THE FANNIE MAE GLASS HOUSE
People who live in glass houses, shouldn’t throw stones. Apparently this age old truth doesn’t apply in presidential politics. As the American economy teeters on the brink of collapse, Barack Obama is both picking up rocks and flinging them through the panes of culpability that he and his party must bear.
The truth about this economic crisis we are facing is, it is our fault. We, the people, got loans we couldn’t afford. We the people speculated in the flip housing market driving prices beyond reasonable. Does anyone really believe that a 1200 squarefoot 3/2 can be worth $60,000 in Alabama and $850,000 in California? We the people invested in high risk mortgage securities. Caveat Emptor, right? So ultimately, it’s our fault that we allowed ourselves to be manipulated into believing it would all work out.
So what is the culpability of the manipulators. That’s the question that McCain and Obama should be answering. McCain did throw the SEC chairman under the bus recently, but is Chris Cox really the proper scapegoat?
The real scapegoat has to be the liberal Democrat policy of encouraging risky home loans to poor and unqualified candidates through a series of bills and policy inducements dating back to Jimmy Carter. It hit high gear under Bill Clinton when Fannie Mae and Freddie Mac began buying risky loans, in earnest and it reached fatal speed when mortgage backed securities started trading on the NYSE and lenders had only to increase their portfolio’s to encourage more investment. Everything was on the rise. The problem was the value of these mortgage backed securities was over stated because they were based on the market value of the the mortgages, which were based on the market value of the homes, which were being driving beyond realistic by speculators.
In 2003, George Bush tried to rein in Fannie Mae and Freddie Mac but was blocked by Democrats. John McCain raised the warning flag again in 2005, saying then that the companies books were “illusions.” Again, any effort to address the problem then were blocked by Democrats.
Fannie Mae and Freddie Mac were on a roll and congressional efforts to stop them were blocked by Democrats. Now we all know when you need some help avoiding regulations that will hit your pocketbook, you just make a big donation to your favorite congressman. So who do you think received more money from Fannie Mae and Freddie Mac lobbyist than anybody in congress….
#1 is Chris Dodd and #2 is Barak Obama.
There are even some tie ins with Obama’s “coumminity organizing” days. The organization he chaired was involved in encouraging some of these risky loan programs.
McCain and Obama both haven’t really offered anything that sounds presidential in this entire economic crisis, but Barak Obama needs to watch where he;s throwing rocks or it may ruin his whole house.
Tyra Says: September 24th, 2008 at 3:01 pm
Well stated, Buck! I was flipping between FOX and MSNBC last night and couldn’t believe my ears/eyes! While FOX was analyzing this fiasco (putting blame on all), MSNBC was trying to only blame the Republicans! It’s like our media has completely gone mad. I’m disgusted by their unethical bias in this election. If McCain wins, it will be only because the American people are smarter than the media thinks we are.
Zack Says: September 25th, 2008 at 6:24 pm
There is a member of my family who works in the home finance business. She was visiting here 2 years ago on Christmas. We were discussing the finance market as that’s what I do, I flip houses. She was expressing her concern over orders she had been given. “We are making loans to people and are not even allowed to ask for proof of income!”, she told me. Well, she e-mailed me a couple of months later to tell me that she and a couple of others had started asking for income proof. Her superiors walked into her office and told her to pack up her personal belongings. They stood and watched as she did, then escorted her out of the building. This is common procedure when dismissing an employee from a position where one has access to vital computers.
These NINJA loans as they are now being called (no-income, no-job or assets) are the culprits. The facts are beginning to come out, on FOX News anyway (that’s the only news service I trust), they have actually played the tapes of Barney Franks criticisms of President Bush and Senator McCain for trying to restrict Fannie and Freddie, claiming that this will only limit minority homeownership. “This will only limit minority homeownership”, think about that a minute. Loan money for houses to people with no proof of income or even a job??? YOU try borrowing money like that! Now, we, the taxpayers, are being asked to bail out these institutions, and, AND Obama and Pelosi want to add money for people who are “having trouble paying their mortgages and credit cards”!
If you want to sell chocolate chip cookies to a government installation, the specs book for those cookies is 346 pages! How I know this is a long story. Anyway, this 700 BILLION dollar bailout bill was THREE PAGES LONG! So, why were all of these politicians so eager to sign a 3 page bill that would write a 700 billion dollar check? Could it be to hide the fact that THEY are the ones who forced the institutions to offer these ill-advised loans? If you were in the lending business and were being forced to loan money without knowing anything about who you were loaning it to, wouldn’t YOU protect yourself by including “adjustable rates” on these extremely high-risk loans? And what about “adjustable rate mortgage” did these people not understand? Doesn’t matter, they had to be given the loans. Once again, blame Bush if you want to, but it’s the Congress who did it. I guess they are not a “do-nothing” Congress after all.
For the record, I’m voting against every incumbent this election day. I hope everyone does!