Members of Obama's Debt Panel: Government caused financial crisis

The Senate rejected the idea of a debt panel. So our community organizer-in-chief went ahead anyway with an executive order. Yet another example of his trumping the requirements of the US Constitution. In the setup, Obama stuffed the panel full of Democrats with only a handful of Republicans consisting of even fewer conservatives. The Republicans on the panel aren't playing along with eth Democrats ultimate plan to tax us into oblivion with eth pretense that it will bring down our debt. As a matter of historical fact, as I have pointed out many times before: each $1 in higher taxes results in $1.17 of new spending. Increasing taxes on anyone in any way will make the deficit worse, not better because Congress in whatever the opposite of infinite wisdom is, will simply spend it on new programs.But back to the revolt of the Republicans on the debt panel - from the HuffPo via memeorandum: Financial Crisis Panel In Turmoil As Republicans Defect; Plan To Blame Government For Crisis

The four Republicans appointed to the commission investigating the root causes of the financial crisis plan to bypass the bipartisan panel and release their own report Wednesday, according to people familiar with the commission's work.

Irony - they are bypassing a panel that bypassed Congress. Bwahahahahaha!

The Republicans, led by the commission's vice chairman, former congressman and chair of the House Ways and Means Committee Bill Thomas, will likely focus their report on the explosive growth of subprime mortgages and the heavy role played by the federal government in pushing mortgage giants Fannie Mae and Freddie Mac to purchase and insure them. They'll also likely focus on the Community Reinvestment Act, a 1977 law that encourages banks to lend to underserved communities, these people said.

The Republicans' report is expected to conclude that government policy helped inflate the housing bubble and that prices weren't expected to crash because the government pushed homeownership so aggressively. They say that the report will note that once the bubble burst, a financial panic followed because firms weren't adequately prepared.

Is this exactly news? Haven't we known about this for some time now? The housing meltdown wasn't caused by deregulation. Or by Wall Street greed. It was the result of government interference. I have posted on this several times, but here is the approximate sequence of events:

1. The Community Reinvestment Act (CRA) of 1977 is passed under Carter with pressure from groups like ACORN. It prohibts the practice of redlining - giving fewer loans to poor areas
2. Sometime in the early 1990s home loan data was required to collect racial statistical data, used later to make the false case that minorities were being discriminated against in the loans market
3. In 1995, Bill Clinton gave the CRA teeth. By the force of government, subprime loans were authorized specifically so that lower income minorities could buy homes without meeting the usual requirements.
4. Late in Clinton's second term he signed the Financial Services Modernization Act of 1999 and the Commodity Futures Modernization Act of 2000 that unleashed the GSEs of Fannie Mae and Freddie Mac (The housing meltdown points back to Bill Clinton (Again))
5. Fannie Mae and Freddie Mac began buying subprime notes giving rise to entities like Countrywide that specialized in the practice. Fannie and Freddie became bloated with bad loans, went bankrupt leading to the mortgage meltdown of 2008. The rest, as they say, is history.

An aside to the story is that Bush tried to reform Fannie and Freddie in 2002 to prevent exactly what was to happen in 2008, but was blocked by Congress in 2003. Never, ever forget who was most culpable for this crisis. Let's just do a video recap, shall we? I have posted on this issue many times over, including a post that pointed at kook Barney Frank as being part of the problem: (Barney Frank Busted! Was Responsible For Housing Meltdown After All)

Here's another damning video implicating Fannie Mae that I posted back in March: (Another video on who's to blame for the housing meltdown)

Or this one implicating Clinton and Obama: (The True Origins of This Financial Crisis; Part Deux)

Or this one showing Democrats attacking the Freddie Mac regulator: (Maxine Waters blows a gasket)

 

Also, read my former post The True Origins of This Financial Crisis that includes Carter, Clinton, the Community Reinvestment Act (CRA), Fannie Mae, Freddie Mac, etc. In short, though, the mortgage meltdown was due to affirmative action being mandated in the banking system, resulting in loans being made to people that quite simply didn't qualify for them. All of the evidence in the blogosphere has now been officially corroborated by the Democrat-controlled U.S. House. (Democrats admit: Financial Crisis caused by Democrat Intervention) So what are the Democrats doing about it? Staying the course! (Those that don't learn from history...: Democrats on path to repeat housing disaster)

The Republicans on the debt commission are correct, and history is repeating itself. Again.

UPDATE: Speaking of history repeating itself: Obama Has Run a Deficit Every Month Since His Inauguration

This is not going to end well.

UPDATE #2: Fanny and Freddie History: All the Devils are here: Mortgage Crisis Meltdown

http://theblogprof.blogspot.com/2010/12/members-of-obamas-debt-panel-government.html

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