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By Lawrence Kudlow and Stephen Moore
No mention of Franklin Raines, or of the delightfully ubiquitous Jamie Gorelick? The Clinton cronies who made more than $25 million each running Fannie Mae into the ground? Gorelick, of course, was also the official of the Clinton Administration who prohibited sharing of information between criminal investigators and intelligence agencies, which AG John Ashcroft testified was a “structural cause” of the 9/11 attacks. Such wonderful people the Clintons surround themselves with.
What amazes me is the way politicians and the media have been able to air-brush out the government’s role in the debacle and shift all blame to Wall Street. The bottom line is that if the mortgages on which Wall Street’s derivatives had been sound, the derivatives would not have collapsed. Unfortunately, the federal government went out of its way to ensure that they weren’t.
I have quite a bit of trouble feeling sorry for those subprime borrowers who “lost their homes” and went bankrupt. Many people were allowed to not only “buy” homes way above their financial wherewithal, but they also folded credit card debt into those mortgages. They really lost nothing, as they had zero skin in the game. In the meantime who ended up paying for this disaster? It was the folks who lived prudently, paid their mortgages and other debts, and even managed to save a few bucks in a 401K, which, as a result of the fiasco, lost 50% of its value. Yes there is much blame to go around and leave it to Clinton and her fellow Dems to turn the truth on its head. Donald Trump wasn’t even in the mortgage banking business, he was a borrower himself, albeit not a subprime one. Hillary Clinton is a supreme liar.
Wouldn’t the acknowledgement of these facts ultimately put the blame on the public?
For taking the loans out I mean?
Wasnt all this mess just done for the sake of symbolism and good feels?
If the public is actually forced to examine the functional and psychological causes of the boom/bust I think politics will be forever changed, invariably pushing out many established politicians.
Is doing this even possible?
Has it ever been attempted?
The point is well taken, but the counter example of Mrs. Clinton and the cattle futures market is over stated. I cannot remember the details, but my recollection is that Mrs. Clinton, with the able assistance of the Wall Street Journal and some broker (something like Stephens as I recall) turned either $1,000.00 or $10,000.00 into $100,000.00, not $1,000,000.00.
Of course, the Wall Street Journal had nothing to do with it, but it is Mrs. Clinton’s only endorsement of what the WSJ has to say.
I hate to pettifog, but small errors are the gunpowder that the left uses to discredit the entirely accurate main point.
I have a family member who bought a house in Las Vegas (but didn’t live there) so he could rent it out–against HUD subprime rules. After the bust he sold it to a short-seller, but blames it all on the dirty bankers. The government, in his mind, is completely innocent. This is what socialism does.
I’m sorry, has this been done? My take is that anyone who is interested in this and capable of understanding, knows that the government is the cause. And the same goes for knowing that the government is responsible for the outrageous costs of post-secondary education. There may be something here for healthcare costs as well. Those who don’t know that the government causes these maladies, don’t care. So, politicians and the media know the truth but tell a different story. This is the established pattern.
Don’t forget Sid “Vicious” Blumenthal, who as far as I know is still working for her, and the late Sandy Berger, with his magic undershorts and socks.
A million or a mere $100,000. At this point what difference does it make?
Here’s an idea: Let’s take an issue for which the Clinton government had a main role in causing damage to the economy and to the people it purported to help. It could cause Democrats to be thrown out of office, so let’s blow it to pieces and make it a non-issue by blaming the people for being irresponsible in accepting the help. Think of it as SuperSquirrel.
From The American Spectator:
“With wanton disregard for the economic well being of America, a decade ago the social justice entrepreneurs of the ultra-leftist Association of Community Organizations for Reform Now (ACORN) let Americans know their strategy for bringing equality of result to the housing market — at all costs.
In a circa 1999 document, “To Each Their Home: Success Stories from the ACORN Housing Corporation,” the ACORN affiliate called the American Dream a sham and bragged about undermining banks’ underwriting standards.
The brochure acknowledged there may be scattered “stories of hope and success” in ACORN-targeted communities, but “they also belie the supposition that if you simply work hard, sacrifice and save, you can easily buy a home of your own.” (The document is available here.)
ACORN Housing took credit for developing “several innovative strategies” to get around pesky traditional lending guidelines, which were unfair because they “were geared to middle class borrowers.”
Instead of using passé measures of creditworthiness such as, say, credit history and having an adequate income, ACORN convinced lenders to adopt “more flexible underwriting criteria that take into account the realities of lower income communities.” Henceforth, some banks serving inner cities would accept “less traditional income sources such as food stamps.” (See Foundation Watch, November 2008.)
http://spectator.org/42706_acorns-food-stamp-mortgages/
ACORN is not running for election. The Clintons are.
Rahm Emanuel was placed on the board of Fannie or Freddie (along with other Clinton cronies) and received at least one 6 million dollar bonus. That whole setup stinks.
Long before Clinton became president, you could buy a home for less than 20% down. In the late 1980s, we had the low-doc or no-doc mortgage. That’s when they gave you a mortgage without verifying anything on the application because they could securitize it immediately. Maybe you should blame Reagan for CMOs? Of course not.
I give you that the Clintons created the revolving door with Wall Street. I give you that they created moral hazard through the bailouts of Mexico and LTCM. I give you that they loosened Glass-Steagall. All of these things contributed to the crisis. But you could blame Greenspan just as much.
How Rahm with no prior finance experience came to Wall Street and left with millions just a few years later is one of the great uninvestigated stories of the 1990s-2000s.
We can’t repeat these truths often enough. We should hammer them because they are truths. Then we let the same crooks, Frank and Dodd, write the new law. I’m sure there is more to this. How much slum housing was dumped onto folks who never were going to pay? How much did these slum lords press for sub prime lending putting real mob pressure on banks? Has anyone looked into this? I heard hints at the time, then nothing.
Don’t look now, but they are at it again. The “Home Ready” program was just launched by FNMA to better serve low income but creditworthy borrowers. Yeah. Right. “Home Ready” aka FNMA bending over backwards to make stupid loans to people we shouldn’t lend to but are going to anyway.
You can google for all the sorid details. Insert quote from George Santayana here.