Goodbye USA , Hello USSA!
Welcome to the United Socialist States of Amerika!!
The Wall Street Bailout as currently proposed is going to cost taxpayers $700 Billion. A $700 BILLION Bailout??? Half the Federal Annual Budget??
Let’s see… wasn’t it just 4 years ago that $87 Billion could run a WAR for a YEAR? And Congress balked at that figure (”I voted FOR the $87 Billion before I voted against it…”). What have we spent IN TOTAL on Iraq ? I don’t think we’ve gotten close to $700 Billion yet, and now they want to spend that amount on bailing out a bunch of misbehaving children on Wall Street??
I thought investors understood that they’re putting their money at RISK, and that RISK was part and parcel of the opportunity for high returns! Why is it now the responsibility of the average taxpayer to bail out those who managed their money with less responsibility than a drunken sailor? (With apologies to our sober and responsible men and women at sea!)
Understand this: It was not DEREGULATION that caused this meltdown of the markets. It was Democrat Do-Gooding REGULATIONS that caused it!
When congressional pressure was brought to bear on the Mortgage Industry to put more “disadvantaged” people into houses, it became necessary to reduce the creditworthiness standards required to qualify for the loans – as these people could not qualify under reasonable risk assessments for conventional lending at the time. So money became cheaper, and the “sub-prime” mortgage market was created with relaxed creditworthiness requirements. Teaser rates were offered to get people INTO houses they couldn’t afford. Adjustable rate mortgages were originated, making money for brokers – and then sold off to bigger players like Countrywide. With Fannie and Freddie saying “Go, Go, GO” while relying on government backing. This house of cards was BUILT by the Democrats trying to put unqualified people into houses. The Democrats could not abide the reality that SOME PEOPLE CANNOT AFFORD HOUSES! To them, the right to homeownership meant more than the right to purchase what you can AFFORD to buy. For these utopian dreamers, the right to home ownership was akin to the right to an attorney… “If you so desire and cannot afford, one will be provided for you…”
It is a fascinating exercise to lay Obama next to McCain on the issue of the collapse of Fannie/Freddie…
From Barack Obama:
We’re told that the current financial crisis and the collapse/bailout of Fannie Mae and Freddie Mac are the result of “Bush/McCain Policies.”
It seems like all he has to offer is to paint McCain as Bush 44… and exploit Bush Derangement Syndrome!
(Isn’t it interesting to note that behind Sen Dodd – the chairman of the powerful banking committee – Barack Obama received more money from Fannie/Freddie than any other lawmaker of the over 300 who received contributions between 1989 and 2008… and Obama was only in the Senate for 3 of those years!)
On the other hand; John McCain, who has never taken an earmark and has campaigned actively against them, sought to reign in the abuses of Fanny/Freddie in 2005 by co-sponsoring the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 1 90 http://www.govtrack.us/congress/bill.xpd?bill=s109-190 – which was shot down by Democrat resistance!
Note his statement from the Congressional Record, quoted below, in support of the Bill. Seems he had a crystal ball!! (This from a guy who stated self-effacingly that he doesn’t understand the economy as well as he’d like! If only more people understood it as well as he does!)
Statement by John McCain (R-AZ)
Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 1 90 http://www.govtrack.us/congress/bill.xpd?bill=s109-190 , to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
Think about this for a moment. Suppose you are a family earning $100,000 a year. You are $400,000 in debt including your mortgage. You live paycheck to paycheck, meeting current expenses and making payments on your debt – and putting money into savings or investments is a nice goal, but hardly a reality. You have a wild and irresponsible child who has run himself into $50,000 debt with drunken gambling. You then take a loan to hand him a $50,000 check to bail him out.
Is that SANE?? Yet that’s exactly what we, as taxpayers, are about to do if the proposed bailout goes through!
Our Manufacturing Industry has already been taxed and regulated into moving off-shore. Maxine Waters revealed that she wants to take over the Oil Industry. Hillary wants to take over the Health Care Industry. And now the Financial Industry is in the process of being taken over. Socialism IS conquering us!
Paulson and Bernake are about to END the USA as we knew it. Good bye, America … you’ve had a nice run.
Property values in New Zealand are now going to climb thru the roof!
Copyright © 2008 by Doug Edelman
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Last 5 posts by Doug Edelman
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Incorrect, it was the Republicans and their de-regulation that caused this.
And you Republicans must learn lying 101 in school… always comparing Socialism with Communism, when it isn’t the same thing.
Obama 08!
haha hilarious. so sad to see another pundit who completely misunderstands central banking. yeah you’re right, its all because the democrats wanted blacks to move in to my hood. blacks are 19% of the popoulation. maybe the author should go back and do some GED-level math.
banks made bad loans because their margins were wiped out by the central bank lowering rates excessively. when rates are low you cannot make money by lending to good borrowers. added to which, the ability for the bank to leverage itself (i.e. creating even greater risk) is enhanced by that same low rate regime.