With the talk of
Washington and much of the Nation currently surrounding the looming financial
crisis and the “bailout” package proposed by the Treasury Secretary Paulson,
many Americans are rightly asking how we got in to this mess. While it is
imperative that Congress take action to alleviate further problems in our
economy, answering the “how we got here” question is essential because it will
provide the necessary insight to know the right and wrong steps to take to
remedy this crisis and avoid another one in the future.
While many Democrats
are blaming “deregulation” for our housing and economic troubles, nothing could
be further from the truth. Note that no real legislation or substantive
examples are ever cited by Sen. Obama or other Democrat leaders when they blame
the false demon of deregulation. They blame deregulation because the
Democrats answer for virtually every calamity that befalls our nation is more
federal regulation and intervention in the private sector. It is becoming clear
that federal regulation and government mandates are the root problem (as they
often are), not the solution. Read on to see why.
So what and who are
the real culprits? According to numerous leading experts and a review of recent
history, the very structure of Fannie Mae and Freddie Mac are largely at fault
in initiating and escalating this major economic market meltdown. Both
Fannie and Freddie are unique entities known as government sponsored
enterprises, GSEs in Washington-speak, and therefore get their charter and
marching orders from Congress. So Congress, namely powerful House and
Senate Democrat Members, has enabled the GSEs in their push for more “affordable
housing” to buy up increasingly risky subprime mortgages, then bundle and sell
these sub-par assets to investment banks. You see, Congress set numerical
thresholds for the number of low income loans Fannie and Freddie must meet,
which was in conflict with their obligation to shareholders to lend to more
qualified buyers and ensure a profit.
VIDEO: Dems Thwart GSE
Reform in 2005 -- Finding the Origins of the Mortgage Crisis. This Fox News piece reviews the recent
history of Fannie and Freddie, and details Republican efforts as recent as 2005
to reign them in and avoid a future government bailout.
VIDEO: Democrat's
Cover-up for Fannie Mae Exposed in House Hearing.
This actual video footage of a House Financial Services Committee hearing clearly
shows that Democrats have aided and abetted Fannie and Freddie in their gross
abuse of the housing market.
WSJ ARTICLE: "If Democrats
had let the 2005 legislation come to a vote, the huge growth in the
subprime and Alt-A loan portfolios of Fannie and Freddie could not have
occurred." This recent Wall Street Journal article accurately accounts the
foibles of the GSEs and congressional complicity in creating this situation. Of
particular note is that those that championed the “affordable housing” mission
of Fannie and Freddie, namely House Financial Services Chairman Barney Frank
and his Senate counterpart Sen. Chris Dodd, are the primary negotiators on the
bailout package with the Administration.
NRO ARTICLE: Barney Frank says, "I do not see" any "possibility of serious financial losses to the treasury" in regarding the soundness of Fannie and Freddie. This underscores Franks extraordinary efforts to shield Fannie and Freddie from proper oversight and regulation.
ARTICLE: Illegal
Immigration to Blame?
Believe it or not, there is compelling evidence that our historically lax
immigration enforcement has also played a major role in worsening the mortgage
crisis. This article by Michelle Malkin details the pattern of
abuse in lending by banks to the nation’s largest illegal alien “sanctuaries.”
This is yet another reason that we must enforce our border and immigration laws
for the good of our country, our financial system, and the rule of law.
