Socially Responsible Criminal Behavior
Two things have greatly influenced my Christian life. One is science and the other is economics.
Science says there are established rules of how things work, and if you do not follow the rules bad things happen.
Economics says there is Moral Hazard to bailing out/offering welfare, because there is no reason to stop bad behavior if there is a bailout or welfare.
Economics says Socially Responsible Criminal Behavior is still criminal behavior even if it is socially responsible.
A lot of people (mostly democrats) thought they were making very Socially Responsible decisions when they forced banks to make risky sub prime loans through the Community Reinvestment Act.
The banks knew they were violating good banking principles when they made loans to people who did not meet normal qualification requirements.
America is in a major recession/depression because of Socially Responsible Criminal Behavior.
Democrats like to think they are like Robin Hood, who robbed from the rich to give to the poor, but Robin Hood did have to rob the rich. I have always worried about how much really got to the poor with both Robin Hood and democrats.
This illogical thinking can lead to a priest saying it acceptable for a poor person to steal or can lead a person that calls them self a Christian to murder an abortion doctor.
The Bible has an established set of commandments/doctrines of what works for humans, and if you do not follow the commandments/doctrines bad things happen.
Accepting Jesus Christ as Lord/Savior and committing to following the commandments/doctrines of the Bible is the Christian Lifestyle that leads to the most environmentally friendly, socially responsible lifestyle that can exist on earth.
Thursday, February 18, 2010
Monday, February 1, 2010
Obama Involvement in Economic Disaster of 2008
Obama Involvement in Economic Disaster of 2008
For those people that don't know what you meant about Obama making the mess:
"ACORN showed its colors again in 1991, by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA. Obama represented ACORN in the Buycks-Roberson v. Citibank Fed. Sav. Bank, 1994 suit against redlining. Most significant of all, ACORN was the driving force behind a 1995 regulatory revision pushed through by the Clinton Administration that greatly expanded the CRA (Community Reinvestment Act) and laid the groundwork for the Fannie Mae, Freddie Mac borne financial crisis we now confront. Barack Obama was the attorney representing ACORN in this effort. With this new authority, ACORN used its subsidiary, ACORN Housing, to promote subprime loans more aggressively. "
http://www.democracyforums.com/showthread.php?t=19599
So smart investors KNOWING that the Govt. was as this document states:
Oct. 23 (Bloomberg) -- Fannie Mae and Freddie Mac have an ``effective'' federal guarantee, not the ``full faith and credit'' of the U.S. government, Federal Housing Finance Agency Director James Lockhart said.
There are no policy changes with regard to Fannie and Freddie's debt, Lockhart told reporters, backing away from remarks about an ``explicit'' guarantee that he made in a written copy of his testimony to the Senate Banking Committee in Washington that was distributed to the media today.
``What we did say is an effective guarantee because there's $100 billion backing their equity provided by the U.S. Treasury,'' Lockhart said after the hearing. ``That does give them effectively a guarantee of the U.S. government.''
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajIEoZCommlk
So the money trail to the ecomonic collapse is as follows:
1) Obama's lawsuit FORCED lenders to make unqualified, subprime loans.
2) Fully backed and guaranteed by Fannie/Freddie.
3) Investors seeing these securitized, fully guaranteed packages with HIGH yields??? Why not??
Yet "When warned about Fannie Mae in (House Financial Services Committee Chairman Barney Frank (D-MA), "these two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis.... The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." (New York Times, 9/11/03)
And then Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd also ignored the President's warnings and called on him to "immediately reconsider his ill-advised" position. Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis... (New York Times, 9/11/03.
President BUSH WAS IGNORED... TOLD TO RECONSIDER HIS POSITION!
The economic "inherited Mess" Obama whines about....comes FULL CIRCLE BACK TO HIS FEET!
For those people that don't know what you meant about Obama making the mess:
"ACORN showed its colors again in 1991, by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA. Obama represented ACORN in the Buycks-Roberson v. Citibank Fed. Sav. Bank, 1994 suit against redlining. Most significant of all, ACORN was the driving force behind a 1995 regulatory revision pushed through by the Clinton Administration that greatly expanded the CRA (Community Reinvestment Act) and laid the groundwork for the Fannie Mae, Freddie Mac borne financial crisis we now confront. Barack Obama was the attorney representing ACORN in this effort. With this new authority, ACORN used its subsidiary, ACORN Housing, to promote subprime loans more aggressively. "
http://www.democracyforums.com/showthread.php?t=19599
So smart investors KNOWING that the Govt. was as this document states:
Oct. 23 (Bloomberg) -- Fannie Mae and Freddie Mac have an ``effective'' federal guarantee, not the ``full faith and credit'' of the U.S. government, Federal Housing Finance Agency Director James Lockhart said.
There are no policy changes with regard to Fannie and Freddie's debt, Lockhart told reporters, backing away from remarks about an ``explicit'' guarantee that he made in a written copy of his testimony to the Senate Banking Committee in Washington that was distributed to the media today.
``What we did say is an effective guarantee because there's $100 billion backing their equity provided by the U.S. Treasury,'' Lockhart said after the hearing. ``That does give them effectively a guarantee of the U.S. government.''
http://www.bloomberg.com/apps/news?pid=20601087&sid=ajIEoZCommlk
So the money trail to the ecomonic collapse is as follows:
1) Obama's lawsuit FORCED lenders to make unqualified, subprime loans.
2) Fully backed and guaranteed by Fannie/Freddie.
3) Investors seeing these securitized, fully guaranteed packages with HIGH yields??? Why not??
Yet "When warned about Fannie Mae in (House Financial Services Committee Chairman Barney Frank (D-MA), "these two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis.... The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." (New York Times, 9/11/03)
And then Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd also ignored the President's warnings and called on him to "immediately reconsider his ill-advised" position. Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis... (New York Times, 9/11/03.
President BUSH WAS IGNORED... TOLD TO RECONSIDER HIS POSITION!
The economic "inherited Mess" Obama whines about....comes FULL CIRCLE BACK TO HIS FEET!
Sunday, December 6, 2009
Another Opinion
Quote from KnowOzymandias
I think everyone agrees the economy suffered greatly due to the linkage between home loans, credit default swaps and the financial community.
I would also ask consider that the primary cause for home loan problems were people that should have never been able to get a mortgage much less have several mortgages that they flipped.
How did these unqualified people get the loans that they couldn't make the payments?
Go back to the following as one of the contributing factors:
1) "ACORN showed its colors again in 1991, by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA. Obama represented ACORN in the Buycks-Roberson v. Citibank Fed. Sav. Bank, 1994 suit against redlining. Most significant of all, ACORN was the driving force behind a 1995 regulatory revision pushed through by the Clinton Administration that greatly expanded the CRA (Community Reinvestment Act) and laid the groundwork for the Fannie Mae, Freddie Mac borne financial crisis we now confront.
Barack Obama was the attorney representing ACORN in this effort.
With this new authority, ACORN used its subsidiary, ACORN Housing, to promote subprime loans more aggressively." http://www.democracyforums.com/showthread.php?t=19599
2) the Gramm-Leach-Bliley Act repealing Glass-Steagall was wrong.
This allowed tremendous investment opportunities because Fannie/Freddie under the "full faith and credit" of the USA would guarantee there would be nothing to lose! Securitization of mortgage bundles that funded by margins less then 10%, became lucrative instruments to financial institutions!
3) "When warned about Fannie Mae in (House Financial Services Committee Chairman Barney Frank (D-MA) criticized the President [Bush] warning saying: "these two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis....
The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." (New York Times, 9/11/03)
And then Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd also ignored the President's warnings and called on him to "immediately reconsider his
ill-advised" position. . Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis... (New York Times, 9/11/03.
So loans made to unqualified people that were guaranteed by Fannie/Freddie would securitized and further leveraged much like commodity contracts created the economic crisis.
The blame is equally shared by Democrats/GOP alike but the fundamental objective was to get unqualified borrowers to become voters in the manner of the Motor Voter scam of the 1990s.
I think everyone agrees the economy suffered greatly due to the linkage between home loans, credit default swaps and the financial community.
I would also ask consider that the primary cause for home loan problems were people that should have never been able to get a mortgage much less have several mortgages that they flipped.
How did these unqualified people get the loans that they couldn't make the payments?
Go back to the following as one of the contributing factors:
1) "ACORN showed its colors again in 1991, by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA. Obama represented ACORN in the Buycks-Roberson v. Citibank Fed. Sav. Bank, 1994 suit against redlining. Most significant of all, ACORN was the driving force behind a 1995 regulatory revision pushed through by the Clinton Administration that greatly expanded the CRA (Community Reinvestment Act) and laid the groundwork for the Fannie Mae, Freddie Mac borne financial crisis we now confront.
Barack Obama was the attorney representing ACORN in this effort.
With this new authority, ACORN used its subsidiary, ACORN Housing, to promote subprime loans more aggressively." http://www.democracyforums.com/showthread.php?t=19599
2) the Gramm-Leach-Bliley Act repealing Glass-Steagall was wrong.
This allowed tremendous investment opportunities because Fannie/Freddie under the "full faith and credit" of the USA would guarantee there would be nothing to lose! Securitization of mortgage bundles that funded by margins less then 10%, became lucrative instruments to financial institutions!
3) "When warned about Fannie Mae in (House Financial Services Committee Chairman Barney Frank (D-MA) criticized the President [Bush] warning saying: "these two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis....
The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." (New York Times, 9/11/03)
And then Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd also ignored the President's warnings and called on him to "immediately reconsider his
ill-advised" position. . Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis... (New York Times, 9/11/03.
So loans made to unqualified people that were guaranteed by Fannie/Freddie would securitized and further leveraged much like commodity contracts created the economic crisis.
The blame is equally shared by Democrats/GOP alike but the fundamental objective was to get unqualified borrowers to become voters in the manner of the Motor Voter scam of the 1990s.
Friday, August 7, 2009
Economic Disaster of 2008 - August 2009 Update
Economic Disaster of 2008 - August 2009 Update
Anytime there is a problem, both sides are wrong, one for not doing enough to stop the problem and the other for doing too much for supporting the problem.
I believe the Economic Disaster of 2008 was caused mostly by the Community Reinvestment Act, Fannie Mae, Freddie Mac, and the assumption that housing prices would always go up.
http://economicdisasterof2008.blogspot.com/
The Wikipedia discussion is very good, but soft on democrats like Carter and Clinton who did too much to promote lending to unqualified borrowers.
http://en.wikipedia.org/wiki/Community_Reinvestment_Act
Democrats always support Socialistic programs that cost the government big money, but with the CRA, the democrats pushed the costs to banks by forcing the banks to make the loans.
Both democrats and Republicans liked the expanding economy produced by the increase in housing prices, so the Republicans did not do enough to stop the lending to unqualified borrowers.
Lending to unqualified borrowers was not a problem so long as housing prices continued to rise since the house could be resold even if the owner defaulted. Most financial institutions and most Americans had their total economic strategy based on increasing housing prices.
I believe the election of 2006 and 2008 killed the economy. Bush was keeping things together, until the democrats and the Atheistic Liberal News Media saw a bad economy as the way to win control of the government. The day the housing prices started down every American was affected.
What disturbs me most is that there does not seem to be a solution except inflation. 20% of mortgages are under water and that is expected to rise to 50% in 2011. That means people cannot sell a house unless they pay the bank $20,000 to $100,000. People are stuck in place with no options. Inflation would cause the value of homes to increase so there would be no out of pocket money, but then people on fixed income would need government assistance.
I believe the democrats have received a problem that they created, thus deserve the painful solutions that will be necessary. I think inflation is inevitable.
I oppose the health care/welfare of democrats, because it is another Socialistic program the will get the government involved in a huge expenses.
Socialism is an ugly path for any country because it lead to a reliance on the government and away from the self reliance of the Christian Religion.
When compared to perfection, Republicans did not look good, but when compared to democrats, Republicans look brilliant. Without the propaganda support of the Atheistic Liberal News Media the democrats would look ridicules.
Anytime there is a problem, both sides are wrong, one for not doing enough to stop the problem and the other for doing too much for supporting the problem.
I believe the Economic Disaster of 2008 was caused mostly by the Community Reinvestment Act, Fannie Mae, Freddie Mac, and the assumption that housing prices would always go up.
http://economicdisasterof2008.blogspot.com/
The Wikipedia discussion is very good, but soft on democrats like Carter and Clinton who did too much to promote lending to unqualified borrowers.
http://en.wikipedia.org/wiki/Community_Reinvestment_Act
Democrats always support Socialistic programs that cost the government big money, but with the CRA, the democrats pushed the costs to banks by forcing the banks to make the loans.
Both democrats and Republicans liked the expanding economy produced by the increase in housing prices, so the Republicans did not do enough to stop the lending to unqualified borrowers.
Lending to unqualified borrowers was not a problem so long as housing prices continued to rise since the house could be resold even if the owner defaulted. Most financial institutions and most Americans had their total economic strategy based on increasing housing prices.
I believe the election of 2006 and 2008 killed the economy. Bush was keeping things together, until the democrats and the Atheistic Liberal News Media saw a bad economy as the way to win control of the government. The day the housing prices started down every American was affected.
What disturbs me most is that there does not seem to be a solution except inflation. 20% of mortgages are under water and that is expected to rise to 50% in 2011. That means people cannot sell a house unless they pay the bank $20,000 to $100,000. People are stuck in place with no options. Inflation would cause the value of homes to increase so there would be no out of pocket money, but then people on fixed income would need government assistance.
I believe the democrats have received a problem that they created, thus deserve the painful solutions that will be necessary. I think inflation is inevitable.
I oppose the health care/welfare of democrats, because it is another Socialistic program the will get the government involved in a huge expenses.
Socialism is an ugly path for any country because it lead to a reliance on the government and away from the self reliance of the Christian Religion.
When compared to perfection, Republicans did not look good, but when compared to democrats, Republicans look brilliant. Without the propaganda support of the Atheistic Liberal News Media the democrats would look ridicules.
Monday, June 15, 2009
More information on how the democrats created the Economic Collapse of 2008
More information on how the democrats created the Economic Collapse of 2008
Obama forced Citibank as a lawyer to make risky loans .
ACORN showed its colors again in 1991, by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA. Obama represented ACORN in the Buycks-Roberson v. Citibank Fed. Sav. Bank, 1994 suit against redlining. Most significant of all, ACORN was the driving force behind a 1995 regulatory revision pushed through by the Clinton Administration that greatly expanded the CRA (Community Reinvestment Act) and laid the groundwork for the Fannie Mae, Freddie Mac borne financial crisis we now confront. Barack Obama was the attorney representing ACORN in this effort. With this new authority, ACORN used its subsidiary, ACORN Housing, to promote subprime loans more aggressively.
http://www.democracyforums.com/showthread.php?t=19599
Writer reveals truth behind boom, bust By WALTER WILLIAMS [by the way he's black!!!]
Wednesday, June 3, 2009
The root of the problem lies in Washington. The Community Reinvestment Act of 1977, later given teeth during the Bush and Clinton administrations, forced financial institutions to make risky mortgage loans they otherwise would not have made. President Bill Clinton's attorney general, Janet Reno, threatened legal action against lenders whose racial statistics raised her suspicions.
There were many other warnings of pending collapse, but Congress and the White House, in their push for politically popular "affordable housing," ignored them.
Congressman Barney Frank, who is now chairman of the House Committee on Financial Services, said critics "exaggerate a threat of safety" and "conjure up the possibility of serious financial losses to the Treasury, which I do not see."
Chairman Chris Dodd, of the Senate Banking Committee, called Fannie Mae and Freddie Mac
"one of the great success stories of all time" and urged "caution" in restricting their activities, out of fear of
"doing great damage to what has been one of the great engines of economic success in the last 30 or 40 years."
http://www.columbiatribune.com/news/2009/jun/03/writer-reveals-truth-behind-boom-bust/
b) mortgages created, packed, sold as Credit default swaps and again backed by "full faith and credit of US Govt!
Why wouldn't institutions buy them!
Yet two leading congressmen said nothing is wrong! The Feds are backing the CDSs. How could the buyers lose?
c) totally thwarted by Barney Franks, Chris Dodds, Franklin Raines CEO of $90 million bonuses fame,
encouraged more bogus loans because in the words of Frank/Dodds
1) "these two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis....
The more people exaggerate these problems, the more pressure there is on these companies,
the less we will see in terms of affordable housing." (New York Times, 9/11/03)
2) And then Dodd said this ...Senate Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd
also ignored the President's warnings and called on him to "immediately reconsider his ill-advised" position. .
Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis.... (New York Times, 9/11/03.
Obama forced Citibank as a lawyer to make risky loans .
ACORN showed its colors again in 1991, by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA. Obama represented ACORN in the Buycks-Roberson v. Citibank Fed. Sav. Bank, 1994 suit against redlining. Most significant of all, ACORN was the driving force behind a 1995 regulatory revision pushed through by the Clinton Administration that greatly expanded the CRA (Community Reinvestment Act) and laid the groundwork for the Fannie Mae, Freddie Mac borne financial crisis we now confront. Barack Obama was the attorney representing ACORN in this effort. With this new authority, ACORN used its subsidiary, ACORN Housing, to promote subprime loans more aggressively.
http://www.democracyforums.com/showthread.php?t=19599
Writer reveals truth behind boom, bust By WALTER WILLIAMS [by the way he's black!!!]
Wednesday, June 3, 2009
The root of the problem lies in Washington. The Community Reinvestment Act of 1977, later given teeth during the Bush and Clinton administrations, forced financial institutions to make risky mortgage loans they otherwise would not have made. President Bill Clinton's attorney general, Janet Reno, threatened legal action against lenders whose racial statistics raised her suspicions.
There were many other warnings of pending collapse, but Congress and the White House, in their push for politically popular "affordable housing," ignored them.
Congressman Barney Frank, who is now chairman of the House Committee on Financial Services, said critics "exaggerate a threat of safety" and "conjure up the possibility of serious financial losses to the Treasury, which I do not see."
Chairman Chris Dodd, of the Senate Banking Committee, called Fannie Mae and Freddie Mac
"one of the great success stories of all time" and urged "caution" in restricting their activities, out of fear of
"doing great damage to what has been one of the great engines of economic success in the last 30 or 40 years."
http://www.columbiatribune.com/news/2009/jun/03/writer-reveals-truth-behind-boom-bust/
b) mortgages created, packed, sold as Credit default swaps and again backed by "full faith and credit of US Govt!
Why wouldn't institutions buy them!
Yet two leading congressmen said nothing is wrong! The Feds are backing the CDSs. How could the buyers lose?
c) totally thwarted by Barney Franks, Chris Dodds, Franklin Raines CEO of $90 million bonuses fame,
encouraged more bogus loans because in the words of Frank/Dodds
1) "these two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis....
The more people exaggerate these problems, the more pressure there is on these companies,
the less we will see in terms of affordable housing." (New York Times, 9/11/03)
2) And then Dodd said this ...Senate Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd
also ignored the President's warnings and called on him to "immediately reconsider his ill-advised" position. .
Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis.... (New York Times, 9/11/03.
Monday, May 18, 2009
Housing Bubble = CRA
Housing Bubble = CRA
Although not stated directly, the legislation that created the housing bubble was the Community Reinvestment Act that was black equality legislation intended to assure the vote of blacks for democrats.
Thomas Sowell: Regulators Started Housing Crisis
Sunday, May 17, 2009 5:18 PM
http://www.newsmax.com/newsfront/sowell_housing_crisis/2009/05/17/215234.html
Respected economist Dr. Thomas Sowell, author of the new book "The Housing Boom and Bust," tells Newsmax that the current housing crisis can be blamed on pressure from government officials seeking to remedy a "problem that didn't exist."
Dr. Sowell also said politicians' stated concern about that so-called problem — a lack of affordable housing — is "a farce."
Editor's Note: To see the full Thomas Sowell interview, Go Here Now.
Newsmax.TV's Kathleen Walter asked Sowell what caused the "house of cards" in the housing market to collapse.
"The most fundamental thing is that the money that was normally paid for monthly housing payments stopped coming in, or stopped coming in in the volumes that it had in the past," said Sowell, a senior fellow at the Hoover Institution at Stanford University.
"The question then is, why did that happen? And the reason that happened was that banks and other lending institutions began lending to people who did not meet the traditional standards for mortgage loans, but were given those loans under pressure from government regulators, and even in some cases under threats from the Department of Justice if their statistics didn't match what the Department of Justice thought they should be — for example, in terms of income levels, race, what communities they invested in, and so on."
Walter noted that Sowell asserts in his book that politicians in Washington were trying to solve a problem that didn't exist.
"The problem that didn't exist was a national problem of unaffordable housing," Sowell explained.
"The housing in particular areas, particularly coastal California and some other areas around the country, were just astronomically high. It was not uncommon for people to have to pay half of their family income just to put a roof over their head. So that was a very serious problem where it existed.
"But it existed in various coastal communities primarily and a couple of other places. Unfortunately, the elites whose strongholds are on the East and West Coasts don't seem to understand that there's a whole country in between, and in most of that country housing was quite affordable by all historical standards.
"So they set out to solve the problem by setting up a federal program to bring down the mortgage requirements, the 20 percent down payment and that sort of thing, and by forcing Fannie Mae and Freddie Mac to buy up those mortgages from the people who no longer had to meet the same requirements.
"The banks had no choice but to go along because the regulators controlled their fate. So the banks would simply sign up people, sell the mortgages to Fannie Mae and Freddie Mac. It now became Fannie Mae and Freddie Mac's problem. And that meant it became the taxpayers' problem."
Walter asked: "Who is really responsible for all this?"
"There are a lot of people who were irresponsible," Sowell responded.
"But the fundamental problem, the problem of reduced lending standards, with people buying houses even with no money down in some cases, that all came precisely from the regulators that people are now talking about as the salvation of the housing market.
"There's no such thing as regulation in the abstract. There are certain kinds of regulation that can have beneficial effects. Canada does not have the same problem that we have even though they have regulations. But their regulators are trying to make sure that the banks and other lending institutions are obeying clear-cut rules. Ours were trying to produce higher statistics on home ownership in general, and in particular trying to reduce the gap between low-income people and high-income people, blacks and whites, et cetera."
Walter asked what Americans can do to ensure that the housing boom and bust will not happen again.
"First and foremost the voters have to learn to be skeptical and to find out what the facts are," Sowell said.
"There is not the slightest incentive for a politician to behave better in the future. If voters don't understand that, it's going to happen again.
"This is the worst housing crisis we've had but it is not the first. This very same drive to increase home ownership occurred under the Republicans in the '20s. It occurred under the Democrats in the '30s, and it occurred under both parties in the '40s and '50s.
"There is not the slightest incentive for politicians to learn from their mistakes because they pay no price for it. And they'll never pay a price for it as long as the voters don't make an effort to find out what is going on."
Sowell added: "I see absolutely no reason why politicians should take charge of which way prices go. That's precisely what led to the current disaster. . .
"When you realize how long politicians have been talking about a need for affordable housing, you realize what a farce it is."
Although not stated directly, the legislation that created the housing bubble was the Community Reinvestment Act that was black equality legislation intended to assure the vote of blacks for democrats.
Thomas Sowell: Regulators Started Housing Crisis
Sunday, May 17, 2009 5:18 PM
http://www.newsmax.com/newsfront/sowell_housing_crisis/2009/05/17/215234.html
Respected economist Dr. Thomas Sowell, author of the new book "The Housing Boom and Bust," tells Newsmax that the current housing crisis can be blamed on pressure from government officials seeking to remedy a "problem that didn't exist."
Dr. Sowell also said politicians' stated concern about that so-called problem — a lack of affordable housing — is "a farce."
Editor's Note: To see the full Thomas Sowell interview, Go Here Now.
Newsmax.TV's Kathleen Walter asked Sowell what caused the "house of cards" in the housing market to collapse.
"The most fundamental thing is that the money that was normally paid for monthly housing payments stopped coming in, or stopped coming in in the volumes that it had in the past," said Sowell, a senior fellow at the Hoover Institution at Stanford University.
"The question then is, why did that happen? And the reason that happened was that banks and other lending institutions began lending to people who did not meet the traditional standards for mortgage loans, but were given those loans under pressure from government regulators, and even in some cases under threats from the Department of Justice if their statistics didn't match what the Department of Justice thought they should be — for example, in terms of income levels, race, what communities they invested in, and so on."
Walter noted that Sowell asserts in his book that politicians in Washington were trying to solve a problem that didn't exist.
"The problem that didn't exist was a national problem of unaffordable housing," Sowell explained.
"The housing in particular areas, particularly coastal California and some other areas around the country, were just astronomically high. It was not uncommon for people to have to pay half of their family income just to put a roof over their head. So that was a very serious problem where it existed.
"But it existed in various coastal communities primarily and a couple of other places. Unfortunately, the elites whose strongholds are on the East and West Coasts don't seem to understand that there's a whole country in between, and in most of that country housing was quite affordable by all historical standards.
"So they set out to solve the problem by setting up a federal program to bring down the mortgage requirements, the 20 percent down payment and that sort of thing, and by forcing Fannie Mae and Freddie Mac to buy up those mortgages from the people who no longer had to meet the same requirements.
"The banks had no choice but to go along because the regulators controlled their fate. So the banks would simply sign up people, sell the mortgages to Fannie Mae and Freddie Mac. It now became Fannie Mae and Freddie Mac's problem. And that meant it became the taxpayers' problem."
Walter asked: "Who is really responsible for all this?"
"There are a lot of people who were irresponsible," Sowell responded.
"But the fundamental problem, the problem of reduced lending standards, with people buying houses even with no money down in some cases, that all came precisely from the regulators that people are now talking about as the salvation of the housing market.
"There's no such thing as regulation in the abstract. There are certain kinds of regulation that can have beneficial effects. Canada does not have the same problem that we have even though they have regulations. But their regulators are trying to make sure that the banks and other lending institutions are obeying clear-cut rules. Ours were trying to produce higher statistics on home ownership in general, and in particular trying to reduce the gap between low-income people and high-income people, blacks and whites, et cetera."
Walter asked what Americans can do to ensure that the housing boom and bust will not happen again.
"First and foremost the voters have to learn to be skeptical and to find out what the facts are," Sowell said.
"There is not the slightest incentive for a politician to behave better in the future. If voters don't understand that, it's going to happen again.
"This is the worst housing crisis we've had but it is not the first. This very same drive to increase home ownership occurred under the Republicans in the '20s. It occurred under the Democrats in the '30s, and it occurred under both parties in the '40s and '50s.
"There is not the slightest incentive for politicians to learn from their mistakes because they pay no price for it. And they'll never pay a price for it as long as the voters don't make an effort to find out what is going on."
Sowell added: "I see absolutely no reason why politicians should take charge of which way prices go. That's precisely what led to the current disaster. . .
"When you realize how long politicians have been talking about a need for affordable housing, you realize what a farce it is."
Saturday, March 28, 2009
Scape Goating the AIG Bonuses
Scape Goating the AIG Bonuses
The Obama Administration has a short term victory with the AIG Bonus scape goating, but now it seems to have backfired.
People now know the Obama Administration, particularly Dodd and Geikner knew all about the bonuses, long before they were to be paid.
The Obama Administration needs a scape goat because they need to draw attention away from the CRA, a socialistic program that was started by democrats as part of the many failed black equality programs that democrats have started.
The banks, Fannie Mae, Freedie Mac, financial institutions and insurance companies were over extended with too much credit on the books, the same as most Americas were over extended on credit card debt, but nothing would have happened if there had not been defaults on the sub prime mortgages that were created by the Community Reinvestment Act.
The Obama Administration needs a scape goat to draw attention away from black equality programs because the health care (Universal Healthcare)/welfare programs that are being advocated are just more black equality programs that will also fail.
Now I ask you which is worse, the few at AIG that stole a lot, or the many sub prime loans that stole a little each.
The Obama Administration has a short term victory with the AIG Bonus scape goating, but now it seems to have backfired.
People now know the Obama Administration, particularly Dodd and Geikner knew all about the bonuses, long before they were to be paid.
The Obama Administration needs a scape goat because they need to draw attention away from the CRA, a socialistic program that was started by democrats as part of the many failed black equality programs that democrats have started.
The banks, Fannie Mae, Freedie Mac, financial institutions and insurance companies were over extended with too much credit on the books, the same as most Americas were over extended on credit card debt, but nothing would have happened if there had not been defaults on the sub prime mortgages that were created by the Community Reinvestment Act.
The Obama Administration needs a scape goat to draw attention away from black equality programs because the health care (Universal Healthcare)/welfare programs that are being advocated are just more black equality programs that will also fail.
Now I ask you which is worse, the few at AIG that stole a lot, or the many sub prime loans that stole a little each.
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