The True Causes of the Financial Crisis

Liberals and Democrats have continually tried to evade blame for their overwhelming guilt in causing the 2008 financial crisis and the resulting recession.  Congress appointed a Financial Crisis Inquiry Commission to determine the causes of the financial crisis, but it was a whitewash of the federal government's culpability and a disingenuous effort to blame "Wall Street."

The Obama Administration used this whitewash as a basis for enacting the Dodd-Frank Act (DFA) to more heavily regulate the financial services sector.

Peter J. Wallison was a member of the Inquiry Commission and a dissenter in the Commission's erroneous conclusions.  He tells why in an article for the American Spectator.  He writes:

The DFA was sold to the American people by the media and the Obama administration as necessary to prevent another financial crisis, but as outlined in this article and made very clear in my dissent, the financial crisis was not caused by weak or ineffective regulation. On the contrary, the financial crisis of 2008 was caused by government housing policies -- sponsored and promoted by many of the same people who framed and ultimately enacted the DFA.

Read his entire article here.  It is a good article to bookmark because Dems will issue all sorts of propaganda in the coming election campaign, in order to sidestep their guilt in the financial disaster.

It Wasn't Wall Street Greed, It Was Government-Imposed Lending Policies

It grieves me to hear even Sarah Palin stating that the mortgage meltdown and financial crisis is the result of "Wall Street greed and corruption." Nothing could be further from the truth. However, the truth is politically unfeasible. Once again, we can't tell the truth because it has racial ramifications, and any honest or open discussion on the subject is stricly verboten in our racially hyper-sensitive society.

The financial crisis was caused by the Democratic Party in general, and Barack Obama was a warrior in their cause: to end "redlining" of granting mortgages based on the ability to repay the loans. The Democrats forced banks and lending institutions to make many bad loans to poor people and minorities, just because the borrowers were poor and/or minorities. It was racial norming applied to the economy, like the racial norming liberals once applied to university admissions, i.e. accepting lower SAT scores from blacks and hispanics while requiring higher SAT scores from whites and asians.

Racial norming didn't work for university admissions - the unqualified still flunked out. It didn't work for mortgages either, as the financially unqualified couldn't repay and soon defaulted on the loans. Racial norming merely sets up the intended beneficiaries for failure, leaving the rest of us to clean up the mess. It's as if results don't matter, just the glorious symbolism of the intent.

This is the kind of racial norming/economically disasterous/income redistribution nonsense the Democrats will continue to impose on the country as soon as they are fully back in power -- and they are now headed towards electing the most leftwing president in American history who will, in all probability, have a filibuster-proof, leftwing Congress to back him up.

The Jawa Report has a great article today on the subprime mortgage mess and Barack Obama's hand in it.

The frustrating thing is this: many Americans simply don't know the truth about Obama because the mainstream media are openly, flagrantly and disgustingly biased in his favor. They absolutely will not report any of it.

Will America Reward the Guilty by Electing Obama?

A number of excellent articles have appeared on the net this past week, making it absolutely, irrefutably clear that the Democratic Party caused the mortgage crisis and the financial crash that followed. Ann Coulter has a good piece on the topic today. Check it out here.

While the Democrats' crazy scheme was being propagated, Republicans warned of the dangers and tried to enact regulatory legislation over Freddie Mac and Fannie Mae to try to prevent a financial crisis. They were successfully opposed by the Democrats who prevented any corrective legislation from being passed.

What is true, of course, isn't important. The great majority of Americans don't know the truth and don't want to do the work to find out. They will simply display a knee-jerk reaction and punish the party in power -- even though the other party is the guilty one.

Now that the financial crisis has come, Democrats are lying their asses off about who is responsible. Nancy Pelosi, the biggest airhead and most shallow member of Congress in 200 years, gave a nasty speech to Congress yesterday blaming the crisis on the Bush administation. Say what you will about Bush, he did try to prevent the crisis early on in his term. Pelosi is a disgrace to Congress, a shameless liar.

The polls show Obama increasing his lead over John McCain, and without a doubt the current crisis is the reason. The American people, learning that there is a chicken crisis, have opted to buy foxes to guard the hen houses.

Get ready for another Jimmy Carter style Presidency in Barack Obama. Unless something radical happens to change public perception, we Republicans are toast. John McCain needs to stop posturing as a fine gentleman and start telling the truth about the Democrats and how they caused this mess. Sarah Palin debates Joe Biden on Thursday and she needs to hit a home run. If she does, it may help. But don't count on it.

The Causes of the Financial Crisis Explained Simply

The video below is called "Burning Down the House: What Caused Our Economic Crisis?" and you can find it at YouTube.com. Embed it in your blog or website. The public needs to know the truth about what caused the mortgage crisis and the financial crisis that followed.

It's simple. Democrats lowered lending standards for Freddie Mac and Fannie Mae so that minorities and poor people could buy homes without meeting the usual standards of income and down payments. This caused a run on home buying, pushing the prices of homes through the stratosphere. When the new buyers couldn't afford to pay the mortgages, they began to default in record numbers. Suddenly there were many more home sellers than there were buyers and home prices plummeted. Financial institutions who invested in or insured these mortgages went bankrupt as a result. The Democrats caused this mess by interfering with the free market and we are all paying the price today in the form of a weakened economy.

Yes, if you want to put the fox into the hen house to cure the chicken shortage, do vote for Democrats and Barack Obama. That'll fix it for sure.

You can get the embed code for this video here. Do it. Spread the word.

McCain Slams New York Times for Obvious Bias and Slant

From John McCain's website, he responds to the NY Times recent (false) allegations that McCain's Campaign Manager is on the payroll of Freddie Mac and Fannie Mae.

A Partisan Paper of Record Today the New York Times launched its latest attack on this campaign in its capacity as an Obama advocacy organization. Let us be clear about what this story alleges: The New York Times charges that McCain-Palin 2008 campaign manager Rick Davis was paid by Freddie Mac until last month, contrary to previous reporting, as well as statements by this campaign and by Mr. Davis himself.

In fact, the allegation is demonstrably false. As has been previously reported, Mr. Davis separated from his consulting firm, Davis Manafort, in 2006. As has been previously reported, Mr. Davis has seen no income from Davis Manafort since 2006. Zero. Mr. Davis has received no salary or compensation since 2006. Mr. Davis has received no profit or partner distributions from that firm on any basis -- weekly, bi-weekly, monthly, bi-monthly, quarterly, semi-annual or annual -- since 2006. Again, zero. Neither has Mr. Davis received any equity in the firm based on profits derived since his financial separation from Davis Manafort in 2006.

Further, and missing from the Times' reporting, Mr. Davis has never -- never -- been a lobbyist for either Fannie Mae or Freddie Mac. Mr. Davis has not served as a registered lobbyist since 2005.

Though these facts are a matter of public record, the New York Times, in what can only be explained as a willful disregard of the truth, failed to research this story or present any semblance of a fairminded treatment of the facts closely at hand. The paper did manage to report one interesting but irrelevant fact: Mr. Davis did participate in a roundtable discussion on the political scene with...Paul Begala.

Again, let us be clear: The New York Times -- in the absence of any supporting evidence -- has insinuated some kind of impropriety on the part of Senator McCain and Rick Davis. But entirely missing from the story is any significant mention of Senator McCain's long advocacy for, and co-sponsorship of legislation to enact, stricter oversight and regulation of both Fannie Mae and Freddie Mac -- dating back to 2006. Please see the attached floor statement on this issue by Senator McCain from 2006.

To the central point our campaign has made in the last 48 hours: The New York Times has never published a single investigative piece, factually correct or otherwise, examining the relationship between Obama campaign chief strategist David Axelrod, his consulting and lobbying clients, and Senator Obama. Likewise, the New York Times never published an investigative report, factually correct or otherwise, examining the relationship between Former Fannie Mae CEO Jim Johnson and Senator Obama, who appointed Johnson head of his VP search committee, until the writing was on the wall and Johnson was under fire following reports from actual news organizations that he had received preferential loans from predatory mortgage lender Countrywide.

Therefore this "report" from the New York Times must be evaluated in the context of its intent and purpose. It is a partisan attack falsely labeled as objective news. And its most serious allegations are based entirely on the claims of anonymous sources, a familiar yet regretful tactic for the paper.

We all understand that partisan attacks are part of the political process in this country. The debate that stems from these grand and sometimes unruly conversations is what makes this country so exceptional. Indeed, our nation has a long and proud tradition of news organizations that are ideological and partisan in nature, the Huffington Post and the New York Times being two such publications. We celebrate their contribution to the political fabric of America. But while the Huffington Post is utterly transparent, the New York Times obscures its true intentions -- to undermine the candidacy of John McCain and boost the candidacy of Barack Obama -- under the cloak of objective journalism.

The New York Times is trying to fill an ideological niche. It is a business decision, and one made under economic duress, as the New York Times is a failing business. But the paper's reporting on Senator McCain, his campaign, and his staff should be clearly understood by the American people for what it is: a partisan assault aimed at promoting that paper’s preferred candidate, Barack Obama.

Statement by Senator John McCain, May 25, 2006:
Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.