September 23, 2008
"We gambled, you pay"
I thought it prudent to link to this article as an antidote to the piles of bullshit the kool-aid drinkers and fellow travelers are pushing on the Internet. As I've written before, everybody has blood on their hands in the economic crisis we're facing. However, one party bears direct responsibility because, as usual, they sold their corrupt souls for votes and contributions. Can any of you guess which party I'm talking about?
What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.[...]
If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.
But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.
That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''
This is the bottom line, ladies and gentleman. No reform of these two federal abominations led to today's chaos. As a matter of fact, I'll go further than that and say that, without the Community Reinvestment Act of 1977 (12 U.S.C. 2901) and its unintended consequences, we wouldn't be here today. Care to guess what President pushed that bill? Care to guess what party that President belonged to? These folks are all suffering chronic cases of Democrat Selective Amnesia syndrome.
So please, people, spare us the bullshit. We have more than enough coming from both sides on this issue.
Posted by George Moneo at September 23, 2008 10:43 AM
Comments
the big mistake was the repeal of Glass Steagall in 1999 -- a bi partisan mistake.
Posted by: Cigar Mike Pancier ![[TypeKey Profile Page]](http://www.babalublog.com/nav-commenters.gif)
at September 23, 2008 11:49 AM
Thanks for reminding me. I mentioned that in a conversation last week as one the collapsed pillars that brought down Lehman and Bear Stearns.
Posted by: George L. Moneo at September 23, 2008 12:00 PM
But of course, it's still not their fault. Just ask Nancy ("I can't feel my face anymore") Pelosi, or Harry ("Power compensates for being the human equivalent of cigarette ash") Reid.
Posted by: asombra at September 23, 2008 12:27 PM
Democrats are like the current South American countries led by the left, like Chavez....They fuck shit up, but must always point the blame to someone else. This is just pathetic!
Posted by: readytoshoot at September 23, 2008 12:50 PM
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