October 12, 2008

The Finger

Walter Williams points the finger at who caused this mess..........The DEMOCRATS!

"In my more cynical moments, I think that we Americans deserve what we get from our politicians, many of whom can be generally described as nothing less than loathsome. You say, "Williams, that's a pretty heavy putdown." My question to you is how else would you describe these congressmen who are now blaming the financial mess on the failure of the free market? Starti ng with the Community Reinvestment Act of 1977, that was given more teeth during the Clinton administration, Congress started intimidating banks and other financial institutions into making loans, so-called subprime loans, to high-risk homebuyers and businesses. The carrot offered was that these high-risk loans would be purchased by the government-sponsored enterprises Fannie Mae and Freddie Mac. Anyone with an ounce of brains would have known that this was a prescription for disaster but there was a congressional chorus of denial."

"Five years ago, Congressman Barney Frank (D-Mass.) vouched for the "soundness" of Fannie Mae and Freddie Mac, and said, "I do not see any possibility of serious financial losses to the treasury." In 2004 congressional hearings, where the Bush administ ration sought greater oversight over Freddie Mac and Fannie Mae, congresswoman Maxine Waters (D-Calif.) said, "We do not have a crisis at Freddie Mac and particularly at Fannie Mae," adding that "the GSEs have exceeded their housing goals." Congressman Gregory Meeks (D-N.Y.) said, "There's nothing wrong with Fannie Mae and Freddie Mac." In these hearings Barney Frank said that he doesn't see "anything in the reports that raises safety and soundness problems." Earlier this year, Sen. Christopher Dodd (D-Conn.) praised Fannie Mae and Freddie Mac for "riding to the rescue" to help people get home mortgage loans, adding that they "need to do more" to help high-risk borrowers get better loans.

The financial collapse of Fannie Mae and Freddie Mac is not a failure of the free market be cause lending institutions in a free market would not have taken on the high-risk loans. They were forced to by the heavy hand of government. The solution is not a taxpayer-financed bailout. The solution is to let them fail and allow the people who invested in them, as well as the people who purchased homes they couldn't afford, suffer the losses. Of course that takes a level of political courage that is in short supply. There are other measures that should be taken as part of a second-best solution.

In 2002, when the Enron and WorldCom scandal broke, the Congress held hearings and some chief executives were jailed. Who did what was the big story in the major news media almost every night. Congress rushed to enact the Sarbanes-Oxley Act, also known as the Public Company Accounti ng Reform and Investor Protection Act of 2002. The act placed unnecessary, onerous and costly accounting standards on American businesses. The Enron and WorldCom debacle is a drop in the bucket compared to the financial mess that Congress has created through Fannie Mae and Freddie Mac, in the name of "affordable" housing. Have you heard Congress calling for hearings? They haven't called for hearings because many of them, both Democrats and Republicans, receiving hundreds of thousands of dollars, were in cahoots with Fannie Mae and Freddie Mac. If Americans are going to be on the hook to bail out these government-sponsored enterprises, at the minimum congressional hearings ought to be held to find out who did what and when.

Corporations employ accounting practices promulgated by the Financial Accounting Standards Board (FASB) that established Generally Accepted Accounting Principles (GAAP). Fannie Mae, Freddie Mac and government agencies have accounting practices that don't come close to, and never did, the honesty of private accounting practices. Accounting fraud and deception are the dominant features of government agencies. If a private business kept and cooked the books, like government agencies do, the top executives would go to jail. Shouldn't the accounting standards businesses have to meet be applied to Washington? My answer is yes and if a congressman says no, I'd like for him to tell us why."

Posted by BillyBudd at October 12, 2008 01:28 PM | TrackBack
Comments

Well said.

In my opinion, we should have taken up arms, or at least telephone receivers, and started objecting to our lawmakers long, long ago.

Instead, we "trusted" them not to hurt us too badly, which of course they did.

Now they have decided to hurt us more by "fixing" the problem with the help of our "contributions."

Woe be unto us when BO gets in (if we don't rally enough to prevent that occurance).

Posted by: Joe at October 12, 2008 02:09 PM

The fact is, there's plenty of blame to go around - on both sides of the isle, not to mention the home buyers themselves.

I'm more interested in who is better equipped to solve this problem. McCain wants to spend MORE of our money to buy up homes, while CONTINUING to provide tax breaks to the wealthiest people and business.

At least Obama is less interested in finger pointing and actually offering some viable choices in what can only be a lose-lose situation.

I just don't want to continue depositing my hard earned paychecks, not knowing if they're going to bounce, all because some SOB on Wall Street had a money addiction.

Posted by: Cary at October 12, 2008 07:57 PM

Ask Obama about his deep involvement with ACORN.
Loaning money to those who cannot pay it back because they DESERVE a house is why we are here today. All he offers is more feel good politics with magical mystery math.

Posted by: Billy Budd at October 12, 2008 08:11 PM

You gotta be kidding. Are you even paying attention or are you just memorizing sound bites?

http://www.nytimes.com/2008/10/11/us/politics/11acorn.html?em


Posted by: Cary at October 12, 2008 11:06 PM

http://fightthesmears.com/articles/20/acornrumor

Posted by: Cary at October 12, 2008 11:09 PM

You know, I've always been respectful and civil. But the Right, out of clear desperation, has offered absolutely nothing but blame casting, exaggerations, and outright lies this election cycle, and it's beyond disgusting. And I cannot believe that you, of all people, are playing right into it. It's infuriating, it really is. If you actually listen, you'd hear "that one" actually offering specific solutions to the problems we face as a nation. But the partisan walls just won't come down, will they? I just hope that when the American people elect "that one" as President, the Right give him the same respect that they've been preaching the office deserves for the past eight years.

Posted by: Cary at October 12, 2008 11:23 PM

Quoting the NY Times, wow that is a non-bias fishwrap. ACORN and other Democratic organizations are doing everything the can to cheat and steal this election. They will stop at nothing to get this fraud into office. Chicago has done it before with JFK, why stop now.

Posted by: Billy Budd at October 13, 2008 07:08 AM

Any man that does THIS does not deserve to be in office

Posted by: Billy Budd at October 13, 2008 07:25 AM

... um, yeah... that's become a common grooming habit for men of all preferences these days. But that is funny! Just as funny as your previous "cheat and steel the election" comment! Seems the right is stealing all the left's rhetoric, even the bad stuff! HAhahaha!

Posted by: Cary at October 13, 2008 07:44 AM

And YOU quote a noted Conservative economist, who is a frequent guest of Rush Limbaugh, and teaches at an Alma Mater of Karl Rove! Nice job of finding something unbiased, there. But hey, at least both of us know where we're getting our news - unlike you candidate's running mate!


Posted by: Cary at October 13, 2008 11:19 AM

Cary, sometimes I think you're a saint, sometimes a masochist. There is too much blame all over the place to point fingers at either party. Neither Frank nor Dodd foresaw the crisis, but neither did Phil Gramm when he was loosening all the banking regulations that had been enacted precisely to prevent this kind of meltdown. Facts tend to have a liberal bias, so I'm not going to bother arguing the role of ACORN or the Community Reinvestment Act. If Billy rejects the NYTimes out of hand, offering him facts is as useful as electing a hockey mom VP.

Posted by: barleymash at October 13, 2008 03:55 PM

I thought you two socialist did not want to play in my sandbox anymore......If Barak Hussein Obama is elected you will see a depression hit this country. He has no idea about the bullshit economic promises that he can't keep. It is all gibberish coming from a died in the wool commie. I own a small business and he has put a bullseye on my back to pay for all the lazy, ignorant, professionally poor you socialist have created. A trillion in new spending when our checkbook is empty. McCain sucks but at least he won't burn down America, or Amerika as Barry would call it.

Posted by: Billy Budd at October 13, 2008 04:15 PM

Yeah, I must be a masochist. But I just can't let the dishonest spin during such a momentously important election go unanswered. This isn't a game, people's lives are at stake. An honest comparison of the two candidate's economic plans, as well as several other issues, is all anyone needs to do to figure out who is gonna burn down America, as well as half the world (while the other half melts...) I just hope you're paying your employees with liquid funds.

Posted by: Cary Hussein Martin at October 13, 2008 05:27 PM

What no COMMENT on this?

Posted by: Billy Budd at October 13, 2008 05:47 PM

My friend, if I were to address every single issue you raise, I wouldn't have time to do much else. So, instead of clicking that, I'm gonna go try and improve my Chess game. I've said enough for one night.

Posted by: Cary at October 13, 2008 05:57 PM

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