Wednesday, September 17, 2008

Hogs In Suits

The full content of John Gibson's commentary yesterday:

Lehman Brothers collapse is traced back to Fannie Mae and Freddie Mac, the two big mortgage banks that got a federal bailout a few weeks ago.

Freddie and Fannie used huge lobbying budgets and political contributions to keep regulators off their backs.

A group called the Center for Responsive Politics keeps track of which politicians get Fannie and Freddie political contributions. The top three U.S. senators getting big Fannie and Freddie political bucks were Democrats and No. 2 is Sen. Barack Obama.

Now remember, he's only been in the Senate four years, but he still managed to grab the No. 2 spot ahead of John Kerry — decades in the Senate — and Chris Dodd, who is chairman of the Senate Banking Committee.

Fannie and Freddie have been creations of the congressional Democrats and the Clinton White House, designed to make mortgages available to more people and, as it turns out, some people who couldn't afford them.

Fannie and Freddie have also been places for big Washington Democrats to go to work in the semi-private sector and pocket millions. The Clinton administration's White House Budget Director Franklin Raines ran Fannie and collected $50 million. Jamie Gorelick — Clinton Justice Department official — worked for Fannie and took home $26 million. Big Democrat Jim Johnson, recently on Obama's VP search committee, has hauled in millions from his Fannie Mae CEO job.

Now remember: Obama's ads and stump speeches attack McCain and Republican policies for the current financial turmoil. It is demonstrably not Republican policy and worse, it appears the man attacking McCain — Sen. Obama — was at the head of the line when the piggies lined up at the Fannie and Freddie trough for campaign bucks.

Sen. Barack Obama: No. 2 on the Fannie/Freddie list of favored politicians after just four short years in the Senate.

Next time you see that ad, you might notice he fails to mention that part of the Fannie and Freddie problem.

Also according to the Center for Responsive Politics:

Lehman Brothers has given $9.2 million through employees and its PAC since 1989, with 54 percent of that going to Democrats. Clinton and Barack Obama top the list of all-time recipients for the company, collecting $410,000 and $395,600 respectively.

I think it needs to be said many times that when Obama blames the Republicans for the current "financial crisis" he is being a bit more than disingenuous. I would go as far as to call him a liar. So much for his promise to transcend the old political games. I'm pretty disappointed in how he's come around to that.

I do recall back around 2004, or thereabouts, maybe in one of his State of the Union addresses, President Bush spoke about his wish that more people could become homeowners because he thought it would make them more financially secure. Unfortunately, the greedy Bastard-Pigs-In-Suits who controlled the big financial services companies, who apparently were very invested in the Democrats, took that as some kind of free pass for taking advantage of the people's desires to become homeowners.

I watch a fair amount of TV, mostly news, nature/science documentaries, and a few "reality shows" sometimes. Well, I think it's a good way to gauge the trends of our society to see what is foremost in the popular culture. Commercials are one big source of these trends. Before the housing bubble burst, there were always very many commercials for mortgage and lending companies who were pushing these ridiculous, but superficially attractive, offers for people to get loans, e.g. for 125% of the value of their homes, and those very low "introductory rates" that would allow payments of only, for example, $900 on a loan of $200,000. Also, many of the offers told us that "everyone is approved" or some such encouragement for people to apply who really had no business getting big loans in the first place. Of course, many people are ignorant about these gimmicks and/or the lenders were pretty sneaky about the actual terms of those loans.

Let me explain why those lenders foolishly threw money at so many people. They were thinking that when the low introductory rates ended and people could no longer afford their payments, then they could foreclose on the loans and resell those homes for at least the value of the loan because housing values were climbing so much. They either didn't see that it was a bubble that was going to burst, or they knew and didn't care. And yes, I do blame the lenders more than the borrowers because any reputable and responsible lender is not going engage in trickery and very risky practices in hopes of getting some big pay-off from overly inflated collateral.

A big factor in the housing bubble bursting was when the construction industry responded to the higher demand for new homes, that people wanted to buy with those over-valued mortgages so that they could get more house for less money. They pretty much started a home-building boom because they thought that they would be able to sell all these new houses. It made the economy look pretty good for a while because more people were working and because the increased construction required more materials, supplies, and all the other stuff that is needed when there is a lot of building. It looked like great economic growth.

But it was just an illusion because it was ultimately based on some worthless paper and money games with no real collateral backing it up, not even all those houses out there with no one able to buy or sell them. It was not that capitalism failed. It was that some crooks pretending to be capitalists built their 'house of cards' out of speculation and greed without any solid foundation. You know, most actual functioning businesses just cannot and will not survive by trying to sell something that doesn't really exist. Didn't anyone learn anything from that DotCom bubble bursting?

If someone really wants to place some sort of final blame for these troubles we're in now, they should really look to the people at the top of the chain and who they support and who supports them and their actions. And if you really look you will see that it was not the "evil" capitalist Republicans who exploited the people's hopes and dreams for a better life. It was the Deomcrats who raked in millions at the expense of us all. Do the research. Look it up. Learn the reality and truth of the matter. And stop blaming the wrong guys. Blame the real Hogs in Suits who are pretending to be something else.

Amen, go in peace. ;-)

PS I love Neil Cavuto. He has some seriously big balls because he is the only person I've seen really stand up to Bill O'Reilly and put him in his place. Last night Cavuto was on the Factor and called Bill out on his wanting to blame the wrong guys for all of our troubles:

Bill wants the government to "watch" the big corporations in order to let us know when they are doing bad business. Well, that's a pretty naive view because it trusts the same guys who are the source of the trouble to self-regulate. It won't work. That approach never has worked. Besides, it sounds like he wants the government to be 'fortune tellers' (literally and figuratively) who can predict what companies will succeed or fail. Fortune-telling isn't a very solid business venture either, privately or publicly. ;-)

The real solution is to level the playing field by requiring all those big corporations to play by the same rules as the small businesses that can't and won't survive if they engage in ridiculous pretend capitalism and they aren't protected and bailed out by the government when it all fails for them. Cavuto is right that you can't blame the oil companies for having real profits because the oil companies are actually making money from real products and services and not some worthless paper. Don't penalize the successful capitalists for being successful. Bill O'Reilly should know that because he's always preaching that when it comes to his own money. ;-)

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