Look, I'm all for helping the other guy but this is plain foolishness. When the President is done with us, nobody will have anything. Let's take a look at what they have done and what they are now planning to do to destroy American capitalism.
ACORN, CHRIS DODD, BARNEY FRANK, JIM JOHNSON, FRANKLIN RAINES, FANNIE MAY. Do they sound familiar? They will when you are done reading this article.
These guys are the ones that are the root cause of this entire financial meltdown. They pressured banks and lenders to make “no doc” loans to minorities for houses they could not afford. They also took campaign donations from Fannie Mae and Freddie Mac and Senator Dodd had a home mortgage ‘sweetheart’ deal with Countryside as well. They – along with their pet organization ACORN - should all be under investigation for what they did to the world. But will that happen? No of course not. They are Democrats and this is a Democratic Administration. But nevertheless, they are the root cause of this whole mess.
UPDATE: Houston, Texas February 25, 2009. Today the Houston city council tried to pass a bill whereby the "city" (I guess that would be the Mayor) could take taxpayers’ money and hand it out to “people who are deep in credit card debt” to pay off their credit cards. The purpose of this would be to reduce his debt so he would get a better credit card score “so he could qualify for a mortgage”. Tell me, where’s the line for this deal, I want in!
Why doesn’t the President admit he is just trying to give them homes for free.
Didn’t we just do this and screw up the world? Issuing bad mortgages to people that couldn’t afford them? We can't be making the same mistake over and over folks, sooner or later even Democrats have to wise up. People cannot have what they cannot afford. That is pure insanity.
Forcing a lender to give a mortgage loan to a homeowner after we first have to give him money to pay off his debts so he can qualify for that loan, is almost laughable economics. Yet that's is exactly what we are doing here. We are shredding our economic system and killing the rest of the world as well in an ill-fated rather pathetic attempt to be Robin Hood, to redistribute the worlds’ wealth.
President Obama acts like those who have something today were given it for free. NO, they worked for it. They earned it. They went to school, they worked hard, they sacrificed for what they have. It is the minorities who now have their hand out and our President who is trying to give them something for nothing.
The President needs to understand there are reasons some folks have something and others do not. Usually it revolves around education, a work ethic and
financial planning or the lack thereof. It's no accident that there are people at the top of every society and people at the bottom. People put themselves into those positions. And if suddenly you give people at the bottom their own house, paid by taxpayers, in time they will likely lose them too. Wait and see. Then everyone will be broke. People at the bottom are there for a reason. If you really want to help them, open up special free schools in their neighborhoods for young adults who missed out on education the first time around but now see the error of their ways and want a second chance. Give them that second chance. That way you are teaching them how to survive and that will work. What we are doing now looks like a Saturday Night Live skit.
What we doing now is what got us into this mess in the first place., Violating ordinary accounting and financial principles for political reasons. Generally speaking, this is nothing but taking money from one group to give to another and giving it a fancy name like “mortgage modification” or “mortgage forgiveness”. It's the closest we can come to “black reparations" without using the word since the majority of the people getting the benefit of these programs are African Americans.
This is the same stuff ACORN did to lenders in the inner cities that brought on this entire financial crisis. I wouldn't be surprised to find they are involved again. They really aren’t very bright because they are hurting the very people they profess to be trying to help.
Do you understand what "mortgage modification" and "mortgage forgiveness" really mean? Let me tell you. First let me remind you of what was said in the recent presidential campaign when the subject of "black reparations (for slavery) came up". What you say you never had any slaves. Neither did your parents? Too bad, somebody did so we have to pay for them.
During the campaign, Senator Obama discussed black reparations (for slavery) with black journalists in Hawaii. They reported he was in favor of it. However when Obama came back to the mainland and had to address white audiences, he backed away from reparations. He said he had been misunderstood and what he actually meant was increased opportunity and improved education for blacks. Oh really? Yes, really. Okay, if you say so. But let’s see if that’s actually what he is doing because this is a man who speaks one thing but does another.
Now to "mortgage modification" and "mortgage forgiveness". The difference is simply a matter of degree.
The new Stimulus bill calls for lenders to call in people who are in danger of foreclosure and whose home value is now less than their mortgage amount. They call that being ‘upside down’ in your home. The lender will sit down with the distressed homeowner and try to structure or refinance that homeowner’s original loan payment down to a more manageable amount. How? By letting the homeowner re-purchase his home at current market value rather than the original sale price.
What that means is if they paid $200,000.00 and had a mortgage for $190,0000.00 and the home now has a market value of only $160,000.00, the homeowner will be allowed to ‘repurchase’ that home for $160,000.00 and start over. Plus he or she will get a lower interest rate and a longer term in order to lower his payment. How’s that? The difference – the money that is lost – will be picked up in part by the lender and in part – the greater part – by you, the taxpayer.
So that's 'modification'. Radio ads are being run today nationally inviting people with high debt, no credit ratings, and no equity in their homes - and who may be behind in their mortgage payments - to see if they are eligible for "mortgage modification". If they are a minority, you can bet they are eligible. The higher their debt, the more we will pay off for them. (They should just run up their credit cards before they call for help.)
But that’s not all. After that we have what is called "mortgage forgiveness". Here's how that's going to work. Again mainly for minority family. All this is designed for minority families.
Old Fannie Mae guidelines used to call for things like a down payment, a credit check and an employment history check. They also included a rule of thumb guideline that said your other ordinary expenses should not exceed 38% of your total income. This was so you had enough money left over to pay for your mortgage and taxes and other one-time expenses that might come up. The amount "left over" (over the 38%) determined how big a mortgage you could carry or how big a house you could buy.
That’s how we used to do it when we knew what we were doing. That’s how we used to do it before Dodd, Frank, Johnson, Raines and ACORN got into the business of giving homes away free to some Americans.
The new, new idea (called mortgage forgiveness) is this: if you remove the 38% from the family’s total income, and there’s still not enough left over to afford the home this 'homeowner' is currently occupying, then the price of his home must be reduced to fit whatever he has. And yes, you heard me right.
It’s a brave new world. Where we used to see if we have enough money to afford to buy what we wanted to buy, now we get to pick out what we want and then have the price reduced to fit the money we have available to spend for it. Call this Obamanomics.
Let's see how these two programs would work in your world. We start with "modification" and proceed to "forgiveness".
You go out and buy a new car. You pay $35,000.00 for it. You drive home. You have it four weeks but when payment time comes around you find you can't afford the car. So you go back to the dealer and tell him you can’t make the payments.
The dealer tells you not to worry, he can help you afford his car. What he will do is to re-sell you the car ”at today’s market price”. Well, we all know new cars lose up to 10% of their value as soon as you drive them off the lot, so your $35,000.00 car has a market value today of just $28,000.00 even though it’s only a month old. Not to worry, he says, he will refinance the car for $28,000.00for you. How’s that? Will that work out okay? Will you have enough now to make the new payments?
You tell him you don't think so. You still can't pay for it.
Exit "modification" enter "forgiveness".
He smiles. "Not to worry,” he says, “I have another idea."
"What's that?" you ask.
"We call it our 'car payment forgiveness' program."
"Wow, that sounds great! How's it work?"
“Tell me how much you have left over from your monthly budget,” he says, “that you can use to pay for this car. Put the first 38% of your income aside and see what's left.”
You scratch out a few numbers then answer “about $200.00.”
“Okay, how many months do you think you could pay that $200.00?"
“I don’t know, five years maybe”.
“Hmm that’s $12,000. We had hoped to get more since the car is worth $28,000.00. But hang on and let me talk to my boss.”
He returns in two minutes. “Congratulations! You have a deal. You can re-purchase this car for $12,000.00!”
You are stunned. “But who pays the other $16,000.00?”
He smiles. “Not to worry, the American taxpayer is going to pay that for you.”
That’s auto-payment forgiveness. Mortgage forgiveness works the same way only for more money.
And that my friends is what President Obama has just introduced to America on behalf of " homeowners" who today can’t pay for mortgages the democrats gave them in the “no doc loan” days, loans that are defaulting now. We will basically just buy their homes for them. That way we can avoid further foreclosure.
You can call this nonsense anything you want but to me, this particular bill is about black reparations, pure and sweet. Buying poor blacks homes as a payment for slavery. On a broader scope, it’s socialism, a redistribution of wealth from those who worked for it and earned it, to those that did neither.
Now if you are a liberal reading this, you may think this is great. If you are a college student that doesn’t even have a full time job let alone a family to support, you too may think it’s fine. And if you’re some liberal Ivy-towered do-gooder who can’t see beyond his or her nose, you may be ecstatic. You may even jump to your feet as Nancy Pelosi did repeatedly like a school girl when her Lord and Savior gave his address to congress. That woman is a flat out embarrassment.
But if you are a hard working American who has struggled to play by the rules, to pay your bills on time, to hold up your end of the bargain with your country, then you might not think this is so hot at all. In fact, you may be angry about the whole damn thing.
But it won’t matter because you, my friend, no longer have anything to say about what goes on in Washington. You see YOU elected a socialist Democrat as your President and then compounded the error by giving him a Democrat-controlled Senate and House. So now he can do pretty much what he damn well pleases.
UPDATE: These programs were designed for the 6% minorities that have the no-doc or ARM loans. But here’s the rub. Lately a lot of non-minority Americans have been losing their jobs and when their unemployment runs out – if it isn’t extended indefinitely they too may be threatened with losing their homes. They too may qualify for these very same programs. Then what happens? Are we going to start buying homes for them because if we do, this may catch on very quickly. And then we will really be in the tank because these people represent the other 94%.
Somehow I don’t think they thought this out very clearly.
Next week, the 1st week of March, congress is going to vote on a bill that gives judges in a bankruptcy court the right to assign value to an individual's home and then force lenders to issue a mortgage at the reduced value. Now you know most of these people are going to be minorities - you can bet your life on it. And the lenders are supposed to eat their original contract or as a silly female democrat said today, "to share in the condition they helped cause". They did? I thought congress and Fannie Mae did this and the lenders were instructed by Fannie to go along. I get so tired of this on-going democratic political spin.
The Constitution says contracts are sacred. Yet this administration is trying to put a local judge - someone who may know nothing about real estate or real estate values - in charge of re-setting the price of a home. Not the marketplace, not some buyer, not even a real estate expert – just a judge who is told to right an ancient wrong (slavery) by giving this guy a home even if it has to be for free. (Let's hope this doesn't open up a new path for graft.)
Did you vote for this? Did you vote to destroy our economy? And our country? If you are a member of a minority you probably did. If you are a college kid and never held a real job, maybe you did. If you are a silly liberal who barely knows what he or she is talking about politically, you may have. But I bet the rest of you didn't. And for those of you who think this was a mandate, I remind you that President Obama won a fine victory but it was just 54%-46% and a switch of just 4% in his vote would result in a 50-50 split.
President Obama says he is going to increase our GDP next year. No, he isn't. He says he is going to cut the budget deficit in half by 2012. No, he isn't. You don't reduce budgets by spending trillions of dollars that you don't have. What he is going to do is inflate the budget dramatically and then cut it and claim it was a big budget reduction. It's nothing but a shell game.
And folks, you do realize this money has to be BORROWED from someone or a lot of someone’s, don’t you? You can't go down in the basement and just print it, it has to be borrowed and paid back with interest. Usually borrowed from foreign governments like China. The whole thing is a disaster in the making. He is trying to re-invent accounting but it won’t work.
I am not here addressing the entire stimulus plan because I don’t have the expertise to do that at this time but I am addressing these mortgage programs which I feel are terribly unfounded and ill thought out. If you want to see where this is taking us, take a look at California. (See “Look to California To See Our Future” on this site.)
California is in debt tens of billions of dollars. They have just raised taxes 12 billion dollars and have to borrow 16 billion more. They also can't pay people their tax refunds and so they have to issue them IOU’s for the money. That’s this year. Where are they going to get it next year PLUS pay off the IOU’s. Answer? They aren’t.
California also has to raise taxes in the state. Among others they are going to raise the gasoline tax and probably the cigarette tax. All this to pay for the way they have been running their state which is poorly. More and more taxes to pay for goofier and goofier government. Yet just recently they turned down billions from oil companies that wanted to drill off shore. They’d rather see people out of work, the state bankrupt. Or maybe just have you and me pay for their stupidity.
Screw California. They dug this hole for themselves, let them climb out of it by themselves. Why should the other states and taxpayers that know what they are doing pay for them? It wasn’t that we approved of what they were doing.
This stimulus bill also gives money to a small private solar firm in Denver that is barely staying in business. This company is more like a communist collective than anything else. It certainly isn’t a company like most companies.
For example, there are 55 employees basically hanging on by their teeth. All decisions are made collectively by all the employees. Well why not? Certainly employees are just as smart as CEO’s right? Of course right. Next they all give themselves six weeks paid vacation which might explain why they are almost out of business. We are going to give this company money the government is taking from those of us who work for a living in companies that are American companies that operate as American companies do and not as collectives. (You remember collectives don’t you? They had them in the old Soviet Union under Communism before the realized they didn’t know what the hell they were doing. Well this company operates as one and they don’t know what they are doing either. But Obama wants to give them some of your money so they can continue their experiment in socialism, which is what it is. Meanwhile he stresses the money is for expanding solar technology. Folks, it will be a decade or more before solar energy contributes anything of moment to anyone.)
This whole country is going crazy. People walk across our southern border by the millions and the government does almost nothing to stop them. Makes me wonder if some of that drug money is finding it’s way into the pockets of American politicians. Graft is hardly new in government. Neither is stupidity. Whatever, America is crashing and burning. Look at California. They are nearly bankrupt with their leftist liberal ideas. Their school system once the envy of most of America is now second to worst in the country. That’s liberal government for you. Totally inept.
And what will they say when it call comes crumbling down? After they have destroyed what used to be a modern, progressive, successful society?
“Oops, my bad.”
The Democratic Party and its liberal national media insists on blaming this crisis on almost anybody but itself. They blame greedy CEO’s, greedy Wall Street, Iraq, George W Bush – you name it, everyone but them. But the truth is, it is THEIR fault.
They need to look in the mirror.
Here’s why. First, lets get rid of the smokescreens. Let’s talk about smokescreen #1- Iraq.
America has fought eleven wars. Despite the fact that we have been fighting there for six years, Iraq has the least number of fatalities of any war we have ever fought. This month Iraq, now rid of its despotic leader, had its second free election. The second free election in its four-thousand year history. The American liberal press ignored it even though it was of dramatic importance to Iraq and to the rest of the world. The press put bad news from Iraq on page one for years but good news they bury. It doesn't fit their political agenda.
Well, we won the war and brought a free democracy to Iraq. Now it’s up to them to keep it but America did it. We gave them their chance of freedom. The war also did another thing. The problem fighting terrorists is they are all over the place, not concentrated where you can fight them. They are not the kind of army you can confront head to head, they are slippery usually hitting and running.
Another problem with them is they are not governments. When they are, it’s easier to hit back (Libya) but it’s almost impossible to hit a country just because of someone of few of its people do. Nations are reluctant to do that and that’s a fact terrorists count on.
Except in this case. In this case, the actions of President Bush seduced al Queda into coming to Iraq in big numbers. Their leaders were there. They had a huge financial investment there. Before they knew what hit them, the war in Iraq took away their biggest advantage, fluidity. It converted them to what amounted to a “standing army”. They stood and fought. That was great for us. Knowing where to find them, we did and we decimated them. We destroyed their hierarchy and bled their finances dry. Fighting in Iraq was the worse decision al Queda ever made and the best decision we made.
Notice, in all that time there were NO attacks on America or American interests around the world. None. Compare that with the previous eight years when there were many attacks including the first WTC attack. In Iraq, we won and they lost. Even though the national press has done all it could to distort the truth, or to keep it off the front pages, we won. The facts speak for themselves. We won. Now they have to keep what we handed them but we did what we set out to do. Way to go, President Bush.
Finally, Democrats like to say the present financial crisis is the result of the money spent in Iraq. That’s a lame excuse for what they did but let’s deal with it anyway. The cost of the war in Iraq has certainly been considerable. Wars always are. But it is the reason you fight and not the cost of a war, that is paramount. America has involved itself in lots of wars (11 by my count), and all but one (the Civil War) took place on foreign soil just as this one did. They all cost a lot of money, wars always do.
Over six years, according to The 2009 National Priorities Project Report, America spent 600 billion dollars fighting in Iraq. That’s a lot of money but it’s not a lot when you consider how much more we spent on foreign oil in that time because Democrats wouldn’t permit us to drill for oil where we know we have it. It’s not even close.
We are sending upwards of 600 BILLION dollars overseas to purchase foreign oil every single year, making the purchase of oil 600% time more costly than the war in Iraq. And in Iraq we are fighting for a free democracy that would be to our long-term benefit while buying foreign oil is throwing our money down the environmental drain like the jackasses we are. Democrats don’t talk about this because it doesn’t flatter them. They are disingenuous at best, phony at worst.
America has oil deposits off shore, at ANWR, and shale oil in the Midwest that total a TRILLION barrels, enough to supply our oil needs for half a century or more. And don’t mention C02 because C02 is not dangerous to the environment. That’s just a smokescreen to get billions of dollars of taxpayer money into pet environmental projects to make money for those who invest in them.
As an example, take T. Boone Pickens’ wind farms. (He wouldn’t allow one on his property, he said). Wind is never going to be more than 10-15% of our energy supply but if Pickens can tap into all that taxpayer money he will make a fortune. And who is his biggest investor? That’s easy: Nancy Pelosi. See, what goes around comes around. As they say, follow the money.
Back to the economy. what did happen to the economy? Was it George Bush’s fault? Was it the war in Iraq? How did the collapse occur? What cause it? Hell, that’s easy.
None other than the bard of Democratic liberalism, George Soros, said clearly the root of the collapse can be found in bad mortgage loans given to people who could never hope to replay them. George said that in a television interview and he is absolutely right. Millions upon millions of minority loans were given to people that couldn’t qualify for them and couldn’t afford them. Those loans amounted to upwards of a trillion dollars.
When the economy began to slip into a recession, which happens often, the people at the bottom get squeezed. They have no margin for error. That’s what happened in this case only worse. In this case, the people at the bottom shouldn’t ever have been given mortgage loans so when things got tight, they began to lose those homes.
These losses triggered a financial collapse because these mortgages had been sold as part of investment packages (derivatives) around the world and when they began to fail the impact was felt near and far. It was not CEO salaries, or jet airplanes, or George Bush that caused this economic collapse.
The collapse was the result of (1) bad mortgage loans made to minorities sponsored by ACORN, (2) a rewritten CRA, (3) Jim Johnson and Franklin Raines CEOs of Fannie Mae, (4) Senator Chris Dodd (CT) and Representative Barney Frank (MA) with an assist to Senator Chuck Schummer (NY) and maybe Nancy Pelosi (CA). They caused this and they are all Democrats.
Now if you care about honesty, here’s how it worked. It used to be that Fannie Mae guaranteed the housing market. The way they did that was they served as a ‘broker’ between the investment community and mortgages given out by lenders. The lender would make the loan to the homeowner and then sell the paper to Fannie Mae for cash so he could make more loans. Fannie would then package those loans and sell them off as investments to investors the world around. The mortgages were the solid underpinning of investment packages.
These securities, known as mortgage back securities because they consisted in great part of mortgages approved by Fannie Mae, were the backbone of the investment community. The reason they were so well received was Fannie set strict guidelines for the loans they would buy, and the lenders lived by those guidelines. In the main they included (1) down payments (2) credit checks (3) employment histories and (4) the homeowners had then to demonstrate that after allowing 38% of his income for ordinary expenses, he had enough leftover to pay his mortgage and taxes.
If he met those criteria, he got his loan. Fannie would then “buy that loan” from the lender for cash so the lender would have money to make more loans. Meanwhile, Fannie would package the loans and turn around and sell them around the world to investors who would then repackage them (more derivatives) and sell them again. Fannie wold take the cash from the sale of their mortgages and buy more mortgages. That’s how it worked for decades and it worked very well.
UNTIL, the Clinton Administration decided to make some changes. Jim Johnson (D) later to be the chairman of the Obama committee that picked Joe Biden, was appointed head of Fannie Mae. The Democratic Party also decided during the Clinton years to rewrite the Community Reassessment Act that affected mortgages.
Under Jim Johnson, Fannie Mae decided to liberalize its mortgage guidelines. You can ascribe any motive you want to this, let’s just say they wanted to put more African American and minorities into homes of their own. That at least gives them a decent motive. Others not so decent have said they were trying to placate their voter base that consists of minority voters. Whatever the reason, they relaxed the Fannie Mae guidelines. Over the next few years (2000-20004) they waived (1) the requirement for a down payment, (2) credit checks, (3) employment history checks and (4) the 38% requirement. They waived so much documentation that these mortgage loans got their own knick name: they were called “no docs” which stood for “no documentation”. These loans were handed out like candy, based far more on political consideration than accounting principles. They were – in fact – bad loans predestined to fail.
So Fannie Mae bought the no-doc and ARM paper. They bought them (6%) along with the more traditionally documented 94%. Sadly, when Fannie bought this “paper” and then repackaged it for sale to investors, they did not use a Surgeon General type warning on the investment packages that would have been helpful.
They should have said “these loans were issued without down payments, without credit checks, without employment verification, and without the standard 38% discretionary limit”. Had they done so, these loans would never have been purchased by investors and this mess would have been avoided. But then, Fannie Mae would have been unable to function.
Those no-doc loans were the fundamental disaster upon which greater disasters were heaped. It went like this: mortgage loans are not sold individually but rather they are cut up (figuratively) and divided each one into a whole group of separate packages. So if they had ten mortgages to give out, each package might have 10% of each of the ten separate mortgages. Add other investments to the packages and you have a derivative to sell.
In doing it this way, Fannie believed it was spreading any risks over a lot of different packages and in that way, making them all stronger. And maybe that would have been true had it not been for all those “no docs” that were included. But these loans were included and they were far riskier than previous loans and so by ‘cutting them up” and spreading them across a lot of investment packages, they simply acted to poison a lot of separate investment packages that were sold here, there, and everywhere. When the collapse of these millions of mortgages began, everyone was affected the world around.
Investors had never had this experience before with Fannie Mae mortgages. Heretofore, they were trustful of those mortgages and in fact used them as the basis for securities trading. Home mortgages in America were damn near as good as gold. That was when financial people and not politicians were running the show.
The world wide investment community that includes large banks and investment houses and also governments, were all victimized by these bad loans, loans which should never have been made in the first place. And those who made them were indeed Democratic politicians. If you are losing your money, blame them.
You have all heard Obama rail on the campaign trail about “golden parachutes”. Well two of his favorite Democrats are Jim Johnson and Franklin Raines, the two who ran Fannie Mae and Freddie Mac. When Johnson left his post, he got a ‘golden parachute’ of about 26 million dollars. When Franklin Raines left office he got about 91 million dollars but since then has had to give back a portion of that. How much I don’t know. But notice, not a word from Obama about these two friends of his and their “golden parachutes”. I guess it depends on whose ox is being gored.
So why do I say that Senator Chris Dodd (D-CT) and Representative Barney Frank (D-MA) were culpable in all this? That’s easy. Dodd is the Chairman of the Senate Banking Committee that is charged with overseeing financial institutions in the United States. It is his job to see that stuff like this doesn’t happen.
Barney Frank has the same responsibility in the House. The two of them are supposed to be watchdogs for the people, not perpetrators of a fraud on the them. Instead of doing their job, they both took something and looked the other way. What did they take? Chris Dodd got a favorable “sweetheart” mortgage loan from Country Wide Financial (whom he was charged with overseeing) and he also got the second biggest political donation for his re-election campaign from Fannie Mae. Frank got the third most money from Fannie and its “employees”. The guy that got the most was Barack Obama.
These guys let the fox into the hen house.
In 2004-5, there were two attempts made to curtail what Fannie was doing. One was at the behest of President George Bush. The other was by Senator John McCain (R-AZ). McCain introduced a bill to control Fannie’s runaway behavior and was defeated. Maxine Waters, an African American representative from the Watts district of Los Angels can be seen on Utube videos screaming against the McCain/Republican attempts to curtail Fannie Mae shouting that “this is racist, nothing but an attempt to keep African Americans from owning their own homes!” Anytime you say anything an African American doesn’t like today, you are called a racist. Doesn’t matter if you are telling the truth or not. Well, political correctness is the weakness; truth is the strength.
No, it wasn’t racism that prompted John McCain to try to curtail what Fannie was doing. He simply knew it was going to fail. But they didn’t want to hear it and so they voted him down. The no-doc loans became a part of Fannie’s packages and were spread around the world. You have all heard “one rotten apple can spoil a bunch”, so now we can add, “one rotten home loan can spoil another bunch”.
“Derivatives” is the name given to the packaging and re-packing of these mortgages along with other securities. It was said that derivatives were the problem when Democrats were seeking to find someone to blame. I don’t hear much of that anymore.
Another attempt to find a scapegoat for this collapse was to blame the CEO’s. The greedy CEO’s with their big private aircraft that they like to use when they move around the country much like Al Gore or Nancy Pelosi who also fly big planes.
But it wasn’t greedy CEO’s that brought about this downfall, it was the Democratic party. Were greedy people a part of the problem as it mushroomed? Sure, they were. But like the poor, greedy people have always been with us. Lot’s of them can be found in the Halls of Congress (greedy people not poor people).
But let’s look at that charge anyway. Assuming anyone reading this has an honest interest in the truth, let me ask you to ask yourself this question. Before all this happened, if you went to Bank “A” and they offered you 5% return on your investment in their bank and then went to Bank “B” and they offered you 7%, which bank would you have decide on? If you say anything but “B”, you are not being honest. We all would have taken Bank “B”.
If you had money in an IRA and an investment manager was administering that IRA, would you have wanted him to maximize your holdings or not? If he were investing in mortgage backed securities (as most were), would you have expected him to buy securities “guaranteed” by Fannie Mae with the highest possible return or not? Of course you would want the highest possible return. I agree with you.
So should I say we are both greedy?
Some of these mortgages were shaky but carried a higher return. What idiot would not have taken them? Do you think many of would have been aware that what has happened, could happen? Why is it greedy to try to maximize what you have? Doesn’t everyone do that? Of course they do. This charge of greed is an attempt by the liberal media and the Democratic Party to hide the truth about what happened. They want to blame anyone but themselves. Take the CEO bonuses for example.
It had become customary for CEO’s of large shareholder corporations to get huge bonuses. (Don’t forget Jim Johnson and Franklin Raines along with many other Democrats) who also got these huge bonuses. It was the thing to do.
So if a private business and its shareholders are dumb enough to give a CEO of a failing corporation a big bonus on the way out the door, why shouldn’t he take it. Wouldn’t you? I know I would.
Look, maybe the shareholders have to have their heads examined but if they didn’t like what their CEO’s were doing, they could have stopped it. These are private corporations so they did what they wanted to do, dumb or not. And it wouldn’t have anything to do with us if we hadn’t decided to bail them out. So now it’s our business but should It be?
You see those guys are being made the fall guys and that’s fine. But they didn’t cause this mess, they are caught up in it just like everyone else is. And sure there is greed at work here. There is greed everywhere. It exists in corporate boardrooms, in the streets, in small businesses, in our homes, and most assuredly in the Congress of the United States. Most assuredly in the Congress of the United States where they have raised lying to an art form.
No one wants to look in the mirror. In this case certainly not the Democratic Party. So we have to look for them. If we don’t want this to get worse, we need to stop them from doing what they are doing. Even today, they are making the same foolish mistake. The new Obama stimulus plan has two mortgage assumptions: (1) mortgage modification and (2) mortgage forgiveness. Both are plans to give minorities taxpayer money to pay for the homes they have that they can’t afford.
Isn’t this what brought us to this terrible situation in the first place? Isn’t this the same dumb financial reasoning that caused this worldwide disaster? Sure it is. Okay, so then, why do we want to do it again?
I have no idea.
These people getting help are going to use someone else’s money to buy their homes. I predict if they have a new mortgage, many will default on that one as they are doing now. Old habits are hard to break.
But here is one caveat. If they do this, investors around the world now know what is going on and they are NOT going to buy this paper as they once did. Now they know better. So if Fannie buys it back from the lenders, Fannie is going to have its hands filled trying to move that paper. They are going to have to give away something to move paper that is really risky. There is an old saying: “fool me once, shame on you, fool me twice, shame on me.”
The Democratic Party was alone responsible for this collapse. They and their house organ in the inner cities, ACORN, browbeat and intimidated lenders into making bad loans to unqualified people in the inner cities until the loans collapsed. Sure the economy had some effect on these failures, but the reason it did was there was no safety margin in the loans. There was no down payment, there was no employment history, there was no credit check, there was no 38% safety margin – there was no safety zone whatsoever.
These loans were destined to fail from the time they were written. John McCain stood up in the Senate and told them they had to curtail what Fannie and Freddie were doing and he was all but hooted into silence. His bill was beaten down. This is the result.
And it’s too bad because we could have avoided everything that has happened and will happen. A little common sense goes a long way. But then you could have said that about Germany too. A little common sense would have gone a long way.
Did George Bush have anything to do with this economic collapse? Well, any administration can be seen as contributing to everything that happens on its watch so that extent he must have contributed, but there were no specific events under Bush that I have seen that seriously contributed to this mess. He tried at the last moment to derail it, but he was unsuccessful in a democratic congress. Perhaps when he had control of the congress between 2002-6, maybe then he should have done something. But who knew?
I have been reading a lot about our huge investment of money that we don’t have into alternative fuels that we also don’t have. It’s the same old bad approach to money. Let me warn you of this: over the next decade, we will have as many as 40 million alternative fueled vehicles on our roadways at a huge cost.
But, we will still have about 220 million combustion-engine vehicles on that same roadway. We better be drilling out own oil by then or we will be in even worse shape then we are now.
A decade of buying foreign oil at today’s rates is absolutely what we don’t need. If we are still paying for foreign oil, that means we will be spending about Six Trillion American dollars for something we have at home. That’s worse than dumb, that’s criminal.
Don’t believe we have anything near that will relieve us of our need for oil. The way to get off foreign oil, is to drill for our own. Right now.
Tomorrow will take care of itself.
If there is a tomorrow.
JOEY
