Sunday, September 28, 2008

Democrats Responsible for the Current Financial Crisis

http://www.kentuckypoliticalreview.com/?p=188

Filed Under Opinion/Editorial

History is a beautiful thing, but not if you’re a Congressional Democrat. History also bears out that our current financial crisis can be placed at the Democrat’s doorstep. For many that is no surprise, but for those who are not up to date on their facts, lest you be fooled by more Democrat blame shifting, here are the facts as reported in part in Bloomberg.com to back it up.

Fannie Mae and Freddie Mac has been the problem for several years and had the Republicans gotten their way back in 2005 this whole mess would never have happened. The turning point historically was back in 2005 when Fannie and Freddie were embroiled in accounting scandals. In late 2004 the Securities and Exchange Commission’s chief accountant told Barak Obama’s advisor, Franklin Raines who was Chief of Fannie Mae, that Fannie’s position on pertinent accounting issues was essentially off the charts of allowable interpretations. Legislation emerged in an attempt to create a “regulator” that would oversee Freddy and Fannie, imposing strict requirements on excessive risks.

Alan Greenspan in 2005, advised Congress of the need for the legislation and that it was of the utmost urgency. Referring to Fannie and Freddie, Greenspan said that if they “continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,” …. “We are placing the total financial system of the future at a substantial risk.”

A serious Fannie and Freddie reform bill was reported in the Senate Banking Committee, wherein a regulator could crack down and eliminate their risky investments. The bill didn’t become law because Democrats opposed it on a party-line vote in the committee. Republicans could not get the Senate to vote on the matter.

Peter J. Wallison, as reported in the American Enterprise Institute back in 2005, stated, “It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.”

What the Senate Democrats did in 2005 is unforgivable in view of the current collapse when the Democrats had an opportunity to stop it. Barack Obama, Hillary Clinton and Chris Dodd received substantial amounts of financial support from Freddie and Fannie over the years. Those senators and other Democrats threw the nation to the wolves in furtherance of their own political careers. In return for killing the reform of Freddie and Fannie, Obama got more than $125,000 and Dodd $165,000 in campaign contributions from employees and PACs of Fannie Mae and Freddie Mac. Clinton got $75,000.

Senator McCain was one of three sponsors of Senate bill 190 that would have prevented the crisis we are now in. Because we elected so many corrupt socialist Democrats to Congress, we are now going to pay the biggest price/tax, ever in a bailout of institutions once lead by none other than the same people who are now advising Obama on economic matters.

Jack L. Richardson, IV

Fannie Mae Five - Five Key Players Who Broke The System

http://www.sermonzone.com/blog/2008/09/22/fannie-mae-five-five-key-players-who-broke-the-system/

What do Chris Dodd, Barney Frank, Jim Johnson, Franklin Raines and Tim Howard have in common (besides being engineers on the Obama Express)?

I try not to just scrape the content of other sites but Mcauleys World has a great article with info that is essential for everyone to know.

Obama Advisor Jim Johnson

Obama Advisor Jim Johnson

Five Key Players In Washington who had chances to prevent the Financial Crisis but who, by their actions or inactions helped to bring down Wall Street.

Senator Christopher Dodd,

Democrat from Connecticut. Dodd has been in the Senate for 28 years. Dodd has served as Chairman of the Democratic National Committee. Dodd is Chairman of the Senate Banking Committee. As Chairman he had responsibility for acting as a “watch-dog” of Fannie Mae and Freddie Mac. Dodd has responsibilty for assisting in the selection of the CEO’s who run Fannie Mae and Freddie Mac. Dodd was a leading contender to be Obama’s Vice Presidential selection until his receipt of VIP loans from Countywide Financial were disclosed. http://www.nydailynews. com/news/us_world/2008/06/14/2008-06- 14_dems_deny_knowing_loans_had_vip_rates.html

It has been reported that Dodd received $7,000,000 in loans from Countywide. Dodd’s Committee was responsible for overseeing Banks in the United States. Countrywide is one of the leading culprits responsible for the lending policies that brought on this Crisis. Countrywide is under FBI investigation for Securities Fraud. http://www.nydailynews.com/news/us_world/2008/06/14/2008-06-14_dems_deny_knowing_loans_had_vip_rates.html

The Government Watchdog Group, The Center For Responsive Politics, reports that Senator Dodd received more campaign contributions from Fannie Mae and Freddie Mac than any other Senator.

Dodd voted against two proposed laws that would have strengthened oversight of Fannie Mae. Laws that could have stopped the current crisis long before it reached this proportion. http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190 http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=&contentId=A58272-2002Jul11&notFound=true

Dodd was a consistent opponent of the attempts to increase regualtion over Fannie Mae and Freddie Mac. Dodd opposed similar legislation that would have prevented the Enron collapse. Enron & Fannie Mae are examples of what happens when proper Accounting Practices are ignored. Both organizations collapsed. Dodd opposed accounting practices that would have prevented “NINJA” or “Liar” loans. To read about specific accounting practices see: http://www.foxnews.com/story/0,2933,424945,00.html

Wikipedia, a non-partisan web site, states the following about Dodd; The Center for Public Integrity criticized Dodd for “being the leading advocate in the Senate on behalf of the accounting industry.”[11][12] Political consultant and commentator Dick Morris wrote that Dodd had received more from accounting firm Arthur Andersen than any other Democrat and bore responsibility for trying to shield accounting firms from investor fraud liability in cases such as the Enron scandal.[13] Arthur Anderson was forced to surrender its license to conduct CPA business in the US. http://en.wikipedia.org/wiki/Christopher_Dodd.

Representative Barney Frank

Democrat Massachusetts, Frank has been in Congress for 27 years. As Chairman of the House Financial Services Committee, Frank “sits at the center of power”. http://en.wikipedia.org/wiki/Barney_Frank

In 2003, Frank rejected Bush administration and Congressional Republican efforts for the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis. [29] of the 1980’s. Under the plan a new agency would have been created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.[30] http://en.wikipedia.org/wiki/Barney_Frank

The site where this boast is posted, suggests that his action in opposing the regulation is a “badge of honor”. Imagine that - Barney Frank, the de-regulator.

“These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis,” Frank said. He added, “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

The legislation in question was aimed at creating additional “watchdogging” of Fannie Mae and Freddie Mac, watchdogging that would have prevented this Crisis. Frank also opposed the “watchdog” reforms presented by John McCain in 2002 and 2006. http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-

http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=&contentId=A58272-2002Jul11&notFound=true

Frank has consistently opposed any attempt to reform the practices at Fannie Mae or Freddie Mac. Frank has been described as “The Patron Saint of Fannie Mae”. http://www.stltoday.com/forums/viewtopic.php?p=6069270

Read specific examples of Frank’s obstruction of reform here: http://www.foxnews.com/story/0,2933,424945,00.html

In 2002, shortly before accounting irregularities were exposed at both companies, Frank said, “I do not regard Fannie Mae and Freddie Mac as problems,” reported the Wall Street Journal. After the Freddie Mac accounting scandal in 2003, Frank said, “I do not think we are facing any kind of a crisis.” http://mpinkeyes.wordpress.com/2008/09/17/barney-frank-and-chuck-schumers-role-the-fannie-mae-failure/

Jim Johnson

A former aid to Walter Mondale, a former executive at Goldman Sachs and Lehman Brothers, Johnson was an Executive Assistant for Vice President Walter Mondale (1977-1981) and a U.S. Senate staff member. Johnson also helped screen running mates for Democratic presidential nominees Walter Mondale in 1984 and John Kerry in 2004.
http://www.associatedcontent.com/article/781141/barack_obama_taps_former_fannie_mae.html

The National Review suggested - “Look at the former Fannie Mae Chief Obama choose for the job (selecting Biden). …. specifically, look at the Office of Federal Housing Enterprise Oversight’s May 2006 report on mismanagement and corruption inside Fannie Mae, and you’ll see some interesting things about Johnson. Investigators found that Fannie Mae had hidden a substantial amount of Johnson’s 1998 compensation from the public, reporting that it was between $6 million and $7 million when it fact it was $21 million.” http://corner.nationalreview.com/post/?q=NWM3MDFkM2QwNzRjODk3NWZhZTc3OGIxNDQ4Nzc2NDc=

While he was at the in charge at Fannie Mae, Johnson acknowledged his goal, “”We are on course to meet the $1 trillion target we set, we’re ahead of schedule on the 11 initiatives put in place to carry out the commitment, and our efforts already have fundamentally transformed how millions of American families now gain access to the mortgage credit system.” The Trillion dollar commitment included the use of “NINJA” and “Liar Loans” http://www.highbeam.com/doc/1G1-18094342.html

In order to meet this 1 trillion target, Johnson oversaw the implementation of the accounting schemes that came to light during his successor, Franklyn Raines, term as Fannie CEO. http://www.minnpost.com/stories/2008/06/03/2078/obama_turns_to_trusted_political_insider_jim_johnson_for_key_campaign_role

Johnson also took preferential loans from Countrywide while serving as CEO at Fannie MAE. The same type of loans, from the same bank, as those taken by Senator Chris Dodd. http://online.wsj.com/public/article_print/SB121321030258665089.html

Post-Enron, the Sarbanes-Oxley law, requires disclosure of this type of “special deal” loan. No disclosure was made by Johnson. http://online.wsj.com/article/SB121314375651462773.html?mod=opinion_main_review_and_outlooks . Countrywide Financial Corporation is a diversified financial marketing and service holding company engaged primarily in residential mortgage banking and related businesses. In 1997 Countrywide spun off Countrywide Mortgage Investment as an independent company called IndyMac Bank.[1] Federal regulators later seized IndyMac Bank. http://en.wikipedia.org/wiki/Countrywide. A criminal investigation has been launched by the FBI into possible Securities Fraud violations by Country Wide. The fraud involves the resale of subprime moragaes to the financial markets, including Fannie Mae. http://www.latimes.com/business/la-fi-countrywide9mar09,0,2300832.story http://www.boston.com/business/articles/2008/03/09/fbi_begins_criminal_inquiry_into_countrywide_paper/ http://www.usatoday.com/money/companies/2008-03-09-countrywide-probe_N.htm

Johnson hid part of his income, received preferential loans from a major lender invoved in this crisis and fostered the implementation of accounting practices that masked the sub-prime losses by stating the losses as assets.
Johnson went on to work for the Obama campaign. The Obama campaign denies any current involvement, however, one press report notes that Johnson helped prepare Obama for an economic speech last week. http://forestbrowne.newsvine.com/_news/2007/09/17/967528-obama-reappraise-wall-street-values-
Franklin Raines
Raines was a former member of the Carter and Clinton Administrations. In the Carter Administration Raines served as Associate Director for Economics and Government in the Office of Management and Budget and Assistant Director of the White House Domestic Policy Staff , in the Clinton Administration Raines served as the Director of the U.S. Office of Management and Budget. http://en.wikipedia.org/wiki/Franklin_Raines

Raines was Chairman and CEO at Fannie Mae.

Raines was forced to retire from this position at Fannie Mae when Regulators discovered severe irregulaties in accounting activities. At the time of his departure The Wall Street Journal noted, Raines, who long defended the company’s accounting despite mounting evidence that it wasn’t proper, issued a statement conceding that “mistakes were made and that he would assume responsibility as he had earlier promised. Reports indicate the company was under growing pressure from regulators to shake up its management in the wake of findings that the company’s books ran afoul of generally accepted accounting principles for four years.” http://www.washingtonpost.com/wp-dyn/content/discussion/2006/02/23/DI2006022301805.html

Fannie Mae had to reduce its surplus by $9 billion because $9 billion in liabilities were listed as assests. http://www.economist.com/finance/displaystory.cfm?story_id=E1_PVQGGTT
Raines total compenstaion package while he was at Fannie exceeded $90 Million. http://www.politico.com/news/stories/0708/11781_Page2.html

The Goverment filed suit against Raines when the depth of the acounting scandel became clear.” http://housingdoom.com/2006/12/18/fannie-charges/.

The Government noted, “The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner.” http://housingdoom.com/2006/12/18/fannie-charges/

http://www.youtube.com/watch?v=Aq7DGTggpx0

The Court fined Raines $3,000,000 and fined Fannie Mae $400,000,000. http://en.wikipedia.org/wiki/Franklin_Raines

In June 2008 The Wall Street Journal reported that Franklin Raines was one of several public officials who received below market rates loans at Countrywide Financial. http://en.wikipedia.org/wiki/Franklin_Raines. Raines joined Jim Johnson and Christopher in receiving the VIP loans.

Raines has been reported to be an Economic Advisor in the Barack Obama Campaign. At present the Obama Campaign denies that Raines is associated with the Campaign. At least two web sites have re-written prior bigraphies on Raines. The Wikipedia Biography on Raines has been rewritten, deleting a claim that Raines was an Obama Advisor. http://en.wikipedia.org/wiki/Franklin_Raines The Web site “Top Blacks, Positive Profiles of People of Color” has not only rewritten the Raines profile to delete such a reference, the profile is no longer available at the site. http://www.topblacks.com/Home.aspx

Tim Howard

Was the Chief Financial Officer of Fannie Mae. Howard, “was a strong internal proponent of using accounting strategies that would ensure a “stable pattern of earnings” at Fannie. In everyday English - he was cooking the books. http://www.signonsandiego.com/uniontrib/20041230/news_lz1ed30bottom.html http://www.usatoday.com/money/companies/regulation/2004-09-24-fannie-cfo_x.htm

The Government Investigation determined that, “Chief Financial Officer, Tim Howard, failed to provide adequate oversight to key control and reporting functions within Fannie Mae,” http://www.usatoday.com/money/companies/regulation/2004-09-24-fannie-cfo_x.htm

On June 16, 2006, Rep. Richard Baker, R-La., asked the Justice Department to investigate his allegations that two former Fannie Mae executives lied to Congress in October 2004 when they denied manipulating the mortgage-finance giant’s income statement to achieve management pay bonuses. http://www.usatoday.com/money/industries/banking/2006-06-14-fannie-execs_x.htm

Investigations by federal regulators and the company’s board of directors have since concluded that management did manipulate 1998 earnings to trigger bonuses. Howard, like Raines, resigned under pressure in late 2004. http://www.usatoday.com/money/industries/banking/2006-06-14-fannie-execs_x.htm http://michellemalkin.com/2004/09/23/the-fannie-mae-freddie-mac-racket/?print=1

Howard’s Golden Parachute was estimated at $20,000,000. http://accounting.smartpros.com/x46646.xml

Five Key Players Who Broke The System « Mcauleysworld’s Weblog.

Devastating!... Dems Refuse to Reform Freddie & Fannie in 2004 (Video)

http://gatewaypundit.blogspot.com/2008/09/devastating-dems-refuse-to-reform.html

Saturday, September 27, 2008

Devastating!... Dems Refuse to Reform Freddie & Fannie in 2004 (Video)

Here you go-- Video proof that Democratic leaders refused to reform over Fannie Mae and Freddie Mac.
...Don't expect to see this on the nightly news.

Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis:

At this 2004 hearing Democrat after Democrat, including Rep. Barney Frank and Rep. Maxine Waters, covered up for Fannie Mae and Freddie Mac.
Democrats covered up and killed legislation that would reform their cash cows.
Obama has received $105,849 from troubled mortgage giants Freddie Mac and Fannie Mae:

After having served less than 4 years in the US Senate and spending most of that time campaigning, Barack Obama was still able to collect $105,849 from mortgage giants Freddie Mac and Fannie Mae since 2004.

Former Fannie Mae Chairman Jim Johnson is still advising Barack Obama.
Hat Tip Milton

George Bush John McCain Bailout Fannie Mae Freddy Mac Oversight Reform Sought Proposed Attempted but Democrat Party’s Barney Frank Chris Dodd Barack O

http://dancingfromgenesis.wordpress.com/2008/09/23/george-bush-john-mccain-bailout-fannie-mae-freddy-mac-oversight-reform-sought-proposed-attempted-but-democrat-partys-barney-frank-chris-dodd-barack-obama-hillary-clinton-operatives-obstructed-congre/

Barack Obama sure hangs out with guys who love to defraud the U. S. government, such as campaign fundraiser Tony Rezko, who received big money from the federal government for housing projects in Chicago which were never completed, and Franklin Raines and Jim Johnson, advisers for Obama, who ran Fannie Mae into the ground with millions of loans to unqualified applicants, as well as, Chris Dodd and Barney Frank in Congress, who with Obama and Hillary Clinton obstructed republican attempts to reform Fannie Mae and Freddy Mac, more than a few attempts by President Bush and John McCain, as detailed at http://hotair.com, the articles posted Sept. 16 and 17 on the subject, and so, we are now faced with this financial meltdown from the mortgage market fraud perpetrated by the Democrats.

The Democrats have covered for Fannie Mae for years, while Johnson and Raines loaned billions of dollars to unqualified loan recipients, because of their color often, affirmative action infiltrated into financial markets, which obviously is a recipe for disaster, because, afterall, if you aren’t judging the ability of someone to pay back a loan, then effectively, you are giving the money away, knowing that the government will have to step in later to stand up for the debt, at the american taxpayers’ expense. It’s an affirmative action redistribution of wealth through fraudulent business practices, nurtured by the Democrats, opposed by the Republicans led by presidential candidate John McCain and his brilliant runningmate selection, Sarah Palin, who are polling very well now, as Americans are learning more about Obama’s destructive alliances.

Barney Frank and Chris Dodd Should Resign

http://www.kentuckypoliticalreview.com/?p=201

Chairman of the House Financial Services Committee, Barney Frank and Senate Banking Chairman Chris Dodd should resign immediately. Both are responsible for overseeing these financial institutions in the House of Representatives and the Senate and this crisis occurred on their watch. Their failure is about to cost the American taxpayer at least $700 billion, more than the entire Iraq war cost.

A review of recent Congressional history reveals that Barney Frank and Congressional Democrats have been obstructing attempts by Senator John McCain and President Bush to fix the problem for the past four years. A U.S. News article chronicles Frank’s obstruction, quoting from an interview by CNN’s John Roberts speaking to Rep Franks:

The Wall Street Journal says in the year 2000 when Representative Richard Baker proposed Fannie Mae and Freddie Mac reform you dismissed it. New York Times reports that an administration proposal in 2003 to reform Fannie Mae and Freddie Mac was met by response from you where you said, “I do not believe that we’re facing any kind of crisis.”

Senator Dodd has also been obstructing reform for years while being the largest recipient of contributions from Fanny Mae and Freddie Mac of $165,000, followed next by Barack Obama receiving $126,000 since being elected to the Senate in only 2004. Franklin Raines, former CEO for the failed Fanny Mae, pocketed $90,000,000 in just five years while allegedly cooking the books at Fanny Mae. Now Raines is a top advisor to Barack Obama.

Furthermore, the roots underlying the financial crisis can be traced back to the declining dollar which was caused primarily by the high cost of energy and Alan Greenspan at the Fed keeping interest rates too low. The Democrats are solely responsible for our energy crisis. They have obstructed domestic drilling, nuclear energy and new refineries for decades on the pretext of environmentalism.

John McCain called for the resignation of former Republican Congressman and now Chairman of the Securities and Exchange Commission Christopher Cox who was on watch at the SEC during this crisis. Now we must call for the resignation of Rep. Barney Frank and Senator Chris Dodd who are responsible for monitoring this very type of activity for the people of the U.S. They have not done their job at the least and may be involved in malfeasance, taking bribes to maintain the status quo. They certainly should have nothing to do with formulating a bailout. This is the Democrat parties Enron, although on a far grander scale. It is time for accountability in government.

Michael Macfarlane

There's a Big Idea at Stake in the Democrat-Caused Financial Crisis

http://www.rushlimbaugh.com/home/daily/site_092208/content/01125108.guest.html

September 22, 2008


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BEGIN TRANSCRIPT

RUSH: Okay, as to the bailout here, folks, a lot of people over the e-mail are very confused about this, even some of my closest circle, because they think, "Well, the bailout's a bad idea, but what if we don't? Is everything going to crash around it? This is more nuance than, you know, just cut-and-dried, up-or-down, liberal-versus-conservatism." I think, folks, a lot of people say, "You know, we're beyond the point of assigning blame here. That's not the problem. What we have to do is understand what to do in the future." Well, you can't understand what to do in the future unless you properly assign blame, and there is so much blame here. All of this could have been avoided, were it not for liberal social engineering brought about by the Clinton administration. It actually started with Jimmy Carter, but it intensified during the Clinton years, and the whole purpose of it, of course, was to play the race card, to get into class envy, and to go out and buy votes.

There's a piece at Bloomberg.com today by Kevin Hassett. Kevin Hassett is director of economic policy studies at the American Enterprise Institute. He's also a Bloomberg News columnist, and he is an advisor to McCain. Let's be up-front in this presidential campaign. "How the Democrats Created the Financial Crisis." He says it's not complicated. It really isn't complicated. "Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally. Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools."

Now, there's no... AAA subprime (laughing), uh -- Well, it's a little bit of an oxymoron. "[I]n 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie 'continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,' he said. 'We are placing the total financial system of the future at a substantial risk.' Fannie Mae and Freddie Mac. What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

"If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed. But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter...." And it goes on to mention here "many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years."

It's interesting, too, you've seen the list of donations that have gone to all the Democrats of Fannie Mae. At the top of the list of course is Chris Dodd; number two is Obama. However, if you reorder that list and look at the people who have received the most in the least amount of time, Obama is at the top of the list by far and away. He's been in the Senate two and a half years, and he's the leader. Dodd got his money over the course of many years. So you have to ask, "Why in the hell was Obama given so much money by Freddie Mac so fast, so quickly?" The tentacles, my friends, the tentacles here -- and I say this with all candor -- reach deep into the Democrat Party. Let's talk change for a moment. The most important and far-reaching change needed has been brought home definitively by all this turmoil in the financial markets, precipitated by the subprime mortgage crisis.

There is a singular culprit here, and that is it -- and there's a great idea at stake here, too, and the idea is that the free market measures itself and handles itself better than the government running. The great idea that we're about to throw away with this bailout is that the government can run things better. The government can take care of you, the government can insure you, the government can protect you, the government can provide for you. This is an idea which has been shown to fail around the world. We are about to incorporate it here if this bailout goes through as designed. This should not be a mystery anymore to anybody because the Drive-By Media refuses to do its job. Last week the roots of this crisis were explained, and its authors were identified. Long-serving congressmen and senators, overwhelmingly Democrats, working in concert with the liberal allies in the bureaucracies and the management of these so-called companies -- really government agencies, Freddie Mac and Fannie Mae. They're government agencies, they always have been -- and liberal special interests and advocacy groups hijacked federal housing policies and turned them into patronage programs. The quasi-governmental entities were at the root of this problem because what they did forced the hand of genuine private mortgage companies to conform to the same irresponsible lending policies as Fannie and Freddie had adopted if they were to survive. And it also fostered creation of sleazy mortgage companies whose business model was making lousy loans in the expectation of being able to dump 'em later through new financial instruments that had been created just to do that, and I have just gotten started.

BREAK TRANSCRIPT

RUSH: This bailout crisis, my friends, it is crucial I think here to understand the truth. The policy perversions that led to this mess began with the active connivance of the Clinton administration and were perpetuated by leading Democrats in the House and Senate. There were some responsible Republicans supported by the Bush administration time and again attempted to avert the disaster they saw coming. They wanted new regulatory agencies and so forth, but their reform efforts were defeated in the House and the Senate. Barney Frank in fact said, "There's nothing wrong." (doing Frank impression) "There's nothing wrong," is what he said. Now, this emergency bailout friends can go either way. It can fix the underlying problem or merely represent another opportunity for another leftist hijacking, and Obama and Pelosi are out there saying, they want oversight over this. You know what that means?

Whenever this kind of money is going to be spent by the government on something, Democrats are going to get their hands in it, and they're going to reward people like ACORN. They're going to try to. They're going to try to build on their social programming and networking here with this kind of money outstanding that is supposedly aimed at shoring up the US economy. Now, McCain and Palin can claim to recognize the problem, and they can commit themselves to fixing it. But they can't deliver the needed change on their own. They need support in the House and Senate to do that. Right now, there is no prospect of them getting that help, not with Pelosi and that odious and compromised Barney Frank, Henry Waxman, Chuck Schumer, Christopher Dodd in the House and Senate leadership. The names I just gave you have their fingerprints all over this. Plus names that you were told of last week and identified last week: Franklin Raines, Jim Johnson, Janet Reno, Jamie Gorelick.

It is a stain, it is a stench, and it is directly traceable to liberal Democrat policies and desires. We know who caused the problem! We know that we can only expect the change we need by replacing them with congressmen and senators pledged to a different course with a fundamentally different concept of how the federal government can best serve the interests of the American people. That's the change we need. The change we need is bye-bye Barney Frank. The change we need is get rid of Chris Dodd, get rid of Nancy Pelosi, get rid of all of these Democrats, Chuck Schumer. Get rid of all of these people. That's the change we need, pure and simple. Isn't it interesting that the mortgage debacle and the resulting impact on our financial markets is said to have begun with deregulation? Ha! And isn't it interesting that no one in the administration challenges this, and of course nobody in the Drive-By Media challenges it, and McCain doesn't even challenge it.
The reason is that we are witnessing the biggest nationalization of our economy since the Great Society and the New Deal, and we are all on the sidelines as it happens, and this is what I'm talking about this very important idea -- an idea that defines the greatness of this country -- on the line. And that idea is that government is not the provider, the guarantor, the protector, and the redeemer for every living soul and institution in the country, particularly in this case when the problems can be traced back to people in government. Now the very people who created the problem have set themselves up to be in charge of the whole program, now blaming capitalism, blaming the private sector for this. The fact is this: When Jimmy Carter was elected his first year, 1977, he and the Democrat Congress put in place the Community Development Act, and the purpose of this account was to pressure private financial institutions to make risky loans to poor people.

That was the purpose. These loans would not have been made based on any commonsense business model, but the Carter administration decided to hell with business models and use the law to pressure the issuance of these loans for the typical reasons liberals do these things: to buy votes, to create dependents, and to create love and respect and devotion to the Democrat Party. Groups like ACORN -- which exist, by the way, in ACORN's case -- exist for the express purpose of committing voting fraud. That's one of the groups that Obama, you know, worked with as a street organizer in Chicago. Groups like ACORN and others were also behind this. They allied themselves with the Democrats and the administration and Congress. Now, ACORN is a "grassroots" group that is backing Obama for president, they're close to him, they were close to him when he was a man of the street agitating things in Chicago. But none of this was good enough for the Clinton administration in 1995.

A renewed and more vigorous emphasis was made on making these loans. Janet Reno and Roberta Achtenberg (who was a former radical member of the California board of supervisors and an assistant secretary of HUD, Housing and Urban Development), put enormous pressure on financial institutions to make more and more risky loans, and they began accusing banks of redlining when they didn't meet the level of risky loans that they had imposed on them. They then prevented these financial institutions from expanding and merging unless they met a certain level of community redevelopment loan making -- and they threatened these institutions with government action. Reno herself said, "There will be investigations if you do not follow these regulations. If you don't make loans to these people who essentially can't pay 'em back, we're going to investigate you, and we're going to tie you up."

We got the quotes, from a Cybercast News Service story. Subprime mortgages and things like them, are mortgages given to people who can't afford traditional mortgages. They can't afford down payments. They can't afford to make the going rate of interest payments. So new types of loans were invented to get these people into homes but which were extremely risky. There were no down payments, low introductory rates, in some cases no closing costs. Fannie Mae and Freddie Mac, in order to show ever-increasing assets on their balance sheets, would buy up these subprime loans, but the greater the asset, the executives at these government-run companies would show more assets, but they're worthless. One of the problems now is you've got a market, but nobody knows what the market is. There isn't a market right now. It's tumbled. Some people are saying that there's an outside chance that the market is so low that the taxpayer (i.e., the Treasury) could really win big with this bailout, given how little they're going to have to spend to buy up all these assets.

But the way it worked inside Fannie Mae and Freddie Mac was this. They loaded up on these worthless assets; they would put them, predate them into prior years so they show fantastic asset growth. It was on the asset growth that their bonuses were determined, such as Franklin Raines and Jim Johnson and all the other people, Daniel Mudd who worked at these places who walked out of there with anything between 75 and 90 and a hundred million dollars. Now, this is the short story behind much of the debacle that we're dealing with today. I mean, there are other issues out there, but this is the systemic underpinning of the crisis. All roads three-day Fannie Mae and Freddie Mac, contrary to what they're trying to make you believe -- and this is what really infuriates me and makes me passionate to get through to everybody I can.

The issue is not a runaway, unregulated free market. The issue is not the failure to regulate. The issue is not stupid and crooked executives throughout the banking industry doing stupid and crooked things, although there was some of that. There's some of that in every area of life. But that's not the cause. What you need to understand, my good friends, is that this situation has occurred and is occurring as a direct result of government policies: liberal government policies that were used to force the issuance of trillions of dollars in risky loans that people could not pay back. And when they couldn't pay them back, people couldn't get the asset value that they had sold and packaged the mortgages for, and everything crashed, everything crumbled. And about this bailout, I want to call your attention to something.

How many times in the last six months have we read stories about the Fed adding to liquidity here or helping this institution there? We've already had a bunch of bailouts. We've already had a government stimulus package to help the US economy, and now Obama's talking about wanting another one. These things have a history of not working. They may show short-term relief, but over the long haul, world history is replete with example after example after example that centralized economic planning does not work. The Democrats on Capitol Hill, and primarily I'm talking here about Chris Dodd and Barney Frank, were in the middle of this from day one. They supported the Carter and Clinton administrations when they pressured the private sector to make these risky loans.

They protected Fannie Mae and Freddie Mac when they bought up these risky loans -- and in 2003, when the Bush administration attempted to impose some accountability on Fannie Mae and Freddie Mac when they tried to force them to accept outside auditors, require better capitalization. You know what the leverage rate was? They only had to have a dollar of cash on hand for every 30 bucks they had borrowed. That kind of leverage is just obscene. So they wanted to change that; they wanted more capitalization. But guess who blocked it? Good old Barney Frank and Chris Dodd stood right smack-dab in the way. When, in 2005, Republicans in Congress tried to do the same thing, they were obstructed as well. In fact, Chris Dodd and Barney Frank said there was nothing wrong with these government-run companies and the Republicans were trying to scare people.

We have, now, ladies and gentlemen, a clear definition of affordable housing, according to Barney Frank. Affordable housing is giving people houses that you and I pay for. That's affordable housing -- and I'm not talking about, you know, tenements and housing projects. I've heard Barney Frank talk about this enough times. Every time he would talk about this he said, "We can't get rid of the affordable housing, affordable housing." "Affordable housing" to Barney Frank and the liberals is making sure that every liberal Democrat in this country who can't afford a house gets one. And then affordable housing, after they have been given the house -- under the pretext of buying it, of course -- but when they can't pay it back, guess what Barney Frank and Chris Dodd want: Let 'em stay in the house. In this new bailout legislation, Barney says, "You can't kick them out of the house, and we want limits on CEO pay." Any precondition on this bailout must include Barney Frank and Chris Dodd resigning.

BREAK TRANSCRIPT

RUSH: Now, wait, folks. This gets even better. Welcome back to the Rush Limbaugh program, meeting and surpassing all audience expectations on a daily basis. So now we have Hank Paulson, the Treasury Secretary, ex-Goldman Sachs and a Democrat appointed by President Bush, an old buddy of Chuck-U Schumer, by the way -- and who isn't in this mess a friend of Chuck Schumer's? Schumer was involved in all of this as well. And now we got Hank Paulson in charge of, not elected, the most far-reaching government takeover of a huge chunk of our economy ever.

One little aside here, folks, one little aside, and I promise not to lose my place. This amount of money that we're talking about, 700 billion -- and let's just admit it's going to be a trillion before it's all done with, okay? Even that will pale compared to the cost of Algore's global warming plans if Democrats get their hands on that. Global warming tactics, their plan to fix global warming will cost more than even this. I'll have more on that in due course.

This is the most far-reaching government takeover of a huge chunk of our economy ever, and it still isn't enough. It's still not enough for Barney Frank. Paulson wants a slush fund. He basically wants $700 billion to buy up bad loans as he and only he sees fit. Now you have Obama and Pelosi saying they want oversight. Ha. That means ACORN is going to get 500 mill here, some other little Democrat group, teachers union is going to get some money here, Maxine Waters is going to get about a thousand dollars for each of her constituents to pass around out in California. I mean none of this is official, but this is the way these things work. Now, keep in mind these are bad loans in the sense that they were risky. But the loans have not actually defaulted yet, so unlike the savings and loan failure, this would be far more reaching. The government's going to buy up loans before they default. That's called affordable housing, the way the Democrats define it. Barney Frank, among other things, says that this is unacceptable unless even more money is spent helping more people facing foreclosure. Barney Frank's definition of affordable housing is that if they're about to be foreclosed on for not being able to pay, they get to stay in the house.

So one of the main individuals responsible for the current financial problem, wants the American taxpayer to subsidize not only the buyout of bad loans that have yet to fail, but he wants to spend even more money to shore up these individuals who, in many cases, shouldn't have bought a house in the first place. The left sees this as their opportunity to change the nature and identity of this economy. And the Republicans are going right along with them, including the president, including McCain. There's no way around this. I mean neither of them, and no one in the party seems capable of exposing what's going on here, and opposing it. It's not enough to say that you're against the latest bailout. You need to explain why. You need to stop with the populist left-wing rhetoric about needing more regulations, you gotta stop beating up on Wall Street, you gotta stop pandering, you gotta realize, Senator McCain, you are running against Obama. You're not running against George W. Bush and Wall Street. You are running against Senator Obama.

Sarah Palin understands it. She pulled your irons out of the fire and you're about to throw 'em back in. This idea that Andrew Cuomo should be Securities and Exchange Commission chairman, that's what McCain said last night on 60 Minutes. I kid you not, McCain would appoint Andrew Cuomo. From The Village Voice, ladies and gentlemen, in August 5th of this year, a whole story: "Andrew Cuomo and Fannie and Freddie -- How the youngest Housing and Urban Development secretary in history gave birth to the mortgage crisis." Andrew Cuomo is up to his neck in this. This is a 16-page printed story on a computer printer from The Village Voice. Cuomo jacked up low income, low mandates on Fannie and Freddie, and he is at the head of the line, too, with other Democrats on this whole crisis, and McCain talks about putting him in the -- (sigh).

END TRANSCRIPT
Read the Background Material...

Bloomberg: How the Democrats Created the Financial Crisis: Kevin Hassett
IBD: Congress Lies Low To Avoid Bailout Blame
Newsbusters: IBD: Carter More to Blame for Financial Crisis Than Bush or McCain
Village Voice: Andrew Cuomo and Fannie and Freddie
FOX: Obama Laments Debt, But Promises Billions for Anti-Poverty Program
American Thinker: Mistress of Disaster: Jamie Gorelick
Wall Street Journal: The GOP Leads a 'Socialist' Bailout
National Review: The Bailout. Has Everyone in Washington Lost His Mind?
American Spectator: Financial Collapse Democrats

Obama’s Economic and Moral Bankruptcy

http://noquarterusa.net/blog/2008/09/18/obamas-economic-and-moral-bankruptcy/

At some point the truth police must show up and arrest Barack Obama for reckless endangerment of the truth for his role in the Wall Street meltdown. Barack wants to portray the chaos in the financial markets as the fruits of letting irresponsible capitalists run amuck when the reality is that he has been part of the symbiotic incest that has helped feed and abet the activities that now have the Federal government scrambling to contain a global financial meltdown. Although Barack is not responsible for the poor decision making of the executives at Bear Stearns, Lehman Brothers, AIG, and Fannie Mae, he is to blame for surrounding himself with those folks as his advisors and for taking more of their money than most members of Congress. Where the hell is the media in focusing attention on his duplicity?

Let’s start with the money. Compare the money Barack has raised fromfrom lobbyists with that McCain has snagged. Obama received a grand total (per Open Secrets) of $1,223,737.00 from Fannie Mae, Freddic Mac, Lehman Brothers, AIG, and Bear Stearns while John McCain received only $258,075.00.

John McCain $6,550 (Fannie Mae) $9,100 (Freddie Mac) $117,500 (Lehman Bros.) $36,875 (AIG) and $88,050 (Bear Stearns)

Barack Obama $137,950 (Fannie Mae) $68,750 (Freddie Mac) $370,524 (Lehman Bros.) $75,899 (AIG) and $570,614 (Bear Stearns)

So, why in the hell does Barack Obama, a first term Senator, get more money from financial institutions who have helped produce the worse financial crisis in a century than the crusty old so-called Washington insider John McCain?

Because Barack played ball with these folks. If you start with his longtime fund raiser, Tony Rezko, you find a direct road to Nadhmi Auchi, a British-Iraqi billionaire who loaned Tony Rezko $3.5 million shortly before Rezko helped Obama buy a house he could not then afford. Oh yeah, almost forgot. Auchi is one of the largest shareholders in the bank that stands the most to lose from Lehman Brothers’ woes. Is it likely that one of the reasons Obama got so much dough in the first place from the Lehman folks was because of the Auchi ties?

When it comes to getting favorable loans that the average American cannot obtain, Barack hangs with the right folks. Franklin Raines and Jim Johnson both got sweetheart deals fromfrom Countrywide. So what? Well, both Raines and Johnson ran Fannie Mae and Raines paid almost $25 million dollars for his role in a Fannie Mae accounting scandal. As I noted in an earlier post, Obama initially named Johnson to head up his VP search team.

But wait, there is more. Penny Pritzker. Our own Uppity Woman dished the dirt here. In a nutshell, “one of the first subprime lenders to stick it to borrowers and have her bank seized is a woman named Penny Pritzker, who just happens to be Barack Obama’s campaign Finance Chair (as confirmed on April 3, 2008) and a potential Secretary of the Treasury in an Obama administration.”

What does this say about Barack’s “judgment?” When it comes to losers and thieves he sure knows how to pick them. It is one thing to get yourself a sweetheart home loan with the help of a guy being investigated on federal corruption charges (and subsequently convicted). An isolated bad choice? Wait a minute. Then what about Raines, Johnson, and Pritzker?

Why is it that the major financial institutions in the toliet or heading there all wanted to give this first term kid a whole bunch of money? They were not tossing him dollars just because he cleans up well, looks good in a suit, flashes a nice smile, and speaks proper English. They wanted something.

I find it fascinating that John McCain has a clear record of opposing these financial special interests (he learned his lesson the hard way with the Keating five scandal) and it is Barack, who is up to his eyeballs in these sleazy money, who for now is being given a pass.

One final point. Take a look at this piece of investigative journalism documenting chapter and verse about Obama’s ties with the slumlords of Chicago. The meltdown on Wall Street started with these slumlords. It is all part of the same activity–an insiders club that pays those who go along while inflicting pain on the poor. That was Barack’s game, not McCain’s.