I thought this was interesting
Here is an article by Michael Reagan worth reading, Yes, he's a
conservative Republican. but he does lay out the root causes of the
financial woes we now find ourselves facing in an understandable way.
By Michael Reagan
. . . you need to go back to the Clinton administration, which decided
that everybody and his kid brother was entitled to a mortgage even when
they didn't begin to qualify for a home loan.
"In saner days, banks designated certain areas as no-loan zones
-- depressed neighborhoods where lending money to potential home buyers
was not just a risky investment, but a certain future foreclosure.
Critics of the practice called it "redlining", and President Clinton
and his chums on Capitol Hill decided that banks should no longer act
like banks and lend money only to home buyers who could afford to
handle the monthly payments. Now all bets would be off and people not
the least bit creditworthy -- and speculators -- would be entitled by
law to obtain mortgages even when it was obvious they couldn't afford to
Enter those now infamous quasi-government banking instruments known
as Fannie Mae and Freddie Mac, which poured fresh money into the
banking system by buying mortgages from banks. Over the long haul they
managed to load up their portfolios with billions upon billions of
dollars of risky mortgage paper that banks had been forced to offer and
then dumped on them.
The scandal of Fannie Mae and Freddie Mac dwarfs the Enron debacle. In
Enron, people went to jail. With the Fannies, some just walked away with
millions. The collapse of Lehman Brothers can be blamed on Fannie Mae
and Freddie Mac, the two big mortgage banks that the Feds recently
bailed out with
big bucks. As Fox News has pointed out, they used huge lobbying
budgets and political contributions to keep regulators off their
backs. According to the Center for Responsive Politics, the top three U.S.
Senators getting big Fannie and Freddie political bucks were Democrats,
and No. 2 was Sen. Barack Obama who, as Fox noted, had only been in the
Senate four years but still managed to grab that No. 2 spot ahead of
longtime colleagues John Kerry and Chris Dodd, the chairman of the
Senate Banking Committee.
According to Fox, Fannie and Freddie were where big-time Washington
Democrats went to work and pocketed millions. Franklin Raines, Clinton's
White House Budget Director, ran Fannie and collected $50 million. Jamie
Gorelick, an official in Clinton's Justice Department -- the woman who
built the "wall" that prevented the FBI from targeting
terrorists before 9/11 -- worked for Fannie Mae and took home $26
million. Big-time Democrat Jim Johnson, who headed Obama's VP search
committee, also hauled in millions from running Fannie Mae.
Obama brazenly blames John McCain and the GOP for the current Wall
Street mess when it's clear none of it was due to Republican policies.
The truth of the matter is that it was McCain and three GOP colleagues
who sought to reform the government's lending policies three long years
ago after the Bush administration had failed two years earlier. On May
25, 2006, McCain spoke on behalf of the Federal Housing Enterprise
Regulatory Reform Act of 2005 and warned against the debacle we are now
facing if it failed to pass.
He told the Senate that a report by the Office of Federal Housing
Enterprise Oversight charged that "Fannie Mae employees deliberately and
intentionally manipulated financial reports to hit earnings targets in
order to trigger bonuses for senior executives. McCain warned, "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."
McCain predicted the entire collapse we now are suffering through.
He stressed the falsification of financial records to benefit
executives, including Obama advisers Franklin Raines and Jim Johnson.
Now Obama has the nerve to try to pin the blame on McCain and the
GOP when the facts show that the blame must be pinned on the Democratic