Blame the bubble on FDR, Jimmy Carter and Bill Clinton

Johan Norberg, on his blog JohanNorberg.net, points out the Democratic intervention that caused the financial crisis

SOME milestones in the prehistory of the crisis. 1933: As part of the New Deal, investment banks are stopped from also acting as commercial banks (which would have given them bank deposits and more stability). 1938: As part of the New Deal, president (Franklin D.) Roosevelt creates Fannie Mae and in 1970 Congress creates Freddie Mac. With their implicit government guarantees they can offer cheaper loans and expand until they dominate the American mortgage market. 1989: The American government step(s) in and pay(s) for the savings and loan crisis, which sets a precedent. 1995: The Community Reinvestment Act is revised so that banks and thrifts are forced to give home loans to low and moderate-income households as well. In return they are allowed to repackage and sell those sub-prime risks to others, which Bear Stearns pioneers in 1997. 2001-03: Instead of letting the market get rid of bad businesses and loans after the dotcom bubble and 9/11, the (Federal Reserve) reduces its rate from 6.5 per cent to 1 per cent (with) a dramatic expansion of the money supply, which creates a real estate bubble.

Mae and Mac ran leverage ratios that exceeded 60 to one (cheered on by the Democrats) to keep giving loans to people who could not really afford it. It only took more traditional interest rates for the bubble to burst. The independent investment banks that did not have access to bank deposits collapsed and almost brought the whole system down. All those who now think that the solution is to give more powers to politicians, authorities and central banks should look at what they did with the powers they already had.

WE’VE DONE IT TO OURSELVES – AGAIN!!!!

“A nation can survive its fools and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and he carries his banners openly against the city. But the traitor moves among those within the gates freely. His sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears no traitor; he speaks in the accents familiar to his victims, and he wears their face and their garments and he appeals to the baseness that lies deep in the hearts of all men.” Cicero, speech to the Roman Senate.

“At what point shall we expect the approach of danger? By what means shall we fortify against it? Shall we expect some transatlantic giant to step the ocean and crush us at one blow Never! All the armies of Europe, Asia and Africa combined with all the treasure of the earth (our own excepted) in their military chest, with a Bonaparte for a commander, could not take a drink from the Ohio or make a track on the Blue Ridge in a trial of a thousand years.

“At what point, then, is the approach of danger to be expected? I answer, if it ever reach us it must spring up amongst us; it cannot come from abroad. If destruction be our lot we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.”
Abraham Lincoln, 1837

Trust me when I tell you that I have SERIOUS problems with Mr. Lincoln but the power of his mind – at least in 1837 – is not one of them. He, like many of this nation’s founders, was a keen student of history and human nature. He understood how nations often killed themselves. If he were alive during our lifetimes, he would probably spend every waking hour reminding us of the perils we face – from OURSELVES.

While there are OTHER, earlier instances of America’s suicide attempts, besides Mr. Lincoln’s 1861 tyranny against the lower half of the country – under the guise of INSTANTLY purging us of a slave system that was en route to being voluntarily eliminated – several other, more recent instances spring immediately to my alleged mind.

Created in 1979 by Democrat President Jimmy Carter, the Department of Education (2006 budget over $56 BILLION) was ostensibly designed to bring American education into full competition with other industrialized nations of the world.

In 1983, Ronald Reagan (who campaigned on a platform of going to Washington to DISSMANTLE the ED!), concerned that we continued to fall behind, created a commission to study the problem. It published a study of government education here. It’s conclusion? “If an unfriendly foreign power had attempted to impose on America the mediocre education performance that exists today,” the commission warned, “we might well have viewed it as an act of war.” In other words, WE – or more precisely, the local, state and federal government run “public” schools — did it to ourselves.

Since the federal Department of Education has wrested yet MORE control from the other levels, student test scores have fallen even further behind our competitors.

We got the federal Department of Energy (2008 budget $24 BILLION) in 1977, also under Democrat Jimmy Carter (anyone see a pattern here?) in response to the “energy crisis” of 1973 (see “Georg Wilhelm Friedrich Hegel” for more on this sort of thing!).
It’s taken 40+ years of DOE interference in the country’s energy policies but here we are, back in the soup again – and this time it’s a REAL an energy crisis. Thanks to federal regulations, it takes over 12 years to get a PERMIT to constuct a nuclear power plant. By the time the permit IS issued, the technology is nearly obsolete. The result is that while we generate under 20% of our power with nukes, France, for example, produces nearly 80% of its power with relatively clean, safe nuclear energy.

Comes now the FINANCIAL MELT-DOWN and it, too, will be “a gift that keeps on giving” courtesy of – ta da!! — the DEMOCRATS. Bill Klintoon signs DEMOCRAT sponsored legislation further easing the credit worthiness requirements of low income/over-spending folks buying homes. Then, four years ago, after several REPUBLICANS and others began hoisting red flags about the solvency of Freddie and Fannie, DEMOCRATS Chucky Schumer, Barney Frank, Chris Dodd and their lower level congressional DEMOCRAT bobble-headed sycophants – including one BARACK OBAMA — went before the media to assure us all that all was well. Oh, did I mention that ALL of these guys were recipients of some very heavy campaign “contributions” (as distinguished from outright bribes) from Freddie and Fannie?

OK, so some of the high-income idiots in the investment community figured a way to make a buck or a billion. While I’m not excusing their greed, barring evidence to the contrary, they were only playing the game by the rules these congress critters or their bureaucratic minions promulgated.

Meanwhile, 700 BILLION TAXPAYER BUCKS (are there any other kind?) LATER, the markets still don’t believe that we’ll pull out of the mess with which these welfare state DEMOCRATS have saddled us – and our great-grandchildren.

I just hope they don’t dig us all up so they can slap us around for allowing these self-important and mindless morons to make a shambles of the place.

Before THEY allowed “bread and circuses” to become more important than personal and societal responsibility, ancient Rome prohibited two classes of citizens from holding public office: Those of illegitimate birth (bastards) because they had no knowledge of their ancestry, they were assumed to care little or nothing about the lessons of the past. And eunuchs (castrated freed slaves) who, because they were unable to produce offspring, were believed to care little or nothing about the future.

If we have foolishly allowed intellectual and philosophical bastards and eunuchs – and not an insignificant number of Mr. Lincoln’s traitors — to assume positions of power here, I suppose we deserve what we get.

And get it we certainly will.

Given current trends, it looks as though “it” will start to come down around January 20, 2009!

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