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Further proof of Democrats’ fault over economy
The more I dig into the facts behind our current economic crisis, the more I find that points to Democrat corruption, short-sightedness, and obsession with political correctness.
- The Bush administration tried to reform oversight of Freddie Mac and Fannie Mae back in 2003, but was blocked by Democrats.
- John McCain co-sponsored the Federal Housing Enterprise Regulatory Reform Act of 2005 which was, of course, blocked by Democrats.
- JustBarkingMad.com posted a good article replete with linked evidence pointing to…you guessed it, Democrats: President Clinton and his Deputy Attorney General Jaime Gorelick
Several other bloggers (much more talented than I) have already detailed the evidence…
As with much of their showy populism, Congressional Democrats were more interested in the short term — and wholy self-serving nobility — of being perceived as championing the little guy than they ever were with the long-term effects such socially-engineered practices must necessarily have.
Morrissey compares the Democrats’ posture here as being similar to their posture on Social Security reform. But to my mind, the clearest analog in practice is to race-based affirmative action — where the short term pressure on universities to admit students of various ethnic backgrounds has led to a disproportionately high drop-out rate among those same students.
I’m all for evening the playing fields, be it in education or credit allocation. But simply wanting to do so doesn’t mean we should rely on easy, superficial remedies — particularly if all we’re doing is putting a Band-Aid over a wound that is deeply infected and requires more than a kind of Democratic Christian Science to heal it.
…it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street’s most revered institutions.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory.”
Dr. Walter Williams (George Mason University professor of economics):
Many politicians and pundits claim that the credit crunch and high mortgage foreclosure rate is an example of market failure and want government to step in to bail out creditors and borrowers at the expense of taxpayers who prudently managed their affairs. These financial problems are not market failures but government failure. The Community Reinvestment Act of 1977 is a federal law that intimidated lenders into offering credit throughout their entire market and discouraged them from restricting their credit services to low-risk markets, a practice sometimes called redlining. The Federal Reserve Bank, keeping interest rates artificially low, gave buyers and builders incentive to buy and build, thereby producing the housing bubble. Lenders were willing to make creative interest-only loans, often high-risk “no doc” and “liar loans,” in order to allow people to buy more housing than they could afford. Of course, with the expectation that housing prices will continue to rise, it was no problem for lenders and borrowers but housing prices began to fall, leaving some people with negative home equity and banks in trouble.
The credit crunch and foreclosure problems are failures of government policy. In fact, what we see now is a market correction to foolhardy government policy. Congress’ move to bailout lenders and borrowers who made poor decisions will simply create incentives for people to make unwise decisions in the future. English philosopher Herbert Spencer said, “The ultimate result of shielding men from the effects of folly is to fill the world with fools.”
Posted by FullMetalPatriot
12th gen. American, Constitutionalist, Harley-riding Texan, gun owner & NRA member, blogger, illustrator, Florida Gator alumnus. #TCOT
12th gen. American, Constitutionalist, Harley-riding Texan, gun owner & NRA member, blogger, illustrator, Florida Gator alumnus. #TCOT
[...] already posted evidence demonstrating how Democrats’ misguided priorities have fouled our banking system so thoroughly, and I’ve also contrasted Obama’s [...]