Report Lays Financial Meltdown Firmly On Barney Frank (D-MA4) and Chris Dodd (D-CT Retired) – Takes Blame Away from Private Sector

A report in the Richmond Times Dispatchplaces the blame for the “financial meltdown” on the government sponsored institution backed by both Barney Frank and Chris Dodd, Fannie Mae. An excerpt follows:

With the publication of "Reckless Endangerment," a new book about the causes of the crisis, this story is beginning to unravel. The authors — Gretchen Morgenson, a business reporter and commentator for the New York Times, and Josh Rosner, a financial analyst — make clear that it was Fannie Mae and the government housing policies it supported, pursued and exploited that brought the financial system to a halt in 2008.
After James A. Johnson, a Democratic political operative and former aide to Walter Mondale, became chairman of Fannie Mae in 1991, they note, it became a political powerhouse, intimidating and suborning Congress and tying itself closely to the Clinton administration's support for the low-income lending program called "affordable housing."
This program required subprime and other risky lending, but it solidified Fannie's support among Democrats and some Republicans in Congress, and enabled the agency to resist privatization or significant regulation until 2008.
"Under Johnson," write Morgenson and Rosner, "Fannie Mae led the way in encouraging loose lending practices among banks whose loans the company bought. . . . Johnson led both the private and public sectors down a path that led directly to the financial crisis of 2008."
The authors are correct. Far from being a marginal player, Fannie Mae was the source of the decline in mortgage underwriting standards that eventually brought down the financial system. It led rather than followed Wall Street into risky lending.

What is surprising is that this school of thought, based on Barney Frank’s defense of plain, old fashioned, mismanagement of a government sponsored entity (Fannie and Freddie), coupled with restraints on private banks, literally forcing them to make risky loans to individuals, taking a place not over years, but decades, was allowed to go on for so long without either a banker, or Republican, or fellow Democrat screaming from the rooftops that the sky was falling. Therefore, laying the blame on incompetent Progressive ideologist, Barney Frank, is a bit of a stretch, as there were so many hands in the pie of stupidity that Frank, although central to the whole nightmare, was, in essence a bit player.

Dodd, the former Senator from Connecticut, retired just prior to the 2010 midterm elections, his role in the fiasco among other issues related to sweetheart deals and mortgages, would have placed him firmly in retirement either way, Frank ran again and was reelected by a less than stellar margin in the highly gerrymandered Democrat controlled 4th district of Massachusetts. The more that reads into the length and breadth of the debacle, the more one has to question why these bozo’s were allowed to continue unabated, a practice that would eventually crash the housing market and the economy? There were Republican’s that asked, and received answers from Frank and Company that all was well, nothing to see here, move along. Apparently, satisfied, they did just that. That is a failing of the inner DC beltway politics that is akin to someone setting fire to the capitol and having one ask the guy across the aisle if perhaps they should evacuate - upon learning no, they both stay to perish.

It is noteworthy that the Dispatch published the article in the first place, considering that most press is firmly in the Progressive mindset of spreading the wealth, even if it takes down (or perhaps especially if) the financial system. The idea that banks were forced to make loans that were clearly risky, and allowed to make loans which were, in a word, predatory, makes one wonder why those mortgage lenders weren’t more vocal about the destruction of their industry – housing bubble or no – aren’t bankers more likely to be conservative when it comes to saving for the long-haul (their institution, jobs and economy), rather than risking all for a quick buck, at the say so of one Barney Frank?
The whole debacle could have been easily avoided, had there been follow-through from all corners, and a review made that clearly showed incompetence, bad legislation and a ton of bad loans to consumers who could not pay – an immediate halt would have meant no need for bailouts (TARP), and no need for taxpayers to pick up the slack, for decades. It would not have changed the outcome of the election, however, it will impact the next election, as the hole that has been dug, and dug so deep, is now squarely in the hands of progressives, who clearly believe that higher taxes and continued spending will, somehow, right the ship – it did not work in the past, therefore, there is no reason why a failed economic policy would work in the future – as nothing in our nations makeup has changed.

With the Bush Tax Cuts expiring, and the Health Care Act taxes beginning to kick in, those taxpayers still standing, especially in states such as Massachusetts, New York, California, Illinois, will most likely see incises in state taxes as well, and this is across the board, from the very minimal earners to those considered “wealthy” by Obama standards (couple making $250,000 annually). This lack of relief to both the individual taxpayer as well as private sector business will show a drop in retail, as well as a drop in hiring and or continued layoffs through the next year. The end result, “The Buck Stops Here”, will place the blame on one man and one man alone, the President.

Therefore, when one is considering just how bad Barney Frank’s management might be, one must also considering thanking him for eventually ridding the government of certain like-minded Progressives, come 2012. Barney Frank, will, of course, be up for reelection in 2012, along with cohort, Nancy Pelosi, the former Speaker of the House. It is simply the fact that Progressives truly believe that the masses (otherwise known as “we the people”) are too ignorant or busy working three jobs, if one can find a job at all, to pay attention to all of their accomplishments. Therefore, as the general election begins to take shape, and the field narrows in the spring of 2012, to challengers for the White House, Senate Seats and all Congressional Seats (they are all up for reelection), one has to suspect that there just may be changes in the beltway a la 2010.

Obama ends year with growing disapproval - Parker Griffith (D-AL) first to switch to GOP – Health Care Drives Debate

According to Rasmussen ReportsDaily Presidential Tracking Poll, Obama’s approval rating has hit another low; with only 25% of respondents approving of the president’s job performance. Key among issues is the Health Care Reform Bill currently before the Senate; with a majority (55%) of American’s hardly enamored of the legislation.

One of those, Rep. Parker Griffith, a Democrat Congressman from Alabama announced today that he would be switching to the GOP Politico broke the story earlier today:

A radiation oncologist who founded a cancer treatment center, Griffith plans to blast the Democratic health care bill as a prime reason for his decision to switch parties—and is expected to cite his medical background as his authority on the subject.

Griffith is one of many “Blue Dog” (fiscally conservative, pro-life) democrats who were recruited by Rham Emanuel in 2008 in order for the DNC to gain a majority in the house. Over the summer recess, many of these conservative Democrats heard from constituents who were not at all pleased with the plan to “reform” the nation’s health care system, reduce Medicare, increase Medicaid, and add trillions to an already bloated deficit.

The Alabama GOP issued a press release noting the “pleasant surprise”. Griffith’s district had traditionally been held by a Democrat, but has trended Republican in the past few years. Should Obama with Reid and Pelosi continue to pursue a course of action that is clearly not palatable to the majority of American’s, those Senators and Congressmen who, like Nelson (NE) and Dodd (CT) signed on over the past weekend, will most likely be forced into early retirement. The question remains how many Democrats who are facing stiff GOP opposition in their states and districts will choose early retirement, and or a change in Party.

Polls Suggest Continual Decline in Approval for Obama - How this Impacts the 2010 General Election

Barack Obama with Reid, Frank and Dodd - image Zimbio, Alex Wong/Getty Images North America

Poll data released yesterday by Rasmussen, shows a continual decline in the Presidents’ “Strongly Approves” – he is now at 28% - (voters who strongly approve) – down from a high of 45% on January 21, 2009. The strongly disapproves has risen from a low of 14% on the 22nd of January to 35 and 37% in the past week. There is no indicator of the somewhat approves and disapproves ( total percentage) that is factored into the final results – however, once the number of strongly approves falls below 35% (estimated number of enrolled Democrats nationwide), it is evident that Obama has lost some of his base, and it goes without saying that he has almost no support from conservatives (Republican’s, Libertarians) and may have already lost the all –important “unaffiliated” vote.

Of more import to trends, the Presidents falling approval is impacting the 2010 election - In a generic congressional poll released on 7-July, 41% of those polled would support a Republican, compared to 38% who would support the Democrat running in any particular district. What this tells us, historically, is that Barack Obama is to incumbent Democrat Congressional Leaders, what George W. Bush was to his party members in the 2006 general election – resulting in a sweep of the congress and senate. It is not necessarily true that the burden alone falls to the man at the top of the Party (note: citing presidents are the head of their party, essentially above the party chair - see Republican Chair Michael Steele, who was elected to the position vacated, in essence by President George Bush. ) it is the fact that the entire “brand” becomes tarnished over time, be it through a hostile media (as in the case of George Bush), or through programs and policies that run contrary to the majority of the populace (which is moderate – trending conservative but not extreme to either party ideology).

Therefore, regardless of the pollster, there will be seats that are now considered “safe” that may end up being held by a different party. Some of the more interesting races in the nation (those drawing interest from outside their own states – are the architects of the financial crisis, Barney Frank, Congressional Representative, 4th District Massachustts, and Chris Dodd, Senator, Connecticut. Harry Reid has also seen a decline in the polls in his state, and is considered vulnerable – the reason being, these three in particular have received an unusual amount of “negative” press in general – with the exception of Frank who seems to sit on the board of all news organizations in the 4th district. (Note: it is not unusual for a congressional representative or Senator to meet with an editorial board and give them their “talking points”.) Although for the most part, these seats are considered safe due to the ability of the incumbent to amass a large “war chest” in comparison to the challenger, one must understand that as this is a national race, funds to challengers are on the rise, and early in the game. As an example: in Frank’s case, the challenger, Earl Sholley is receiving help from people outside the state who view Frank most unfavorably. Sholley has been on the campaign trail early, being invited to take part in events both inside and outside the Bay State – the fact that these invitations are early and this campaign has gotten off the ground this soon in the general scheme of things, is telling. (Although, one should wait for defined polls of the 4th Massachusetts district, which will not be available until 2010, (Polls released earlier will automatically show incumbents as “Safe Democrat” - based on Massachusetts historical voting trends.) to understand the nature of branding a candidacy. It is safe to say, at this point, the likelihood of that scenario being played out across the nation is more probable than not. 2010 will also be the point in time when some indications of which candidates will be interested in seeking the job in the White House will begin to take shape. Those names that are bandied about this early in the game, historically, do not either appear on the stage in 2011.

As far as Obama’s poll numbers are concerned, he is almost in line with former President Jimmy Carter, whose approval ratings showed a steep decline after 18 months in office – primarily driven by the economy and bailout of auto makers and yes, a stimulus program which resulted in rather large deficits. Therefore it is no wonder that the phrase “Republicans smell blood” is fitting, in an historical context.

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.