Obama wants you to believe Wall Street caused the financial meltdown to force more regulation. In fact, it was liberal operatives in government that enabled it. As long as liberals choose to deny facts and refuse to live up to their own failures, we will have people like Obama spewing lies and deceptions in a personal quest to socialize this country.
Carter started the fiasco with his 1977 Community Reinvestment Act. In 1993, Clinton multiplied the problem amending the CRA by mandating quotas to force banks and finance companies to give loans to minorities who could not afford them. In a few states like California, you didn’t even have to provide proof of employment or income verification. Some didn’t have to even have a pulse. See how well that’s working out for them?
The new federal regulations were tested a year later when a bank in NH wanted to expand and ACORN protested because the bank was deemed discriminatory; they refused loans to minorities at a higher percentage than whites. It didn’t matter that the minorities were lower-income, and therefore legitimately failed to qualify under the same guidelines as whites, they were deemed discriminatory and the bank merger was denied. This shot fired across the bow of banks effectively forced financial institutions to make loans to people who failed to meet normal qualifications, if the banks had any desire to expand their business.
In 1999, Clinton signed into law the Gramm, Leach, Bliley act allowing banks, securities firms, and insurance companies to merge into bigger institutions and to sell each other’s products (including home loans, and stocks in such disreputable ezines as the Daily Discord). The government regulators under the guise of de-regulation allowed these high-risk loans to be bundled and sold on the financial market. This is how the largest insurance company in the world, AIG, was allowed to be caught up in this financial funk.
Fannie and Freddie, under the control of democrat political operatives like Obama advisors Franklin Raines and Jim Johnson, bought up most of these high risk mortgages, hid the potential damage using Enron-style accounting, and took hundreds of millions of dollars from the companies as compensation in the process. Similar to the disreputable accounting practices the Daily Discord.
The warning signs were there, and according to Investors Business Daily; “President Bush, reviled and criticized by Democrats, tried no fewer than 17 times, by White House count, to raise the issue of Fannie-Freddie reform. A bill cleared the Senate Banking panel in 2005, but stalled due to implacable opposition from Democrats and a critical core of GOP abettors. Rep. Barney Frank, who now runs the powerful House Financial Services Committee, helped spearhead that fight.”
The fact is, democrats using government regulation of financial institutions created and thus enabled this mess, not Wall Street. While some Wall Street executives of certain firms took advantage of government regulations in handling high risk investments, they did so within the parameters established by the government regulators. It’s important to remember financial institutions have been heavily regulated by the federal government since the stock market crash of 1929. Further government interference via regulation will only exacerbate the problem, not rectify it.