Time To Spell This Out For The Liberals – Again

Since I have read many recent posts from our resident liberals who are obviously clueless, apologies for the redundancy, as to what caused the collapse in 2008, I thought it might be a good idea to revisit that. Many of the liberals are of course still in the blame Bush, blame republican mode and pointing to, and ridiculing the absence of Bush at the RNC convention as further proof of that. The first thing I want to point out is that Bush is a very private man which is in complete contrast to the media hound that Clinton is. Furthermore, when he told us that he was retired, he meant it, another concept liberals have trouble understanding so the only surprise to conservatives would be if in fact he did show up. Secondly, the GOP has a very young and deep bench, so I am sure Bush had no desire to take time away from them, again unlike Clinton but of course the DNC bench is pretty thin anyway.

Now onto the cause of the collapse, which of course was the housing bubble. It is estimated that 1 in 7 jobs are connected with housing industry, so it was no surprise that the collapse of that industry sent shocks wave across the entire country and adversely impacted nearly every other industry. Liberals want desperately to blame Bush and deregulation for the collapse, but unfortunately for them, Bush did not enact one piece of financial deregulation legislation during his eight year term. Not one. The last piece of financial deregulation was enacted in 1999 under President Bill Clinton. Furthermore, Bush started ringing the alarm bells on the GSE’s as early as 2001, and then again in 2002, 2003, 2004, 2005, 2007, and finally in 2008. Now to be fair, those warnings were ignored by Republicans and Democrats alike in all of those years, but most recently were mocked by Rep. Barney Framk and Rep. Maxine Waters when she stated that “there is nothing wrong with Fannie and Freddie” in September of 2008:

Maxine Waters: Through nearly a dozen hearings, we were frankly trying to fix something that wasn’t broke.  Mr. Chairman, we do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines.  

Now the question is, why were the GSE’s so over leveraged? Well it was because of a misguided Washington DC policy that said that everyone, including the poor should have a shot at the American Dream and at home ownership. So banks were encouraged, in fact even threatened with Fed support, if they didn’t lower their mortgage standards and start giving more loans to more home buyers. Now, knowing that much of this paper was worthless, the banks started bundling these securities and started selling them to anyone who would buy them in an effort to rid themselves of the toxic assets. And the game continued, fueled even more by rising home values and higher valued loans, in addition to HELOC’s to home owners who saw their equity grow rapidly.  When the house of cards fell, no pun intended, all that money evaporated and the economy is still suffering. Now there is no question that financial sector greed played a role, but the real culprit is the federal government, so the real question you need to ask your self is – is handing out millions of mortgages to people who have little means to pay them back, a liberal policy? Or a conservative policy? As Walter Cronkite would say, “And that’s the way it is”.

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92 thoughts on “Time To Spell This Out For The Liberals – Again

  1. watsonredux September 8, 2012 / 8:54 pm

    From a 2004 White House Fact Sheet, proudly proclaiming President Bush’s progress in getting poor people to take on mortgages they couldn’t afford:

    Expanding Homeownership. The President believes that homeownership is the cornerstone of America’s vibrant communities and benefits individual families by building stability and long-term financial security. In June 2002, President Bush issued America’s Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago. President Bush’s initiative to dismantle the barriers to homeownership includes:

    American Dream Downpayment Initiative, which provides down payment assistance to approximately 40,000 low-income families;

    Affordable Housing. The President has proposed the Single-Family Affordable Housing Tax Credit, which would increase the supply of affordable homes;

    Helping Families Help Themselves. The President has proposed increasing support for the Self-Help Homeownership Opportunities Program; and

    Simplifying Homebuying and Increasing Education. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeowners.

    And Cluster remains perplex that anyone would think that President Bush had anything at all to do with housing bubble. Apparently he was just asleep at the wheel the whole time. That’s your best case, Cluster.

    • Cluster September 8, 2012 / 9:44 pm

      Show me where Bush asked, or advocated, lenders to ignore, relax, or lower the DTI ratios and/or FICO score standards. Also, show me where Bush advocated stated income loans. If you can do that, you might have something, other than that, you have nothing.

      You can try and win this argument with me, but you just can’t. Sorry.

      • watsonredux September 8, 2012 / 10:24 pm

        Cluster, do you really think that GWB’s throwing the might of the federal government at increasing home ownership simply had no effect whatsoever? The record shows that the industry embraced his program and did increase home ownership to lower income people. Gee, what could go wrong?

        Federal Reserve Chairman Alan Greenspan, Feb. 2004: “American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.”

        As you may know, he was a Bush appointee. And he said this at a time when home buying and refinancing was at a record pace. But that wasn’t good enough, let’s encourage even more! Greenspan also added, “Overall, the household sector seems to be in good shape.” Good call there.

        Cluster, by no means am I saying that it was all Bush’s fault. That would be as silly as you saying he had nothing to do with it.

      • tiredoflibbs September 8, 2012 / 10:47 pm

        Let’s not forget the requirements on banks and lending institutions put on them by the CRA. If a bank wished to expand – open new branches, acquire smaller banks or continue to operate, they had to prove that they did not discriminate against minorities. There was also a requirement to lend to minorities with no consideration of income or risk in their ability to pay. if a bank did so, minority groups such as ACORN would cause a stink or even file a lawsuit for discrimination.

        This started the snow ball. Soon these relaxed regulations went to everyone where many bought and sold houses (flipping the property). They received loans simply because they had a pulse!

        All these attempts at forcing “fairness” by the government caused the runaway mortgages.

        But you should not expect watty or mitchie to even consider your facts or even read them. They have shown that they will ignore them in favor of their talking points and spin.

        Pathetic.

      • Amazona September 9, 2012 / 10:10 pm

        Bush did not pass the CRA. Bush was not responsible for the escalating legislative pressures on lending institutions as part of the social engineering experiment begun with the CRA. Bush did not create the proble.

        Bush did not do enough to head it off as it gained momentum and for that he has responsibility—but he has been out of office for nearly four years and as I have pointed out, not one of the fatal flaws in the Leftist social engineering programs has been repealed, corrected, or eliminated under Obama.

        The exact same system that created the problem is still in place.

    • Cluster September 8, 2012 / 9:59 pm

      And another funny thing you just glide right past there my dear Watson, is that Bush called for, and begged for, more regulation starting in 2002 to keep his home ownership initiative from being abused. Let me see you spin that one.

  2. Victory4America! September 8, 2012 / 9:29 pm
  3. Ricorun September 9, 2012 / 1:59 pm

    In some ways I agree with Cluster and in some ways I don’t. One way I DON’T AGREE is his attempt to put the major onus of the financial meltdown on Fanny Mae, Freddie Mac, and the supposedly overwhelming intrusive perturbations they caused in the finance industry, and his characterization that the finance industry was sucked into it kicking and screaming. Rather, I think the evidence is very strong that the finance industry was a very willing partner at the very least, and very arguably the prime instigator. One way I DO AGREE with him is that the blame is bipartisan with respect to the government’s role in the whole mess. But that still doesn’t absolve the finance industry, who is very good indeed at greasing the wheels to their benefit on both sides of the aisle. And if I were required to point to the one thing which ultimately caused the bubble to burst, I would say it was the repeal of the Glass-Steagall Act through the passage of the Gramm-Leach-Bliley Act back in 1999 during the Clinton administration. How they managed to pull that off so shortly after the S&L fiasco is hard to imagine — and it’s IMPOSSIBLE to imagine without assuming major influence from the finance industry. Face it, those guys aren’t sucked into anything kicking and screaming. At least not in the last 60 years or so.

    On another thread on this site I offered this post, in which I made the point: “IMO, Big Brother doesn’t simply consist of big government, there’s a healthy portion of big business in it, too. Ideally the two should check and balance each other, but that’s often not the way it works. Too often they work in cahoots. But at least government is popularly elected. Corporate boards aren’t. So if you eliminate government from the equation, what do you have?” I didn’t get any responses to that post, but I mean it sincerely. And I mean it sincerely when I say that too often people get immersed in “party politics”, or “ideologies” if you will, without truly looking at the big picture (at least as I see it, lol!). In that respect I think it’s true that extreme Lefties would like “big government” to dominate society including the economic system which supports it — as if a popularly elected (one person, one vote) system of economics (as well as government) would be somehow better. I also think that extreme Righties would like to “reduce government to the size where it could be drowned in a bathtub” — as if a “one share, one vote” system of government (as well as economics) would somehow be better. I reject BOTH tendencies. Rather, I believe that in a global marketplace (which largely didn’t exist at the inception of the good ole’ US of A), both are essential. But I also believe that, at least in democratic (or truly republican — small r) societies a new framework is necessary to ensure that a more effective system of checks and balances are put into place to deal with this “new” locus of power, most obviously represented in the form of corporations which, like governments, are “too big to fail”.

    Anyone with me?

    • Amazona September 9, 2012 / 5:33 pm

      As usual, no one is with you, because you are a ponderous, pompous, pontificating blowhard who uses many words to say nothing.

      ” the finance industry was a very willing partner at the very least, and very arguably the prime instigator.”

      THE FINANCE INDUSTRY. That’s pretty broad.

      “Willing partner” in what?

      “Very arguably” means can easily be argued either for or against—typical rico dithering.

      Are you asserting that the “finance industry” INSTIGATED a social engineering experiment which forced it to act against its own best interests and violated every precept of prudent lending? Are you claiming that people in the “finance industry” decided “Hey, we’ve been making money for centuries by lending money to people who can pay it back, so maybe we can make even more money by lending it to people who can’t”?

      And then INSTIGATED laws which forced them to do this very thing?

      Did this INSTIGATION include having rabble like ACORN file federal discrimination suits against them when they turned down bad loan prospects, freezing their operations and essentially blackmailing them into lending money to people without incomes just because they were poor?

      Oh, those wily bastids!

      No, the “finance industry” got herded into a corner they did not want to go into, and then they found a way to make this less onerous. Then when they were pinched even more, they found ways to offset some of THESE losses. When the pressure increased, they found even more ways to dump the bad paper the feds had forced upon them.

      George W. Bush did not just try to repeal the CRA and unwind the whole stinking mess, but he did try to add regulatory power by shifting the sale of this bad paper over to SEC oversight.

      He dropped the ball by not overseeing the overseers, but the idea was a sound one.

    • Ricorun September 9, 2012 / 7:52 pm

      Amazona: THE FINANCE INDUSTRY. That’s pretty broad.

      “Willing partner” in what?

      With all due respect, hon, nothing you have ever said, nor even the way you phrased your present questions to the issues I addressed above, gives me any reason to respect your opinion on such matters. Maybe you should seek Cluster’s counsel on them. It would also be nice if The Bean Counter weighed in.

      Are you asserting that the “finance industry” INSTIGATED a social engineering experiment which forced it to act against its own best interests and violated every precept of prudent lending?

      I wouldn’t go quite that far, but if I were to pick a single word to describe their shenanigans, it would be, YES! After all, what “best interests” were at stake? As Dennis indicated, even John Dingel, a lowly member of the HoR, figured out that the Gramm-Leach-Bliley Act would allow banks to become “too big to fail.” But really, he was one among few, and I’m sure he had other issues on his plate at the time. On the other hand, if you’re a really smart person working for a really large company, and realized that the institution you represent had the opportunity to become “too big to fail”, with no apparent legal ramifications to yourself (let alone the company you represent), what’s the downside on any “experiment” you’re inclined to conduct?

      A single post on a back-water blog isn’t the place to connect all the necessary dots (there are lots of them), but let me sketch it out…

      The ability of the banks to insure their own products (which the Gramm-Leach-Bliley Act made possible) didn’t ensure complicity (or wider acceptance) on the secondary and tertiary financial markets. That required the complicity of the credit rating agencies. It was they who rated the various credit default swap paper, and other instruments as AAA+, which made them available to all sorts of mutual funds, pension funds, and the like. They certainly didn’t have to, but they got huge bonuses from the financial institutions creating the paper for rating them highly. Plus, the credit rating agencies had no legal responsibility to be honest. After all, they were just giving their opinion, nothing more. So why NOT lie?

      In the end, and as with all catastrophic failures in complex systems, it’s hard to point to one single locus as being responsible for the ultimate failure. And the same is true vis-a-vis the still on-going economic melt-down. Yes, Fannie and Freddie played a role. Yes, our elected officials played a role. Yes, allowing the same financial institutions to both issue and insure the paper they issued played a role. Yes, the lack of motivation (combined with the lack of responsibility) on the part of the credit rating agencies played a role. And yes, the fact that whole parts of the governmental agencies supposedly responsible for overseeing the whole process were essentially eliminated played a role.

      So… who’s fault is it again? Perhaps more importantly, what do the respective major parties propose to do about it? Finally, does anyone STILL wonder why I am indisposed to vote for any particular party over the other, as opposed to a particular candidate over the other?

      • Amazona September 9, 2012 / 10:07 pm

        So you can’t answer the question ” “Willing partner” in what?” because you don’t respect me. Got it.

        Once again, a lot of blablabla, some vis-a-vis and waffling.

        But what it comes down to is that without the CRA none of it would have happened, no one in the financial sector INSTIGATED a social engineering experiment that turned established lending standards upside down, whatever the financial sector did do they did because they were pushed into a corner by these experiments and federal legislation, and whatever they did was defensive in nature.

        And no one wonders anything about you. What’s to wonder about? You can’t commit to any particular political system, so you just don’t count.

      • Ricorun September 9, 2012 / 10:57 pm

        Amazona: So you can’t answer the question ” “Willing partner” in what?”

        Read the original statement again. If you still can’t understand it, ’nuff said. Maybe you need to bring someone to the table, with more credibility, to interpret for you.

        And what does the Cigar Rights of America organization have to do with the topic? Lol! Just kidding. But the fact remains that you are barking up a blip on the radar screen looking for a bogey man. Pardon my fractured metaphors, but really… follow the numbers, hon. More to the point, follow the real money. Or get someone to help.

        You claim I “just don’t count”. Perhaps so. But it’s still better than not being able to count in the first place.

      • Amazona September 9, 2012 / 11:50 pm

        rico, I know how desperately you want to respond to me but,sadly for you, you got nothing.

        Nothing but waaaa waaaaa waaaaa that is. What a petty little whiner.

        The financial sector did not instigate the flawed legislation that set up the entire artificial housing boom, the forced lending to unqualified borrowers, or the subsequent bust. Given their druthers they would have preferred to stick to tried and true lending practices, such as only lending money to people who could pay it back.

        All the sniveling in the world by all the sniveling Lefties in the world cannot change that.

        And all your catty snipes won’t change the fact that you can’t address what I said, and are reduced to petty bitchiness. Again, waaaa waaaa waaaaaa.

    • neocon1 September 10, 2012 / 7:12 am

      As usual, no one is with you, because you are a ponderous, pompous, pontificating blowhard who uses many words to say nothing.

      I concur…….REEK-O likes to hear him self pontificate about nothing.

  4. Laughing@Republicans September 10, 2012 / 8:43 pm

    TALKING POINT ALERT!!! TALKING POINT ALERT!!! BEWARE! THE FOLLOWING COMMENT IS NOTHING BUT A DNC TALKING POINT

    Hahahahahahaha! Romney just flipflopped on Obamacare. Yep… you republicans are really good at picking a Democrat Candidate… Romney. Another example of a delusional Republican picking a candidate. WTF is wrong with you guys? Can’t you recognize a Democrat when you see one. It scares me that you guys are actually voting!

  5. Laughing@Republicans September 10, 2012 / 8:49 pm

    TALKING POINT ALERT!!! TALKING POINT ALERT!!! BEWARE! THE FOLLOWING COMMENT IS NOTHING BUT A DNC TALKING POINT

    Nice job Republicans… picking a Democrat for a candidate. Romney flip flopped on health care. I am amazed you Republicans fell for it. LOL!!!!! Vote Democrat, Vote Romney!

  6. Laughing@Republicans September 11, 2012 / 7:51 pm

    TALKING POINT ALERT!!! TALKING POINT ALERT!!! BEWARE! THE FOLLOWING COMMENT IS NOTHING BUT A DNC TALKING POINT

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