Bloomberg: Dems Behind Housing Scam
It's fashionable among Democrats to blame the "big banks" for the housing crisis and the resulting Great Recession. Dig deeper and you find that the real causes of the crisis were big government policies.
Old news, except it isn’t. Last week, in regard to the devastating housing fraud that helped collapse the U.S. economy, a Reuter’s headline read: “U.S. Sues Bank of America for Alleged Mortgage Fraud.” According to Reuters, Barack Obama’s Justice Department “filed a civil mortgage fraud lawsuit against Bank of America, accusing it of selling thousands of toxic home loans to Fannie Mae and Freddie Mac that went into default and caused more than $1 billion of losses.”
That’s right, the banks did it. In reality, it is another glaring example of Barack Obama and the Progressive Democrats’ adeptness at avoiding culpability and deflecting blame. After all, to this date, they have fooled so many about their role in perpetuating the housing collapse that thrust the economy into a nose dive. They are counting on voters lacking enough information to connect-the-dots as they point accusingly at their partners in crime. Most Americans have been told by Obama’s lap-dog media that it was all the fault of greedy bankers, mortgage brokers and Wall Street derivatives — some of which came into play once the set-up, the opportunity for greed baited the bad players into joint accountability.
The question the American people should ask is: Who were the masters of the economic collapse, the architects whose scheme worked so well that they virtually escaped the blame? Historically, it will go down as one of the liberal Democrats’ all-time big lies to the American people. Democrats led by Barney Frank (D-MA), Chris Dodd (D-CT), Maxine Waters (D-CA) and Greg Meeks, (D-NY) are on video, in effect, in support of glutting the housing market with unsustainable mortgages in the form of bad loans. In Capital, Azi Parbarah reported in 2011 that New York Mayor Michael Bloomberg pointed the finger squarely at the Democrat-controlled Congress as instigating America’s financial collapse:
“If there is anyone to blame for the mortgage crisis that led to the collapse of the financial industry, it’s not the 'big banks,' but Congress. [They] were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it's easy to blame them and Congress certainly isn't going to blame themselves.” Bloomberg added, “It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.”
What Bloomberg failed to mention is that Obama, himself, adamantly demanded that banks make more loans to low-income borrowers. Sub-prime loans became the great American rip-off. Obama and the Democrats strong-armed lenders to give loans to people who could not repay them. The plan? In exchange, grateful and undoubtedly stunned new homeowners would obligingly ply the Democrats with their votes.
The ugly and inevitable consequences forced the poor, mostly Hispanics and Blacks, out of their unaffordable homes through wide-scale foreclosures. Home prices fell, construction workers lost jobs, the housing industry began a free-fall and America’s AAA credit rating was downgraded for the first time since 1917. The result: The worst economy in recent memory. Today, America bears the brunt of the Democrats’ manipulation of the housing market resulting in lost homes and lost jobs. Hawking for votes, Obama and the Democrats put politics over people.
Many harken back to former Democrat President Jimmy Carter igniting the long fuse that led to the recent crisis through his Community Reinvestment Act in the late 1970s. Others recount that it was in 1998 that former Democrat President Bill Clinton removed the barriers between commercial banks and investment banks when he repealed the Glass-Steagall Act. Big banks suddenly had federally insured money to play with. Greed from Congress to Wall Street spread unabated.
As The Guardian reported, economist Robert Kuttner testified before Congress:
“Since repeal of Glass-Steagall in 1999, after more than a decade of de facto inroads, super-banks have been able to re-enact the same kinds of structural conflicts of interest that were endemic in the 1920s – lending to speculators, packaging and securitizing credits and then selling them off, wholesale or retail, and extracting fees at every step along the way. And, much of this paper is even more opaque to bank examiners than its counterparts were in the 1920s. Much of it isn’t paper at all, and the whole process is supercharged by computers and automated formulas.”
Orchestrators used greed as the long-proven catalyst as the housing market fell victim. The lure of big money, ill-gotten, crossed political and commercial lines and made bedfellows out of adversaries as deals were made and commissions increased. Harold Raines, a Democrat rising star and Fannie Mae’s CEO in the mid-1990s, told the Washington Post that Fannie Mae is “the equivalent of a Federal Reserve system for housing." Democrats were entrenched as Fannie Mae and Freddie Mac’s top management. According to Bethany McLean of CMMMoney, “The same article noted that Fannie's financial moves generated more than $100 million a year in fees for Wall Street firms …guaranteed a stunning $1 trillion of mortgages and held $376 billion of mortgages and mortgage-backed securities on its own books.” A Security and Exchange Commission investigation uncovered accounting irregularities, forcing Raines into early retirement. The Democrat reportedly took a $240 million golden parachute of taxpayers’ money with him.
Controlling the nation’s purse strings in Congress from 2008 to 2010 and denying any legislative remedy in the Democrat-controlled Senate from 2008 until today, the Democrats steered the economy toward the fiscal cliff. With the DEMS behind the wheel, some Republicans jumped on for the ride amid the financial melee. Members of both parties were voted out in 2010 by an angry constituency.
Obama and the Democrats first strong-armed banks and lenders into irresponsible behavior, then looked the other way and feigned innocence during the collapse that soon followed. In the 2010 elections the Democrats lost control of the House. Yet, Democrats retain control of the Senate where they remain incalcitrant by refusing to even allow a vote on a national budget that could move the nation toward economic recovery. Obama, meanwhile, is actively emptying the U.S. treasury by tossing American’s tax dollars at everything from speculating on doomed-to-fail green projects to refurbishing mosques in the Middle East. To avoid total economic collapse, the American voters may decide not to reward the Democrats and Barack Obama’s bad behavior in the November 2012 elections.
Sharon Sebastian's insights on YouTube: http://www.youtube.com/watch?v=IdZHzMG66Kg
Image Credit: CC BY-NC 2.0 (Flikr)/Brennan Cavanaugh