Voters worried about losing their homes or their retirement funds have a clear choice in November. One candidate helped create the crisis. The other worked to eliminate it. Three names are key: Bill Clinton, Barack Obama and ACORN , a radical-left organization powered by “community organizers.” Where have we heard that term before?
ACORN and its “community organizers,” with help from congressional enablers like Barack Obama and Barney Frank, fanned the Fannie Mae flames in big American cities like Chicago, New York, Los Angeles and Detroit by threatening America’s banks with market mayhem — made possible by Clinton’s beefed up CRA — if they did not make more loans to people who the banks knew were unprepared to repay them.
These fraudulent loans — I say “fraudulent” because the banks and the politicians knew in advance that many of them would not, could not be repaid and, therefore, they were not “loans” even in a technical sense* — were then packaged into equally fraudulent “securities” which were then sold to gullible investors. Eventually, the house of cards collapsed in on itself.
Clinton’s and ACORN’s role in the proliferation of subprime mortgages and the junk “securities” that Fannie Mae created to sell them on Wall Street is thoroughly documented. The documentation is so abundant partly because, like the Germany’s WWII-era Nazis, these wrongdoers proudly advertised their actions to win votes from the short-term beneficiaries of their economic and political misconduct.
I’ve provided some of the documentation (or links to it) on this blog. Other blogs — including here and here — provide additional material. Barack Obama’s involvement with ACORN as a Chicago “community organizer” is also well-documented. ACORN, by the way, has enthusiastically endorsed Barack Obama for President and Obama has just as enthusiastically accepted ACORN’s endorsement.
The economic harm caused by the Clinton CRA is now painfully obvious. But the risks of that harm have were known to Clinton insiders from the beginning, as evidenced by this 1993 Clinton Whitehouse press conference transcript. (ht: Anthony). Since the, the risks have been repeatedly highlighted from time to time for political leaders to consider and act on. Here’s an example from the Winter 2000 City Journal:
The Clinton administration has turned the Community Reinvestment Act, a once-obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American cities—and, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation’s banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups [like ACORN], intent, in some cases [including ACORN], on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being.
The CRA’s premise sounds unassailable: helping the poor buy and keep homes will stabilize and rebuild city neighborhoods. As enforced today, though, the law portends just the opposite . . .
Finally, in 2005, with real crisis looming, John McCain and a few other U.S. senators tried to stem the tide with S.190. Unfortunately, the bill died in committee. Against this backdrop, consider the very well done video below. If you feel as strongly about this as I do, please pass the link to your friends.
Given Obama’s track record with ACORN, electing him president this fall would likely result in greater crises down the road. It’s the vision thing. Obama either doesn’t have it or, if he does, what he sees is bad for America.
* The IRS, for example, treats as “bona fide debt” only those loans that the lender actually believes will one day be repaid.
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S.190 tells the tale. McCain was one of three sponsors of that bill in 2005, and Obama helped to deep-six it. The enormous contrast in the sums donated to Obama vs. McCain by these corrupt organizations is also informative.
The video plays too fast, but the ideas come through well enough. It is well worth the time to view it.
See what the left wing NY times reported back in 1999
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&&scp=1&sq
Quotes from NRO Online: “ACORN, as National Review readers will know, is a “community-organizing” outfit with which Senator Obama was once closely allied, and for which he did work. ACORN has made a cottage industry out of leaning on banks and government to extend credit to house buyers who were bad risks for mortgages, i.e. subprime borrowers.”
(Correction: BHO is STILL closely allied with ACORN. The national organization endorsed him in this election and he proudly accepts that endorsement.)
Americans for Limited Government President Bill Wilson wrote Congressional leaders, “Thanks to the federal government artificially setting low interest rates and using the so-called Government Sponsored Enterprises Fannie Mae and Freddie Mac as a housing welfare program, the bad loans made now threaten the greater economy. … If Congress should address anything, it should be to put an end, once and for all, to the **ACORN-inspired housing welfare program** that has pulled the nation’s economy into the most turbulent waters it has seen since the Great Depression.”
This is the Obama social program — one of many ways we can anticipate our earned incomes being “redistributed.” Redistribution is now a fact, not a policy; large and small shareholders of the banks bullied into these loans are now toast. Thousands of bank employees are among the victims.
Kurt, these guys share your view that most of the blame for the market meltdown can be placed on poor black men in string vests in Alabama or Georgia. I’m growing suspicious that you are getting some, if not most, of your material from them. http://www.brasschecktv.com/page/187.html
Kurt, the cause of this meltdown is deregulation, specifically, Gramm–Leach–Bliley, December 1999, that took out the firewalls between the banking, investment, and insurance industries that had been in place since Franklin Roosevelt and a Democratic congress had put them there when they took over the flacid government and crumbled country left by three Republican presidents in a row enabled by a Republican congress. Not my opinion, Kurt: history. It took three Republican presidents about nine years last time to screw up the world; George W. Bush did it in only seven and a half.
And just for the record: Phil Gramm did even more damage in December 2000 when he spear-headed the credit swaps legislation that turned insurance into a casino.
It wasn’t the public taking out bad mortgages that led to this. It wasn’t greed in the banking industry–greed has been with us since day 1. It was the fail-safes taken out that had been in place for sixty-plus years that kept troubled sectors from dominoing into other sectors and causing what an unfortunate congress is reluctantly trying to prevent.
And if I may ask? Who are you?
Rick –
“Unfortunate congress”? Hah. “Foolish, self-absorbed, duplicitous and corrupt” is a more accurate description. We’re talking here about a Senate Majority Leader — Harry “Wormtongue” Reid — who was so busy pursuing polygamists back in July that he couldn’t allocate Senate hearing time to deal with the impending financial trainwreck. Reid is a fool. And so are the people who put him where he is today.
They were repeatedly repeatedly warned by George Bush and others that the two FMs were headed for disaster, yet they deliberately refused to — your term — “regulate” them.
Your assertion that “taking out bad mortgages” didn’t lead to “this” is refuted by mountains of evidence on this blog and elsewhere. We agree, however, that greed has been with us since Day 1. It afflicts poor and rich equally.
The subprime mortgages were the first domino to fall. Once they fell, they knocked over others thanks, in large part, to refusal by Barney Frank and Christopher Dodd, et al to listen to the regulators who issued clear warnings early on, including in the 2003 hearings replayed here.
Gramm-Leach-Bliley had no direct impact on Fannie Mae or Freddy Mac. These financial monsters (GSEs) were big enough to create serious economic distress even if GLB had never happened.
Not sure how who I am is relevant to the discussion, but flattered that you’d ask. You can read a short bio at http://iperceive.net/bio/.
Who are you?
I just got your Burning Down The House youtube video yesterday, it was passed on by a friend and am sorry to say that it has been deleted…I, too, passed it on and am sorry that so many will not be able to view it…the facts are facts and I appreciate you bringing them to the forefront…at least a handful of us got to see it.
What was the “Burning Down The House” video? I missed that.
I missed it, too. Maybe Brenda has got this blog confused with another.
“Watch out! You might get what you’re after…” It appears that it was pulled because of copyright laws. The copyright for the song is owned by Warner Brothers.
This one is good: http://www.youtube.com/watch?v=TxgSubmiGt8
And, it happens to include a sampling from “Burning Down the House”, among a number of other fitting songs from the 80’s.
Calling ACORN a “radical” organization is like calling MoveOn.org a “radical” organization – a smear tactic; they are just liberal like about half of the American population. ACORN was founded with what were originally laudable goals: helping the housing situation for the poor. They were instrumental in helping to end redlining, which is a patently unfair and racist practice. It is socially right to give some breaks to the economically disadvantaged, but it makes no sense at all to give a loan to ANYBODY who can’t pay it back. Blaming this on minorities or Clinton is completely missing the point of what happened (it wasn’t just the poor – look at Ed McMahon). The banking industry, freed from regulation by the Republican administrations of Bush senior and junior and their big-business cronies, went for profit over good sense, and invented ever-more elaborate schemes of shorting debt, in essence selling it as an asset when it was in fact of unknown value. You can blame Phil Gramm and his buddies (including his protege John McCain) for that. The free market is all well and good, but if it is not strictly regulated by the government, greed will run rampant and we end up where we are now, which is up a dry creek with no oars. Clinton is not to blame for this mess and ACORN is not evil. Let’s remember that the Clinton administration managed to end up with surpluses, which the current administration has completely squandered on a war based on lies undertaken for the sole purpose of lining his friends’ pocketbooks. Don’t be deceived by shills like Howard Husock: he believes in a completely unregulated free market system, which is the surest way to disaster. I only hope he had a lot of money in the stock market, because he sure deserves what he’s got coming.
The Nazi and Communist parties were founded on “laudable goals”. That’s their big weakness — they focus on the goals and ignore the process. Means-end. And, no, ACORN is not just like any other “liberal” organization. Real liberals don’t go to city council meetings and intimidate and shout down opposition. ACORN is marxist.
And if you think Bill Clinton isn’t to blame for the subprime mess, you’ve had your head in sand for the past two weeks if not two decades. Get educated, Dude!
Hey, Kurt:
I was under the impression that this was thoughtful dialogue from opposing points of view.
You know Accounting, don’t you? Suppose I (erroneously) grant you that Clinton is to blame for the mortgage mess. What then? It looks to me like Enron all over again, letting the financial geniuses in suits play with other people’s money and hence, homes. And regulating financial instruments wouldn’t have helped at all?
I also see you have nothing to say about Phil Gramm. Not only did he push for deregulation in financial services, he also worked against Congressional efforts toward ending predatory lending practices for sub-prime loans. This is McCain’s chief economic advisor. If he’s so smart, why didn’t he see a melt-down coming, when so many others did? In this regard, one can argue it was Gramm and his cronies that caused the sub-prime mess AND the crisis on Wall Street.
I am educated, “Dude.”
Michelle –
Happy to have your point of view, but if you want readers to buy in, you may want to offer specific evidence to support it.
To which Gramm-supported “deregulation of financial services” do you refer? And what do you mean by Gramm worked against “ending predatory lending practices”? No spin. No glittering generalities. Give us specifics and the sources.
I haven’t said, by the way, that Clinton alone is responsible for the subprime mess. He and his administration were major contributors to it. I have also tagged George Bush as a contributor to the mess.
Who exactly are Gramm’s “cronies”? Looking forward to your response.
It’s been nearly two weeks since Kurt asked Michelle to offer something to support her argument. Is it just me, or has she not come up with anything yet? How ’bout you George? Nope? Nothing? Hmmm.