Our nation’s current economic difficulties generally began with the passage of the Community Reinvestment Act and the modifications of that Act during the Bill Clinton Presidency, followed soon after with the abuse of that Act that continued with slobbering aid from and gleeful gluttony by the Democrats in Congress and Democrats otherwise, any and all, in the industry of finance (banking and investments).
People in banks and investments were “just following orders” or doing their jobs as per what and how Congress declared be done and that’s been the going explanation used then and ever since: they were just doing what they were told to do, by Congress, and under threat of lawsuit by the likes of a junior Senator from Illinois, Barack Obama. A big-government, top-down dictation of conditions by Congress created a rip-off opportunity for many an individual and institution keen eye as developments from what Congress requested be implemented: make the loans without primary regard for credit-worthiness because the taxpayers would repay what wasn’t, resell the loans for profit to make the process (more) profitable to the lenders and favor lending based upon certain races and ethnicities as customers.
Fannie Mae and Freddie Mac have long been used by the Democratic Party to “park” useful individuals in a so-called “out of government” job whereby they could amass a great deal of money via hoodwinking the U.S. taxpayer largesse under ruse of “providing housing for the poor”.
Fannie/Freddie uses taxpayer money to guarantee housing loans – high risk is no if not little risk to banks who are pressured to loan without regard for credit-worthiness when those high-risk loans are then sold to investors. The banks and investors get profits at the gate, the taxpayers get taken after the gate, Congress along the walkway gets elected and takes home many a million when they’re parked at Fannie/Freddie or otherwise logged-in to the Democrat lobby-voter-reinvestment loop. The poor — remember them — get confused, further in debt and most still need housing afterward.
But it’s the taxpayers (who are also consumers and investors) who are ruined overall with a trashed economy afterward, their investments ruined if not lost due to devalued worth coupled with rising costs for just about everything. Which is where we are today.
The poor do need “housing,” few to no one will or would ever deny such. But the use of the poor and their need for housing at someone else’s expense — using other people’s money, in other words — has become a bad art-form used by the Democrats to both feather certain Democrat finances and to buy many a vote for many more Democrats. Fannie/Freddie were the gateway for this process, the Community Reinvestment Act was the arm that opened and closed the gate per the applicant and political party and the gate operators were and are the Democrats, especially members of the House Financial Services Committee, of which Barney Frank is Chairman.
But ethically, Congress was and is supposed to be the guard of the gate with a view of the entire walkway to and from. The Financial Services Committee, Chaired by Democrat Congressman Barney Frank, was and is especially responsible for what occurs at Fannie/Freddie and for all the Monopoly-stylized ‘money’ that changes hands — using the poor and their need for housing at others’ expense as the dice that roll to keep the game going. Barnie is recorded in many of his spit-lectures railing against “increased regulations” of Fannie/Freddie throughout his stint in Congress while it was President Bush and Republicans in Congress who tried to implement the increased regulations that Frank wagged his finger and tongue at for years prior to the spittoon overflowing with debt and disaster stemming from that tipped-over “housing bubble” that arrived at the feet of Barney Frank after he and other Democrats spat into it for well past a decade.
I wrote about this situation on several sites over the past few years and received massive sniping by drive-by Democrats who were quite so hot to elect Barack Obama and to deny reality along the way. So the following article from Investor’s Business Daily sums up the situation today as to Frank as he — preposterously — seeks re-election in Massachusetts and is captured yet again in lie after lie by an astute opponent, Republican Sean Bielat:
BARNEY’S BIG LIE
– Investors Business Daily, October 14, 2010
Subprime Scandal: Democrat Rep. Barney Frank may be running for re-election for the 15th time, but he can’t run from his record of shilling for affordable loans. His GOP foe is calling him on his lies.
Boston entrepreneur and Marine Sean Bielat came out swinging in a pair of debates this week, blasting the 30-year congressman as “one of the leaders of the economic disaster” and pointing out that as a veteran of the House banking panel, Frank pushed Fannie Mae and Freddie Mac to load up on risky mortgages while fighting proposals to reform them.
That sent the fast-talking Frank into orbit. “That’s exactly the opposite of the truth,” he insisted. “I have been leading the fight — unfortunately when we were in the minority it wasn’t successful — to stop homeownership for low-income people.”
But Frank’s famously fast tongue is also forked: As Fannie and Freddie took on billions in subprime debt, he insisted they were not facing “any kind of financial crisis,” and urged more affordable lending. “The more people exaggerate these problems, the more pressure there is on these companies (to reform), the less we will see in terms of affordable housing,” Frank said in 2003.
In a hearing held later that year, he seemed to acknowledge the risks. Only, he thought subsidizing low-income, first-time homebuyers was more important: “I do think I want to roll the dice a little bit more in this situation towards subsidizing housing.”
Confronted with the quote by one of the debates’ moderators, Frank explained that he meant subsidized rental housing. Sorry, that dog won’t hunt, either. In 2005, Frank said: “Those of us on our committee will continue to push for homeownership.”
And he didn’t just push for it via Fannie and Freddie, but also through the Community Reinvestment Act, which mandates banks make riskier urban home loans. In fact, he backed President Clinton’s historic changes to the law, which forced banks for the first time to hit numerical targets for affordable mortgages. The tougher rules triggered an explosion in subprime lending.
Backed into a corner, Frank blamed Bush for doing what he himself did. “I was critical of the Bush administration,” he maintained, “because they pushed Fannie Mae and Freddie Mac to increase the number of low-income homeownerships.”
Not so fast. For starters, Bush inherited the affordable housing targets set by Clinton, which mandated Fannie and Freddie devote fully half their business to affordable lending. When Bush nudged those goals higher in 2004, Frank raised no alarms. In fact, he said it “serves us badly to raise safety and soundness issues.”
Even as Fannie chief Franklin Raines, a Clinton appointee, came under investigation for cooking Fannie’s books, Frank defended his corrupt operation, saying it was “doing very good work.”
What’s more, Frank was one of the architects of the 1992 legislation authorizing HUD to slap the affordable housing goals on Fannie and Freddie in the first place. Then he demanded the mortgage giants relax their standards to meet those goals.
Bielat is right. If anyone in Congress deserves blame for the subprime crisis, it is his opponent. Let’s hope Massachusetts voters agree. The economy can no longer afford Frank and his costly affordable-lending crusade.
And, a refresher-read of the 2008 news, in which can be found the long-and-oft-repeated question about Frank’s problematic “involvement” with Fannie/Freddie that continued to be met with silence from the Democrat-populated media and the Democrat-populated Congress:
Media Mum on Barney Frank’s Fannie Mae Love Connection
Democratic House Financial Services Committee Chair promoted GSEs while former ‘spouse’ was Fannie Mae executive.
– by Jeff Poor, September 24, 2008
THERE WILL BE PROPAGANDA: “Emanuel Was Director Of Freddie Mac During Scandal”
– by this site, Nov 7th, 2008