The financial bailout... the cause of the problem?

09/25/2008 01:14:45 PM · #1

Great column that shows where the trouble actually began. People who could NOT afford homes given the opportunity. Increased demand caused the supply to become overvalued. As the loan situation started faltering a few years ago and prices got too high, demand started dwindling, thus values for the increased supply started coming down. As those who voluntarily chose to make bad loans (ARMs, etc.) started adjusting and refinancing, they found their houses would not appraise for even what they paid for it. This affected many areas of the country, though not all. Not everyone had a "bubble".

So they were left with a bad loan they couldn't afford because they couldn't get a better one because they were now upside down.

Meanwhile builders who kept building have left scads of unfinished subdivisions all over the country. And their construction loans are due too.

Originally posted by "Column":

This crisis was caused by political correctness being forced on the mortgage lending industry in the Clinton era.

Before the Democrats' affirmative action lending policies became an embarrassment, the Los Angeles Times reported that, starting in 1992, a majority-Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains."

Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton's secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.

Instead of looking at "outdated criteria," such as the mortgage applicant's credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness...

Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn't a joke -- it's a fact.

When Democrats controlled both the executive and legislative branches, political correctness was given a veto over sound business practices.

In 1999, liberals were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration's affirmative action lending policies as one of the "hidden success stories" of the Clinton administration, saying that "black and Latino homeownership has surged to the highest level ever recorded." (of course, home-keepership plummeted - HL)

Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn't get out of their loans by selling their houses.

A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Democrats set an affirmative action time-bomb and now it's gone off.

In Bush's first year in office, the White House chief economist, N. Gregory Mankiw, warned that the government's "implicit subsidy" of Fannie Mae and Freddie Mac, combined with loans to unqualified borrowers, was creating a huge risk for the entire financial system.

Rep. Barney Frank denounced Mankiw, saying he had no "concern about housing." How dare you oppose suicidal loans to people who can't repay them! The New York Times reported that Fannie Mae and Freddie Mac were "under heavy assault by the Republicans," but these entities still had "important political allies" in the Democrats.

Now, at a cost of hundreds of billions of dollars, middle-class taxpayers are going to be forced to bail out the Democrats' two most important constituent groups: rich Wall Street bankers and welfare recipients.

Message edited by author 2008-09-25 13:31:46.

09/25/2008 01:30:52 PM · #2

Hawkeye...you've got gonads the size of Texas!!!

An interesting read. I linked to an article on this subject recently and was accused of "spinning" it to look like affirmative action was the root cause of the problem.

09/25/2008 01:32:33 PM · #3

Originally posted by glad2badad:

When liberals don't like the truth, they attack the messenger :)

09/25/2008 01:34:21 PM · #4

Originally posted by HawkeyeLonewolf:

Originally posted by glad2badad:
Hawkeye...you've got gonads the size of Texas!!!

An interesting read. I linked to an article on this subject recently and was accused of "spinning" it to look like affirmative action was the root cause of the problem.

When liberals don't like the truth, they attack the messenger :)

That's why I mentioned the size of Texas...this site is loaded with liberals. Good luck!

Nikon AF-S NIKKOR 24-70mm f/2.8G ED

09/25/2008 01:38:13 PM · #5

I find it oddly hypocritical how Republicans, who supposedly support and promote de-regulation of industry and trade as a way to smaller government are now flip-flopping to seek oversight and increased regulation and are blaming democrats for doing exactly what they themselves promote.

I guess it's all in the spin.

citymars

Nikon D700

09/25/2008 01:38:45 PM · #6

Source of "column," please?

Nikon AF-S NIKKOR 24-70mm f/2.8G ED

09/25/2008 01:44:28 PM · #7

Originally posted by Spazmo99:

Where is that in this article?

No, it clearly points out how government REQUIREMENTS for political correctness by Democrats started the problem.

jrtodd

Nikon D850

09/25/2008 01:45:11 PM · #8

WHAT! We're in finical trouble in the good old US of A? Are you kidding me?
Didn't I hear bush on the TV just the other day saying the economy was in fine shape? Hell mccain said it as well didn't he?
Guess I need to stop believing everything I hear.

Message edited by author 2008-09-25 13:50:50.

DrAchoo

Panasonic Lumix DMC-LX5

Canon EF 24-105mm f/4.0L IS

09/25/2008 01:46:31 PM · #9

Is the assertion the root problem came from the Clinton administration the same as the people who assert the economic boom of his administration was really all because of Reagan and things were finally "trickling down"?

Personally I find it sorta ludicrous to somehow be able to claim all the good parts while rejecting all the bad parts. I'd laugh just as hard if it was the dems trying to do the same thing.

Maybe if someone tries hard enough, they can find the tendrils of a link back to Carter even. Or heck, let's go for the whole tamale and pin it on either Kennedy or FDR. Those democrat bastards have far too good a name among the public these days.

I'm a centrist who is currently push to the left because of Bush, but your post is utter and complete high spin crap.

Five_Seat

Canon EOS-6D

Canon EF 24-105mm f/4.0L IS

09/25/2008 01:46:40 PM · #10

At this point, it is not about the blame-game, its about thoroughly reviewing the options and coming to an informed conclusion that will result in a decision that minimizes the loss of American taxpayer money.

We must learn from countries that have experienced the problem before in the recent past, most notably Sweden (in the early '90s) and Japan. There is a decent article in the New York Times that discusses this issue:

//www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?em

This bailout shouldn't be about partisan politics, it should be about regaining the money hemorraging from the US economy.

09/25/2008 01:57:05 PM · #11

Originally posted by DrAchoo:

But oddly, chock full of pesky facts.

09/25/2008 02:00:59 PM · #12

Originally posted by HawkeyeLonewolf:

Originally posted by Spazmo99:
I find it oddly hypocritical how Republicans, who supposedly support and promote de-regulation of industry and trade as a way to smaller government are now flip-flopping to seek oversight and increased regulation and are blaming democrats for doing exactly what they themselves promote.

I guess it's all in the spin.

Where is that in this article?

No, it clearly points out how government REQUIREMENTS for political correctness by Democrats started the problem.

What article? Your OP? Even you say it's a column, which is, by it's definition, biased and full of opinion. Of course you don't say where it came from, did you write that youself or did it come from your latest issue of "The Weekly Fascist"?

09/25/2008 02:06:18 PM · #13

Originally posted by Spazmo99:

Originally posted by HawkeyeLonewolf:

Originally posted by Spazmo99:
I find it oddly hypocritical how Republicans, who supposedly support and promote de-regulation of industry and trade as a way to smaller government are now flip-flopping to seek oversight and increased regulation and are blaming democrats for doing exactly what they themselves promote.

I guess it's all in the spin.

Where is that in this article?

No, it clearly points out how government REQUIREMENTS for political correctness by Democrats started the problem.

What article? Your OP? Even you say it's a column, which is, by it's definition, biased and full of opinion. Of course you don't say where it came from, did you write that youself or did it come from your latest issue of "The Weekly Fascist"?

See, glad2badad... This is what they resort to in the face of truth.

Message edited by author 2008-09-25 14:06:39.

Canon EF 70-300mm f/4.5-5.6 DO IS USM

09/25/2008 02:07:46 PM · #14

Originally posted by HawkeyeLonewolf:

Originally posted by Spazmo99:

Originally posted by HawkeyeLonewolf:

Originally posted by Spazmo99:
I find it oddly hypocritical how Republicans, who supposedly support and promote de-regulation of industry and trade as a way to smaller government are now flip-flopping to seek oversight and increased regulation and are blaming democrats for doing exactly what they themselves promote.

I guess it's all in the spin.

Where is that in this article?

No, it clearly points out how government REQUIREMENTS for political correctness by Democrats started the problem.

What article? Your OP? Even you say it's a column, which is, by it's definition, biased and full of opinion. Of course you don't say where it came from, did you write that youself or did it come from your latest issue of "The Weekly Fascist"?

See, glad2badad... This is what they resort to in the face of truth.

I see nothing even resembling the truth in your posts.

cpanaioti

Canon EOS-40D

09/25/2008 02:08:32 PM · #15

Originally posted by HawkeyeLonewolf:

Afraid to provide the source, eh?

Eyesup

Nikon D300

Sigma 70-200 /2.8 APO EX DG Macro HSM II

09/25/2008 02:09:48 PM · #16

Originally posted by HawkeyeLonewolf:

But oddly, chock full of pesky facts.

The best lies are always wrapped up in tidbits of truth

one2one

Olympus E-5

Olympus 7-14mm f/4.0 Zuiko Digital Zoom

09/25/2008 02:10:26 PM · #17

As was asked earlier, source please?

Samsung Galaxy S21, S21+, S21 Ultra

09/25/2008 02:13:26 PM · #18

Originally posted by Spazmo99:

Originally posted by HawkeyeLonewolf:

Originally posted by Spazmo99:

Originally posted by HawkeyeLonewolf:

Originally posted by Spazmo99:
I find it oddly hypocritical how Republicans, who supposedly support and promote de-regulation of industry and trade as a way to smaller government are now flip-flopping to seek oversight and increased regulation and are blaming democrats for doing exactly what they themselves promote.

I guess it's all in the spin.

Where is that in this article?

No, it clearly points out how government REQUIREMENTS for political correctness by Democrats started the problem.

What article? Your OP? Even you say it's a column, which is, by it's definition, biased and full of opinion. Of course you don't say where it came from, did you write that youself or did it come from your latest issue of "The Weekly Fascist"?

See, glad2badad... This is what they resort to in the face of truth.

I see nothing even resembling the truth in your posts.

Where's the lie?

Message edited by author 2008-09-25 14:22:33.

bassbone

Nikon Df

Nikon MF 105mm f/2.5 AIS

09/25/2008 02:14:38 PM · #19

On a quick google, i found the source from the soothsayer of conversative 'truth' - Ann Coulter...

Bear_Music

Sony 24-70mm F4 Vario-Tessar T* FE OSS

09/25/2008 02:15:06 PM · #20

Here's the source column, folks:

Clintonomics etc...

R.

And yes, it's by Ann Coulter

For what it's worth, the NY Post is saying about the same thing:

NY Post article

Message edited by author 2008-09-25 14:17:22.

Canon EF 24-105mm f/4.0L IS

09/25/2008 02:16:12 PM · #21

Originally posted by HawkeyeLonewolf:

I do see the regular "quick trigger" lefts jumping in, that's for sure.

Although, you would help your point with a link to the source. :-)

ETA - Ahhh, there it (the source) is.

Message edited by author 2008-09-25 14:16:50.

Melethia

Canon EOS-80D

09/25/2008 02:16:22 PM · #22

Could any of this be caused in the slightest by greed, or is that too simplistic?

09/25/2008 02:20:07 PM · #23

Cross-thread post to the article I mentioned earlier...

Originally posted by glad2badad:

Originally posted by yanko:

Originally posted by cpanaioti:
... But, I guess if you don't want the government telling you how to run your business, this is what you end up with.

When you say business you mean personal business right? Because if you meant business as in the "corporate business" then yes I agree with you. Government should have told those lenders how to run their business since apparently they were completely clueless and irresponsible.

Government did have their hand in all of this...starting with trying to make loans available to minorities and low-income families, originally going back 30 years or so. It never did work all that well (for making money), then in 1995 (how did that slip past Clinton anyway?) it appears to have started a trend that would escalate.

Interesting read --> How the Subprime Mortgage Mess Began