House GOP Pulls a Michael Corleone

I am a Republican and these guys are embarrassing me

What are these 30 something GOPers doing. I am 43 and have been a Rep my whole life. I have never seen my party screw something up so bad. This is middle class relief. We can't get loans, buy houses, cars, our 401K's are getting killed and you have this Cantor dude running around like Alan Greenspan. He is the smartest guy in the room. Scary. If they screw this up and don't get this thing passed I will vote straight Democrat out of protest. Throw these bums out and lets start over. Pandering for the cameras is a joke when we are looking at Great Depression. There has been enough carnage on Wall Street. Bodies are everywhere. Enough is enough

Chris of NC @ Sep 26, 2008 23:00:54 PM

The propaganda arm of the Democrats

Everything I know about the Republicans' actions I heard from Democrats through their wholly owned subsidiaries in the media. There is a fine line (Ha!) between bias and outright propaganda.

Max of WI @ Sep 26, 2008 21:36:20 PM

bill clinton

How A Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable

Terry Jones

Wed Sep 24, 7:19 PM ET

One of the most frequently asked questions about the subprime market meltdown and housing crisis is: How did the government get so deeply involved in the housing market?

The answer is: President Clinton wanted it that way.

Fannie Mae and Freddie Mac, even into the early 1990s, weren't the juggernauts they'd later be.

While President Carter in 1977 signed the Community Reinvestment Act, which pushed Fannie and Freddie to aggressively lend to minority communities, it was Clinton who supercharged the process. After entering office in 1993, he extensively rewrote Fannie's and Freddie's rules.

In so doing, he turned the two quasi-private, mortgage-funding firms into a semi-nationalized monopoly that dispensed cash to markets, made loans to large Democratic voting blocs and handed favors, jobs and money to political allies. This potent mix led inevitably to corruption and the Fannie-Freddie collapse.

Despite warnings of trouble at Fannie and Freddie, in 1994 Clinton unveiled his National Homeownership Strategy, which broadened the CRA in ways Congress never intended.

Addressing the National Association of Realtors that year, Clinton bluntly told the group that "more Americans should own their own homes." He meant it.

Clinton saw homeownership as a way to open the door for blacks and other minorities to enter the middle class.

Though well-intended, the problem was that Congress was about to change hands, from the Democrats to the Republicans. Rather than submit legislation that the GOP-led Congress was almost sure to reject, Clinton ordered Robert Rubin's Treasury Department to rewrite the rules in 1995.

The rewrite, as City Journal noted back in 2000, "made getting a satisfactory CRA rating harder." Banks were given strict new numerical quotas and measures for the level of "diversity" in their loan portfolios. Getting a good CRA rating was key for a bank that wanted to expand or merge with another.

Loans started being made on the basis of race, and often little else.

"Bank examiners would use federal home-loan data, broken down by neighborhood, income group and race, to rate banks on performance," wrote Howard Husock, a scholar at the Manhattan Institute.

But those rules weren't enough.

Clinton got the Department of Housing and Urban Development to double-team the issue. That would later prove disastrous.

Clinton's HUD secretary, Andrew Cuomo, "made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis," the liberal Village Voice noted. Among those decisions were changes that let Fannie and Freddie get into subprime loan markets in a big way.

Other rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks.

Since they could borrow at lower rates than banks due to implicit government guarantees for their debt, the government-sponsored enterprises boomed.

With incentives in place, banks poured billions of dollars of loans into poor communities, often "no doc" and "no income" loans that required no money down and no verification of income.

By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market -- a staggering exposure.

Worse still was the cronyism.

Fannie and Freddie became home to out-of-work politicians, mostly Clinton Democrats. An informal survey of their top officials shows a roughly 2-to-1 dominance of Democrats over Republicans.

Then there were the campaign donations. From 1989 to 2008, some 384 politicians got their tip jars filled by Fannie and Freddie.

Over that time, the two GSEs spent $200 million on lobbying and political activities. Their charitable foundations dropped millions more on think tanks and radical community groups.

Did it work? Well, if measured by the goal of putting more poor people into homes, the answer would have to be yes.

From 1995 to 2005, a Harvard study shows, minorities made up 49% of the 12.5 million new homeowners.

The problem is that many of those loans have now gone bad, and minority homeownership rates are shrinking fast.

Fannie and Freddie, with their massive loan portfolios stuffed with securitized mortgage-backed paper created from subprime loans, are a failed legacy of the Clinton era.

bill clinton of NE @ Sep 26, 2008 21:18:28 PM

Politics trump Economics

If the American people believe Dodd, Frank, Reed, Peolsi, and Bush for a socialistic bail out, and McCain can't or won't stand up for capitalism, putting all the above down, then America doesn't have a chance. Spanish will become the official language of the USA and anyone speaking Obamas middle name will be labeled a terrorist

SimonSez of CA @ Sep 26, 2008 20:43:06 PM

Getting rid of George

Getting rid of George Dubya will not solve the problem. Since we are on the subject of Michael Corleone, then we must state as he would that the current problem is "not personal, but it is business." Thus, any personal attacks are irrelevant at this juncture or at any other when doing business.

Oleg Khaghani of NY @ Sep 26, 2008 20:09:12 PM

Mike Olson's comment

BINGO!

Steve C of PA @ Sep 26, 2008 17:07:30 PM

Punish the perps, not the taxpayers

I agree that tax payers should not be the ones footing the bill to bailout Wallstreet. However, taxpayers are not completely without fault themselves.

I for the last 6 years I have opposed the financial practices that have put us in this situation today. During those same 6 years many of my fellow tax payers have enjoyed the fruits of those corrupt practices and only now that it is failing are making a stink of it. "Oh ye hypocrites", now you have morals? Now you have a problem with how things are working because you're losing money?

I believe the House GOP intentions are good, but now they are only causing more damage.

Mike Olson of WA @ Sep 26, 2008 16:28:11 PM