also in on the ground floor of the disastrous turn in Fannie Mae's mortgage policies. Long the director of Chicago ACORN, Talbott is a specialist in "direct action" - organizers' term for their militant tactics of intimidation and disruption. Perhaps her most famous stunt was leading a group of ACORN protesters breaking into a meeting of the Chicago City Council to push for a "living wage" law, shouting in defiance as she was arrested for mob action and disorderly conduct. But her real legacy may be her drive to push banks into making risky mortgage loans.

[HighlyOpinionated]

http://banking.senate.gov/public/index.cfm?FuseAction=Contact.Form

Email the Banking Committee and tell them how you feel. Dodd should recuse himself because he took money from Fannie and Freddie. Quote some of the American Thinker article and let the Banking Committee know that YOU know how much "blood" is on their hands.

Obama should bow out of the election because he took money from them AND from ACORN. It's all collusion.

[Aquinasfan]

Absolutely brilliant and should be shown around the world! This bailout cannot help a thing long term if the underlying causes of the problem are not addressed.

Once their assets are sold off, Fannie, Freddie and the FHA should be dissolved.

[ChessExpert]

This is an another excellent article. I think the conservative community, including myself, are seeing more and more clearly. The wider, moderate/less informed/liberal community have not got a clue. The author brings us up to the moment.

I think the bail-out will be a disaster if Barack Hussein Obama (BHO) becomes President.

He could take these assets and give them away. Let the people living there already, have the houses. Anything is possible. The press will cover for him. His rationale might be that he is not giving the houses away. People are earning it or paying for it in various ways. For example, they could earn their houses as Democratic party operatives. Some might even become community organizers.

Many properties will be managed by Democratic party apparatchiks. They could get rich doing so, while steering a variety of political/economic behavior. The Chicago machine politics may become America's machine politics. How do you measure the potential for harm? Well you can start with the dollar size of the bail out as a minimum. Think of it as as a $700B gift to the Democratic party.

[Puddleglum]

How we got here: billionaires buying off congressmen who in turn extort from billionaires the promise to make loans to people who need to get better credit before they even think about home ownership. Congressmen sleep with billionares, buy the votes of people who simply aren’t credit worthy and who end-run the American dream of hard work being the path to success. Home prices get dramatically inflated due to artifical competition.

Reality check sets in: folks can’t pays their loans; demand for houses was artifically high due to easy credit and now the houses are falling back to their natural value; infalted loans sold upstream are worth what the houses are really worth.

In summary: Congresmen scratch billionaires’ backs, billionaires cough up the “too-risky-for-words” housing loans, poor dumb sucker honest and responsible middle class O’liar claims to care about once again get left holding the bag. It doesn’t take an apple falling on Isaac Newton’s head to figure it out. All it takes is a ACORN falling on a squirrels’ head.

This is the Billionaire Bailout Bill of 2008. It is also the “Keep House Prices So Artificially High You Need 2 1/2 Incomes to Afford Them” Bill of 2008. There is nothing honest or wise about it.

Good thing government doesn’t subsudize haircuts.