He had the nerve to bring up the
recent financial industry crisis and assign blame, but he didn't mention
that the top 3 recipients of campaign donations from Fannie Mae
and Freddie Mac were Democrats -- and that he was ranked #2. (Source:
Barack Obama's Fannie Mae/Freddie Mac Connection ).
And Senator Obama didn't mention that
he was among those .................
Actually
This crisis was caused by political
correctness being forced on the mortgage lending industry in the Clinton
era.
Before the Democrats' affirmative
action lending policies became an embarrassment, the Los Angeles Times
reported that, starting in 1992, a majority-Democratic Congress
"mandated that Fannie and Freddie increase their purchases of mortgages
for low-income and medium-income borrowers. Operating under that
requirement, Fannie Mae, in particular, has been aggressive and creative
in stimulating minority gains."
Under Clinton, the entire federal
government put massive pressure on banks to grant more mortgages to the
poor and minorities. Clinton's secretary of Housing and Urban
Development, Andrew Cuomo, investigated Fannie Mae for racial
discrimination and proposed that 50 percent of Fannie Mae's and Freddie
Mac's portfolio be made up of loans to low- to moderate-income borrowers
by the year 2001.
Instead of looking at "outdated
criteria," such as the mortgage applicant's credit history and ability
to make a down payment, banks were encouraged to consider nontraditional
measures of credit-worthiness, such as having a good jump shot or having
a missing child named "Caylee."
Threatening lawsuits, Clinton's
Federal Reserve demanded that banks treat welfare payments and
unemployment benefits as valid income sources to qualify for a mortgage.
That isn't a joke -- it's a fact.
When Democrats controlled both the
executive and legislative branches, political correctness was given a
veto over sound business practices.
In 1999, liberals were bragging about
extending affirmative action to the financial sector. Los Angeles Times
reporter Ron Brownstein hailed the Clinton administration's affirmative
action lending policies as one of the "hidden success stories" of the
Clinton administration, saying that "black and Latino homeownership has
surged to the highest level ever recorded."
Meanwhile, economists were screaming
from the rooftops that the Democrats were forcing mortgage lenders to
issue loans that would fail the moment the housing market slowed and
deadbeat borrowers couldn't get out of their loans by selling their
houses.
A decade later, the housing bubble
burst and, as predicted, food-stamp-backed mortgages collapsed.
Democrats set an affirmative action time-bomb and now it's gone off.
In Bush's first year in office, the
White House chief economist, N. Gregory Mankiw, warned that the
government's "implicit subsidy" of Fannie Mae and Freddie Mac, combined
with loans to unqualified borrowers, was creating a huge risk for the
entire financial system.
Rep. Barney Frank denounced Mankiw,
saying he had no "concern about housing." How dare you oppose suicidal
loans to people who can't repay them! The New York Times reported that
Fannie Mae and Freddie Mac were "under heavy assault by the
Republicans," but these entities still had "important political allies"
in the Democrats.
Now, at a cost of hundreds of billions
of dollars, middle-class taxpayers are going to be forced to bail out
the Democrats' two most important constituent groups: rich Wall Street
bankers and welfare recipients.
Political correctness had already
ruined education, sports, science and entertainment. But it took a
Democratic president with a Democratic congress for political
correctness to wreck the financial industry.
