Blame the Democrats for Fannie Mae and Freddy Mac

by Sal on September 30, 2008

in Economy,Politics

 

These are your culprits, America,  The Sub-prime Mortgage Crisis is the fault of the Democrats.  It all started with the Community Redevelopment Act of 1975, which was desinged to force banks to give low-income housing to those who could not afford it.  For the first 20 years of its existence, however, it was not highly enforced.  Author Dan Flynn on his blog, links to a city Journal article written in 2000 by Howard Hussock, which is remarkable in its description of what is happening right now with Fannie Mae and Freddie Mac. 

Republicans did warn of this coming calamity and attempt reform of Fannie and Freddie, to no avail.  This report outlines how in 2003, then Secretary of the Treasury John Snow pressed for reform of Fannie and Freddie, and warned of an oncoming crisis.  Frank, however, insisted that there was no crisis. 

Two years later, when the President proposed yet another reform package, many Democrats in the house insisted that Frannie and Freddie were solvent, and that there was no impending crisis. 

In 2005, Sen. John McCain co-sponsored a bill, along with Sens. Elizabeth Dole, Chuck Hagel, and John Sununu (all Republicans) called the Federal Housing Enterprise Regulatory Reform Act, which, if it had passed, may have helped stave off this crisis. 

Finally, Democrats by far were the largest recipients of political contributions from Fannie and Freddy.  True, Republicans are not innocent here, as McCain has received $21,500 from Fannie and Freddie.  Closer to the top, however, are our culprits above: 

  • Chris Dodd at #1, with $165,400
  • Barack Obama at #2, with $120,349 after only four years in the Senate.
  • Harry Ried at $77,000
  • Nancy Pelosi at $56,250
  • Barney Frank at $42,350

True, the Republicans are not blameless in all of this.  They should have pushed harder for reform of Fannie and Freddie much earlier on.  In spite of that, however, the fingerprints of this all point straight at the Democrats.  Vote the bums out this November. 

{ 3 trackbacks }

Democrats Aim for New New Deal, McCain Aims for Growth | Axis of Right
October 14, 2008 at 4:30 pm
More Democrat Ties to Fannie Mae and Freddy Mac | Axis of Right
November 7, 2008 at 2:25 pm
Conservative Tenants: Economy ← Maser Media
January 9, 2013 at 8:35 pm

{ 1 comment… read it below or add one }

Ryan September 30, 2008 at 10:38 am

I think the root of this crisis goes even further back than 1975. I think the philosophical birth of lending to high-risk groups started with the Civil Rights Act of 1968, which was based on the Kerner Commission’s report indicating that discrimination in housing needed to end. It was a very noble and morally right law.

However, even if discrimination in housing ends, how do those who historically have not gotten homes get them if they can’t afford them?

Ah HA!

One has to pass laws lowering the standards for groups historically unable to qualify. For the next four decades, this concept and the laws which emerged as a result basically extended the principles of affirmative action to home ownership. The pattern of the Clinton Administration’s housing policies and the Democrat’s stonewalling of reforms of Fannie and Freddie fit right into this larger paradigm. If it’s fundamentally a civil rights issue, then the Dems must be on board without the semblance of a critical eye — which is exactly what happened.

Yet, in the last decade, it’s not just minorities or single women who got these kinds of loans, but nearly anyone who asked for a home loan, regardless of their ability to pay. In some cases, people moved into a $220,000 home they could actually afford, but the bank qualified them for $400,000! How many took the bait and went all the way? I’ve heard another anecdote of a single man who made $36,000 a year who got qualified for and bought a $700,000 home in North Jersey. Guess what? He can’t afford his mortgage once the adjustable rate re-adjusted.

It’s like that time at the party when you’re pretty well buzzed when three hot chicks show up smiling and giddy egging you to do shots with them. Some people would say “No thanks, the room’s already spinning,” but how many people would go for it if the opportunity arose? The last few months has been like the toilet-hugging morning-after for many Americans and the lenders who couldn’t muster the willpower to say “when.” I think a lot of Americans see it that way too — no straight-up bailout, rather make sure “drunky” didn’t mess up their own carpet.

Yet, Congress wants us to clean up everyone else’s carpet. They disgust me. It’s lazy, irresponsible law-making to have the all people flip the bill for individual’s problems. Maybe these bums in Congress need a new job. How the hell are we losing to these people?

Reply

Leave a Comment

You can use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Previous post:

Next post: