Posted at 1:11 PM on Saturday, December 06, 2008 by David Horowitz
The continuing efforts of a fringe group of conservatives to deny Obama his victory and to lay the basis for the claim that he is not a legitimate president is embarrassing and destructive. The fact that these efforts are being led by Alan Keyes, an unhinged demagogue on the political fringe who lost a senate election to the then unknown Obama by 42 points should be a warning in itself.
This tempest over whether Obama, the child of an American citizen, was born on American soil is tantamount to the Democrats' seditious claim that Bush "stole" the election in Florida and hence was not the legitimate president. This delusion helped to create the Democrats' Bush derangement syndrome and encouraged Democratic leaders to lie about the origins of the Iraq War, and regard it as illegitimate as Bush himself. It became "Bush's War" rather than an American War with destructive consequences for our troops and our cause.
The Birth Certificate zealots are essentially arguing that 64 million voters should be disenfranchised because of a contested technicality as to whether Obama was born on U.S. soil. (McCain narrowly escaped the problem by being born in the Panama Canal zone, which is no longer American.)
What difference does it make to the future of this country whether Obama was born on US soil? Advocates of this destructive campaign will argue that the Constitutional principle regarding the qualifications for President trumps all others. But how viable will our Constitution be if 5 Supreme Court justices should decide to void 64 million ballots?
Conservatives are supposed to respect the organic nature of human societies. Ours has been riven by profound disagreements that have been deepening over many years. We are divided not only about political facts and social values, but also about what the Constitution itself means. The crusaders on this issue choose to ignore these problems and are proposing to deny the will of 64 million voters by appealing to 5 Supreme Court Justices (since no one is delusional enough to think that the 4 liberal justices are going to take the presidency away from Obama). What kind of conservatism is this?
It is not conservatism; it is sore loserism and quite radical in its intent. Respect for election results is one of the most durable bulwarks of our unity as a nation. Conservatives need to accept the fact that we lost the election, and get over it; and get on with the important business of reviving our country's economy and defending its citizens, and -- by the way -- its Constitution.
More on the view that liberals in government are the root cause of the financial crisis:
A reader made this comment to the report of the Republican chairman describing why the subprime crisis wasn't the cause of the financial crisis:
Go back and read your quotation more carefully. CRA sub prime loans were only a small percentage of all other sub prime loans and they did not perform much worse than other sub prime loans. This is the crux of what the Fed said in your comments. However, millions of sub prime loans other than CRA were made, particularly beginning in 1995 under the Clinton Administration. And a significant portion of these sub prime loans, if not all, were backed by Fannie Mae and Freddie Mac. Many borrowers have defaulted because the banks were forced to loan to people who were not required to place any down payment, many didn't even have a job, savings, credit history, or references. Most of these loans were to "the poor" but many were made to middle class and upper class borrowers, who are also defaulting as the value of their home decreases, largely because they didn't have to risk any of their own funds and paid virtually nothing against the mortgage, thus they view it as prudent to simply walk away, obviously not caring what their subsequent credit history will be.
Following are the major critical facts concerning this crisis:
The CRA was passed during the Carter administration and was tasked with lending to sub prime markets. Most of the loans were aimed at "the poor" but middle class and upper class individuals also benefited from these loans. However, banks had some discretion as to whether or not to make these loans, unlike what the case was beginning with the Clinton Administration in about 1995, when banks had virtually no discretion, or they were assured bad loans would be guaranteed by Fannie Mae and Freddie Mac. The latter two institutions began to back up millions of sub prime loans, far beyond the scope of the CRA act. Moreover, they were not allowed to require a down payment at all, let alone 20%, people didn't have to have a job, savings, a good credit history, references etc. and they could be illegal's and/or have a criminal past.
The CRA was only a minor part of the difficulty, usually mentioned only to give a historical perspective as to when this madness first began. It got much, much worse in 1995 and subsequently. Fannie Mae, Freddie Mac and government regulation forced banks to make bad loans, i.e., sub prime and this was a much larger part of the picture since the mid 90's. GWBush, on 17 different occasions, requested that Congress reign in Fannie Mae and Freddie Mac, but the democrats who head all 7 of the major banking committees, refused to do anything and accused Bush of deliberately trying to cause a financial panic. They swore Fannie Mae and Freddie Mac were completely sound and that there was no problem.
Patricia A. Helvenston, Ph.D.
Here's the answer:
(I didn't write the following, but I'm not going to identify who did and open him to the kind of ad hominem attacks that I myself have been subjected to. Suffice it to say he knows more about the economy than anyone posting to this threat):
It’s great how the story changes each time you poke a hole in it. The argument needs a little detail, because all of the things that she is talking about did happen (as did the CRA stuff), but the question is about cause and effect and that’s where she gets it completely wrong.
The question is was the financial crisis caused by broken risk models and loose monetary policy which led to dangerous financial innovation, bad incentives and all kinds of over leverage which everyone got sucked into including Fannie and Freddie (this is what almost every economist and financial expert thinks) or is was it caused by the US government forcing banks worldwide wide to over leverage themselves, take unnecessary risks and make bad loans so that black people could own homes as she claims below? In other words, which caused which? Did the loose money and bad risk models lead to the bad Freddie and Fannie policies or vice-versa?
If you believe the latter, there are many things that have to be explained such as why is this a global problem? Did bad loans to poor people in the US really cause Iceland to go bankrupt? Why don’t Freddie and Fannie own 100% of subprime loans? If Fannie and Freddie were being forced to take uneconomic loans, who bought the other uneconomic subprime loans? Did the US Government force foreign hedge funds to buy uneconomic subprime loans too? If the US Government forced mortgage originators to make the loans, then why were so many new mortgage originators created? Who would want to create such a bad business? And if they were being forced to do it, why did they market the bad loans so aggressively?
Here’s an excerpt from an interesting paper called “A Short History of Subprime” written in March of 2006 http://www.allbusiness.com/finance/3596857-1.html (just before you needed a narrative of blame):
“It wasn't until the mid-1990s that subprime lending began to gain traction: Rising interest rates in the mid-1990s led to declining origination volumes and intense financial competition in the prime market. Furthermore, the endorsement of the beginning of subprime securitizations by Wall Street firms and the willingness of investors to buy those securities represented an endorsement of this product segment, and provided impetus for expansion.”
So, investors and securitization (not Freddie and Fannie) triggered the demand for subprime mortgages.
This is consistent with this piece in the New York Times ( http://www.nytimes.com/2008/10/05/business/05fannie.html?scp=11&sq=fannie%20mae&st=cse). My favorite part (Mudd was CEO of Fannie Mae):
“‘You Need Us’
Shortly after he became chief executive, Mr. Mudd traveled to the California offices of Angelo R. Mozilo, the head of Countrywide Financial, then the nation’s largest mortgage lender. Fannie had a longstanding and lucrative relationship with Countrywide, which sold more loans to Fannie than anyone else.
But at that meeting, Mr. Mozilo, a butcher’s son who had almost single-handedly built Countrywide into a financial powerhouse, threatened to upend their partnership unless Fannie started buying Countrywide’s riskier loans.
Mr. Mozilo, who did not return telephone calls seeking comment, told Mr. Mudd that Countrywide had other options. For example, Wall Street had recently jumped into the market for risky mortgages. Firms like Bear Stearns, Lehman Brothers and Goldman Sachs had started bundling home loans and selling them to investors — bypassing Fannie and dealing with Countrywide directly.
“You’re becoming irrelevant,” Mr. Mozilo told Mr. Mudd, according to two people with knowledge of the meeting who requested anonymity because the talks were confidential. In the previous year, Fannie had already lost 56 percent of its loan-reselling business to Wall Street and other competitors.
“You need us more than we need you,” Mr. Mozilo said, “and if you don’t take these loans, you’ll find you can lose much more.”
Then Mr. Mozilo offered everyone a breath mint.
OK, so if the US government forced the mortgage brokers to make bad loans, then how do you explain that? The truth is that Freddie and Fannie requested looser rules so that they could compete with the private institutions that were buying up the subprime loans like hot cakes. All the loosening did was accelerate the process and kill Fannie and Freddie. Everything was clearly happening with or without them.
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