Monday, December 22, 2008

Incredible - The New York Times Blames Bush Philosophy for Mortgage Crisis

In a six page article under the Times Business Section,
(web published Dec. 20th), the Times outlines how President Bush might be to blame for the Mortgage Crisis, citing his philosophy of increased home ownership as the main cause, coupled with a desire to de-regulate. They do talk about his concern over Freddie Mac and Fannie Mae, but fail to mention the root cause of that failure, Barney Frank and Chris Dodd, both Democrats, who continued to confirm the solvency of the Government Run mortgage giant.

Several points made in the article are incredulous:

“He pushed hard to expand homeownership, especially among minorities, an initiative that dovetailed with his ambition to expand the Republican tent — and with the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.”

The Times has apparently forgotten that those lax lending standards were in place before President Bush took office, instituted under President Carter, The Community Reinvestment Act. This bit of legislation put lenders under fire for failing to grant loans to individuals due to lack of credit - banks and mortgage companies had no recourse but to loan to those without a solid credit history. This “philosophy” was further pushed by ACORN, a non-profit that is not known to be in the back pocket of your average Republican.

When President Bush called for more home-ownership, some lenders responded by introducing the variable rate mortgage to those who had zero credit or the ability to pay that mortgage once the interest rate ballooned. In other words, although the lending practices might be considered a bit shady, the individuals signing the mortgage might have understood that at some point, they would not be able to afford their home. Somehow, this becomes President Bush’s fault:

It was June 17, 2002, a day Mr. West recalls as “the highlight of my life.” Mr. Bush, in Atlanta to unveil a plan to increase the number of minority homeowners by 5.5 million, was touring Park Place South, a development of starter homes in a neighborhood once marked by blight and crime.
Mr. West had patrolled there as a police officer, and now he was the proud owner of a $130,000 town house, bought with an adjustable-rate mortgage and a $20,000 government loan as his down payment — just the sort of creative public-private financing Mr. Bush was promoting.
“Part of economic security,” Mr. Bush declared that day, “is owning your own home.”
A lot has changed since then. Mr. West, beset by personal problems, left Atlanta. Unable to sell his home for what he owed, he said, he gave it back to the bank last year. Like other communities across America, Park Place South has been hit with a foreclosure crisis affecting at least 10 percent of its 232 homes, according to Masharn Wilson, a developer who led Mr. Bush’s tour.

Somehow, Bush is to blame for Mr. West's dilemma.

Other notes of interest in this particular article:

Further, Bush requested that Congress help first time home owners with closing costs, which he saw as a barrier to some - Congress complied. No kidding.

A host of Bush advisers have come “out of the closet”, citing instances where Bush may have been responsible, and the President, of course, declined an interview with the Times.

A favorite revelation in this astonishing article comes on page three of six:

And he pushed to allow first-time buyers to qualify for federally insured mortgages with no money down. Republican Congressional leaders and some housing advocates balked, arguing that homeowners with no stake in their investments would be more prone to walk away, as Mr. West did. Many economic experts, including some in the White House, now share that view.

Republican Congressional Leaders, and conservatives, had often called into question the President acting a tad more liberal than conservative. This truism seems to have escaped the Times, who has painted the President as a strict conservative at all times, someone whose policies and actions are so far-right they must be feared. Suddenly, they find that he might be a bit more moderate.

The rest of the piece is devoted to drawing a conclusion by way of the donations made to the Republican Party; donors which are tied to the Banking and Mortgage industry. One would be hard pressed to find an article during the 2008 presidential campaign, that did not find the Times or other like-minded editorial newspapers, blasting the McCain campaign for bringing up names like Ayers, or Wright, or, for that matter, the fact that the Obama campaign gave a hefty sum to a group mentioned in this article, ACORN, in an effort to “get out the vote”.

Now that the election is over, the Times has taken it upon themselves to make sure that the financial crisis America faces falls on the shoulders of one administration, and that no blame be placed elsewhere. The fact remains, that both parties are to blame for the present situation, and that the President, for all the power that the press believes that office has, must first go through the Congress - that the President, although the “leader of the Country, is merely, the “Titular Head of his/or her (ever hopeful), respective Political Party.


Chuck said...

Good read. I read this on Drudge. Here is their qualifier. (emphasis mine)

But the story of how we got here is partly one of Bush's own making

This way they are factually correct, the meltdown is partly Bush's fault. It may not be the largest part but it is still a part.

The part I loved is how they blamed the bad loans on him for pushing home ownership completely ignoring Clinton's vast involvement in the problem.

This is typical nonsense from the NYT. This is just another example of why their numbers and income are plummeting. I think it is in it's death throes. I truly believe we will see the NYT fold, excuse the pun, within not too many years.

Jimmy Lewis said...

It's been eight years of Bush bashing, which I'm sure will be followed by, four (I pray not eight) years of stroking Obama.

The NYT has been going steadily down hill since the turn of the century ... I expect they soon will follow the lead of the Detroit papers and sell their trash on line.

It'll be good riddance to bad rubbish!!!

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