Sunday, October 5, 2008

Economic Crisis. Who is at fault? Read the Truth.


PREFACE: please note, I understand that this is a complex issue. There is plenty of blame to go around in both parties, across wall street, and main street. But as we examine the primary political players who are involved-the Democrats, more than the Republicans, were on the wrong side of the issue.


-April 2001 the Bush Administration warned of red flags regarding Fannie And Freddie (beginning of video)

-2002 Budget request warned that the size of Fannie and Freddie is a “potential problem” (0:28)

-2003 the white house warning was upgraded to a systemic risk that could extend beyond the housing market (0:40)

- Fall 2003 the Bush administration pushed congress hard for an agency that would regulate and supervise Fannie and Freddie (0:49)

- Then ranking member of the House Financial Services Committee, Barney Frank, pushed back, stating-“we are not in a crisis”.. and…“the federal government should be doing more to get low income families into houses”…and…“too many people had a sky is falling mentality”(1:15)

-In 2005, Alan Greenspan stated: “Enabling these institutions to increase in size-and they will once the crisis in their judgment passes-we are placing the total financial system of the future at substantial risk” (2:08)

-As a counter to Greenspan, NY Senator Charles Schumer stated: “I think Fannie and Freddie over the years have done a incredibly good job and are an intrinsic part of making America the best-housed people in the world…if you look over the last 20 or whatever years, they’ve done a very, very, good job”(2:38)


-McCain’s bill made it out of the Senate banking committee with a party-line vote, all democrats voting against it.



So…as you listen to Barney Frank and Chuck Schumer bloviate…keep in mind…they, along with many others on the left, are the ones who wanted less regulation….

John McCain Was right on this issue all along…….

Senator Obama didn’t even know there was an issue……

In fact, I still don’t think he knows there is an issue, as he continues to bask in the Florida sunshine, pretend he’s president, and learn how to not stutter during debates…..

This entry was posted on September 25, 2008 at 3:23 pm and is filed under obama with tags chicago against obama, mccain fanny mae freddie mac, mccain financial crisis, obama fanny mae freddie mac, obama financial crisis, obama mccain debates. You can follow any responses to this entry through the RSS 2.0 feed You can leave a response, or trackback from your own site.

George Says:

September 25, 2008 at 5:22 pm
The Honorable Sen. Barrack Obama and Fannie Mae CEO at The Black Caucusus

Republicans Get It Right. SoetorObama Says Nothing. « HillBuzz Says:

September 25, 2008 at 6:43 pm

McCain Had it Right in ‘06, Obama Still Clueless « Heroes for Hillary Says:

September 25, 2008 at 7:03 pm
[...] Via Chicagoans Against Obama with a h/t to [...]

FembotsForObama Says:

September 25, 2008 at 10:41 pm
Unfortunately, Dems denied there was a problem because they were too much into the pockets of Fannie and Freddie (especially Obama who in 4 years of being a US Senator was the #2 donor recipient).

One of the things that bugs me about Obama is why not jump to DC to gain control of this issue? Because after all, he is trying to now focus his campaign on the economy, playing moderate with middle class tax cuts emphasis. So why not look the hero to the American public by giving more public attention to this “crisis” with his presence?

Because then he would have also called attention to his campaign finance manager, Penny Pritzker, her role in the failed Superior Bank, her role as a predatory lender who owes 1/2 billion dollars to the US taxpayers, as well as the fact that her family was instrumental in getting subprime lending as a form of securities.

Guess that wouldn’t look too good to the American public? I know it didn’t look good to me.

George Says:

September 26, 2008 at 12:17 pm
After This I will Lighten up on Bill Clinton, after all Bill Clinton passed the contract for America and went against the Dem congress on it . I agree that he did try to do what was right and best for America, however…….

Atleast he is sorta sabotaging Obama which is good in my opinion and best for American ; NObama!

Minorities’ Home Ownership Booms Under Clinton but Still Lags Whites’
By Ronald Brownstein
May 31, 1999 in print edition A-5

It’s one of the hidden success stories of the Clinton era. In the great housing boom of the 1990s, black and Latino homeownership has surged to the highest level ever recorded. The number of African Americans owning their own home is now increasing nearly three times as fast as the number of whites; the number of Latino homeowners is growing nearly five times as fast as that of whites.

These numbers are dramatic enough to deserve more detail. When President Clinton took office in 1993, 42% of African Americans and 39% of Latinos owned their own home. By this spring, those figures had jumped to 46.9% of blacks and 46.2% of Latinos.

That’s a lot of new picket fences. Since 1994, when the numbers really took off, the number of black and Latino homeowners has increased by 2 million. In all, the minority homeownership rate is on track to increase more in the 1990s than in any decade this century except the 1940s, when minorities joined in the wartime surge out of the Depression.

This trend is good news on many fronts. Homeownership stabilizes neighborhoods and even families. Housing scholar William C. Apgar, now an assistant secretary of Housing and Urban Development, says that research shows homeowners are more likely than renters to participate in their community. The children of homeowners even tend to perform better in school. Most significantly, increased homeownership allows minority families, who have accumulated far less wealth than whites, to amass assets and transmit them to future generations.

What explains the surge? The answer starts with the economy. Historically low rates of minority unemployment have created a larger pool of qualified buyers. And the lowest interest rates in years have made homes more affordable for white and minority buyers alike.

But the economy isn’t the whole story. As HUD Secretary Andrew Cuomo says: “There have been points in the past when the economy has done well but minority homeownership has not increased proportionally.” Case in point: Despite generally good times in the 1980s, homeownership among blacks and Latinos actually declined slightly, while rising slightly among whites.

All of this suggests that Clinton’s efforts to increase minority access to loans and capital also have spurred this decade’s gains. Under Clinton, bank regulators have breathed the first real life into enforcement of the Community Reinvestment Act, a 20-year-old statute meant to combat “redlining” by requiring banks to serve their low-income communities. The administration also has sent a clear message by stiffening enforcement of the fair housing and fair lending laws. The bottom line: Between 1993 and 1997, home loans grew by 72% to blacks and by 45% to Latinos, far faster than the total growth rate.

Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more.

In 1992, Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains. It has aimed extensive advertising campaigns at minorities that explain how to buy a home and opened three dozen local offices to encourage lenders to serve these markets. Most importantly, Fannie Mae has agreed to buy more loans with very low down payments–or with mortgage payments that represent an unusually high percentage of a buyer’s income. That’s made banks willing to lend to lower-income families they once might have rejected.

But for all that progress, the black and Latino homeownership rates, at about 46%, still significantly trail the white rate, which is nearing 73%. Much of that difference represents structural social disparities–in education levels, wealth and the percentage of single-parent families–that will only change slowly. Still, Apgar says, HUD’s analysis suggests there are enough qualified buyers to move the minority homeownership rate into the mid-50% range.

The market itself will probably produce some of that progress. For many builders and lenders, serving minority buyers is now less a social obligation than a business opportunity. Because blacks and Latinos, as groups, are younger than whites, many experts believe they will continue to lead the housing market for years.

But with discrimination in the banking system not yet eradicated, maintaining the momentum of the 1990s will also require a continuing nudge from Washington. One key is to defend the Community Reinvestment Act, which the Senate shortsightedly voted to retrench recently. Clinton has threatened a veto if the House concurs.

The top priority may be to ask more of Fannie Mae and Freddie Mac. The two companies are now required to devote 42% of their portfolios to loans for low- and moderate-income borrowers; HUD, which has the authority to set the targets, is poised to propose an increase this summer. Although Fannie Mae actually has exceeded its target since 1994, it is resisting any hike. It argues that a higher target would only produce more loan defaults by pressuring banks to accept unsafe borrowers. HUD says Fannie Mae is resisting more low-income loans because they are less profitable.

Barry Zigas, who heads Fannie Mae’s low-income efforts, is undoubtedly correct when he argues, “There is obviously a limit beyond which [we] can’t push [the banks] to produce.” But with the housing market still sizzling, minority unemployment down and Fannie Mae enjoying record profits (over $3.4 billion last year), it doesn’t appear that the limit has been reached.

All signs point toward a high-velocity collision this summer between two strong-willed protagonists: HUD’s Cuomo and Fannie Mae CEO Franklin D. Raines, the first African American to hold the post. Better they reach a reasonable agreement that provides more fuel for the extraordinary boom transforming millions of minority families from renters into owners.

George Says:

September 26, 2008 at 1:59 pm
The Trojan Canadate from NoQuater

All you need to know

ChicagoBlood Says:

September 27, 2008 at 6:42 am
This is so surreal, Barney Frank is upset about McCain taking time out from his campaign to do the job he was elected to do?
Preventing this economic catastrophe was the job that Mr. Frank himself was elected to do and failed miserably at in light of the Fannie/Freddie fiasco. Is he upset that McCain is coming to town to help clean up the train wreck he (Mr. Frank and others) allowed to happen?

I can see why.

McCain and Bush’s efforts years earlier in trying to head off this catastrophe and McCains’ presence in DC UNDERSCORES THE INCOMPETENCE AND OR CORRUPTION OF THOSE RESPONSIBLE FOR THIS MESS.

The whole furor about McCain leaving the debate to attend to the problem at hand is laughable. It’s like finding out the debate hall is on fire and filled with smoke.
What are you going to do?
Tough, question; Do we debate or do we locate and put out the damn fire (or try to at this point)?
Well, it would seem to make sense to suspend the debate to put out the fire.
But that’s being rational. This clearly does not apply to a great many persons involved in this spectacle. Reason and common sense is absent as evidenced by the train-wreck that the New York Times has ironically and inadvertantly indicted Barney Frank and Democrat cohorts responsibility for ALLOWING.

Barney Frank and the rest of the numbskulls responsible for allowing this mess need to be shown the door.

yallmakemelaugh Says:

October 1, 2008 at 2:10 am
Obama never said a word.

ChicagoBlood Says:

October 1, 2008 at 8:21 pm

Obama never said a word, he just hired on Franklin Raines as his economic advisor.

You do know who Franklin Raines is don’t you?

ChicagoBlood Says:

October 3, 2008 at 12:16 am
I think we’re getting to the root of the problem here. But don’t take my word for it, read this September 30, 1999 edition of THE NEW YORK TIMES.

ChicagoBlood Says:

October 3, 2008 at 12:20 am

I think we’re getting to the root of the problem here but don’t take my word for it, read this 09-30-1999 edition of the NEW YORK TIMES.

Craig Says:

October 3, 2008 at 12:31 am
I’m confused. If all this regulation was requested by the Republican party before the year 2006 how come it never passed a House and Senate dominated by the Republicans?

Ray Says:

October 3, 2008 at 12:35 am

did you read the preface?

there is plenty of blame to go around (in both parties, wall street, and main street). make an honest assessment, not a partisan one.

ChicagoBlood Says:

October 3, 2008 at 7:22 pm
I watched O’Reilly annihilate Barney Frank last night and I am just stupified.

What sort of fantasy world is Barney Frank in that he cannot concede and take responsibility for his own statements that were played back to him complete and unedited? And to attack O’Reilly for being “boorish” and “ranting” after his own performance on the House floor a few days ago?

This man is having difficulty acknowledging his own culpibility in allowing the Fannie-Freddie train-wreck to happen.

There appears to be much credence to the ages old observation that if someone makes a practice out of lying, they soon begin to believe their own fabrications to the point where they don’t recognize the truth anymore when confronted with it.

More Democrat complicity in the crash

Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market. In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another
thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'' Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a
conventional, 30-year fixed rate mortgage of less than $240,000 -- a
rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the
economic boom of the 1990's. The number of mortgages extended to
Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cents. Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in
particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is
investigating allegations of racial discrimination in the automated
underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

You have to think Nancy Pilosi would want a do over if she could see this article together with her speech...Let the Comments Rain...God Bless...I do offer a solution in a previous post, but I did not want to repeat myself here...Jason

Who is really to blame for the crisis?

Congressman Barney Frank
Chairman of the House Financial Services Committee

Hearing from September 2003 on a Bush administration proposal to alter the regulation of GSEs like Fannie Mae and Freddie Mac. See Congressman Barney Frank's opening statement. It's rather amusing. Here's an excerpt of his opening statement:

"I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury.

I must say we have an interesting example of self-fulfilling prophecy. Some of the critics of Fannie Mae and Freddie Mac say that the problem is that the Federal Government is obligated to bail out people who might lose money in connection with them. I do not believe that we have any such obligation. And as I said, it is a self-fulfilling prophecy by some people.

So let me make it clear, I am a strong supporter of the role that Fannie Mae and Freddie Mac play in housing, but nobody who invests in them should come looking to me for a nickel--nor anybody else in the Federal Government. And if investors take some comfort and want to lend them a little money and less interest rates, because they like this set of affiliations, good, because housing will benefit. But there is no guarantee, there is no explicit guarantee, there is no implicit guarantee, there is no wink-and-nod guarantee. Invest, and you are on your own.

Now, we have got a system that I think has worked very well to help housing. The high cost of housing is one of the great social bombs of this country. I would rank it second to the inadequacy of our health delivery system as a problem that afflicts many, many Americans. We have gotten recent reports about the difficulty here.

Fannie Mae and Freddie Mac have played a very useful role in helping make housing more affordable, both in general through leveraging the mortgage market, and in particular, they have a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing, and that is what I am concerned about here. I believe that we, as the Federal Government, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals. I worry frankly that there is a tension here.

The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disastrous scenarios. And even if there were a problem, the Federal Government doesn't bail them out. But the more pressure there is there, then the less I think we see in terms of affordable housing."

Barney Frank (Sept. 2003)

The Democrats are Largely to Blame for the Current Financial Crisis

From Gateway Pundit at 9/21/2008 09:32:00 AM

Sunday, September 21, 2008
Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone... Dems Ignored Warnings

For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted.

Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.

The White House released this list of attempts by President Bush to reform Freddie Mae and Freddie Mac since he took office in 2001.
Unfortunately, Congress did not act on the president's warnings:

** 2001

April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

** 2002

May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

** 2003

January: Freddie Mac announces it has to restate financial results for the previous three years.

February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

** 2004

February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

** 2005

April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

** 2007

July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)

** 2008

January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase.

March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)

"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)

"Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.
In 2005-- Senator John McCain partnered with three other Senate Republicans to reform the government’s involvement in lending.
Democrats blocked this reform, too.

More... Not only did democrats not act on these warnings but Barack Obama put one of the major Sub-Prime Slime players on his campaign as finance chairperson.

UPDATE: The media is not reporting that the failed financial institutions are big Obama donors.
Hat Tip Larwyn
Labels: Campaign08

The Bishops are finally speaking out

I am gratified to see that some Catholic bishops are finally speaking out.

SALEM, Ore. (AP) - Archbishop John Vlazny is criticizing Oregon Governor Ted Kulongoski, a Catholic, for playing host to a pro-abortion rights fundraiser Friday night in Portland.

Vlazny, head of the Archdiocese of Portland, says it's an "embarrassment" for Catholics that Kulongoski is hosting the event two days before the church conducts its annual "Respect Life" mass in Portland to show opposition to abortion.

Kulongoski is a longtime supporter of a woman's right to choose an abortion. Spokeswoman Anna Richter Taylor says he has "respect and admiration" for the archbishop, but the two "obviously disagree" on the abortion issue.

©2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Thursday, September 25, 2008

Call me if you need me

The words of Senator Obama. He stated that the financial crisis is the "biggest crisis since the great depression". Then, he proceeded to campaign and prepare for the debate. Clearly, a sayer rather than a doer. The biggest crisis in 80 years and a man receiving 170 thousand dollars a year to be a US senator says: "Call me if you need me". What else needs be said?

No to the bail-out!

We are told of impending disaster. The free market has failed. The government, meaning you and I, have to step in to purchase worthless paper and save the American economy.

Don't believe it! The manipulated free market has failed. Government's push to promote lending to everyone in a misguided attempt to create economic equality has failed miserably. After all, why were Fannie Mae and Freddie Mac created in the first place? Left to its own devices, the free market would not have supported sub-prime lending and the attempt to "help" people to buy homes they could never afford.

A lack of oversight? Perhaps. But the government getting themselves involved in the first place sowed the seeds of the current problem. Now we are told we should proceed to the biggest step toward socialism in US history.

We should not allow this. At most, the government could offer loans to the financial institutions in question, at prime plus 2%. The American taxpayer should not become shareholders in failed companies.

Will there be a hard fall? Yes, very likely. But, the alternative is unacceptable. The national debt would double over-night. What if the bail-out does not work? Do we do it again a few years down the line? Let these institutions fail, keep government out of lending policy and stop trying to promote social change through manipulation of lending practices.

The bail-out will alleviate short term problems but will cause long term ones. Changing regulations to prevent this in the future is laudible. However, the government should not be in the business of salvaging bad businesses, be they auto-makers, airlines or financial institutions. There is no excuse for rewarding bad management. Investigations and appropriate prosecutions should be undertaken as they were in the Enron case.

We will hit bottom, but we will then have nowhere to go but up. Sounds cruel, but postponing it is more cruel.

Sunday, September 7, 2008

Obama may delay end to tax cuts

Obama: Recession Could Delay End to Bush Tax Cuts
by Associated Press
Sunday, September 7, 2008

WASHINGTON — Democrat Barack Obama says he would delay rescinding President Bush’s tax cuts on wealthy Americans if he becomes the next president and the economy is in a recession, suggesting such an increase would further hurt the economy.

DUH! If tax cuts are inadvisable in a recession because they further hurt the economy, then why are not these same tax cuts inadvisable when there is not a recession. This is because when there is no recession, there is more wiggle room and there is time between the tax increase and the economic downturn it causes. Time enough to avoid blame.

The fact is that increases in income tax of individuals or corporations reduces productivity, decreases profits and shrinks the economy, ending up in lost reduced wages, lost benefits and lost jobs. Obama just hopes he can get money into the hands of the people who did not earn it before the sky falls in.

Remember also who he considers wealthy. A small business owner working 90 hours a week grossing 250,000 per year is in the same category as Bill Gates, earning 20 MILLION dollars a DAY or 8 billion dollars a year. If Bill gates dropped a 1,000 dollar bill, he would not bend down to pick it up since in that 4 seconds he would have earned it back. This is the way he catches people, by using the term "rich" to lump people together who are not only not in the same league, but are not on the same earning planet.

Don't get me wrong. Bill Gates deserves his wealth. He started with nothing and earned it. He does not owe me anything and neither does he owe the rest of the country anything but paying his fair share of taxes. Even though doubling his personal income tax would do nothing to him, it would be wrong to do so.

Argument against a Palin detractor

The email I received, long as it is, comes first and my comments follow.

Dear friends,

So many people have asked me about what I know about Sarah Palin in the last 2 days that I decided to write something up.
Basically, Sarah Palin and Hillary Clinton have only 2 things in common: their gender and their good looks.

You have my permission to forward this to your friends/email contacts with my name and email address attached.



I am a resident of Wasilla, Alaska. I have known Sarah since 1992. Everyone here knows Sarah, so it is nothing special to say we are on a first-name basis. Our children have attended the same schools. Her father was my child's favorite substitute teacher. I also am on a first name basis with her parents and mother-in-law. I attended more City Council meetings during her administration than about 99% of the residents of the city.

She is enormously popular; in every way she's like the most popular girl in middle school. Even men who think she is a poor choice and
won't vote for her can't quit smiling when talking about her because she is a "babe".

It is astonishing and almost scary how well she can keep a secret. She kept her most recent pregnancy a secret from her children and parents
for seven months.

She is "pro-life". She recently gave birth to a Down's syndrome baby. There is no cover-up involved, here; Trig is her baby.

She is energetic and hardworking. She regularly worked out at the gym.

She is savvy. She doesn't take positions; she just "puts things out there" and if they prove to be popular, then she takes credit.

Her husband works a union job on the North Slope for BP and is a champion snowmobile racer. Todd Palin's kind of job is highly sought-after because of the schedule and high pay. He arranges his work schedule so he can fish for salmon in Bristol Bay for a month or so in summer, but by no stretch of the imagination is fishing their major source of income. Nor has her life-style ever been anything like that of native Alaskans.

Sarah and her whole family are avid hunters.

She's smart.

Her experience is as mayor of a city with a population of about 5,000 (at the time), and less than 2 years as governor of a state with about 670,000 residents.

During her mayoral administration most of the actual work of running this small city was turned over to an administrator. She had been pushed to hire this administrator by party power-brokers after she had gotten herself into some trouble over precipitous firings which had given rise to a recall campaign.

Sarah campaigned in Wasilla as a "fiscal conservative". During her 6 years as Mayor, she increased general government expenditures by over 33%. During those same 6 years the amount of taxes collected by the City increased by 38%. This was during a period of low inflatin (1996-2002). She reduced progressive property taxes and increased a regressive sales tax which taxed even food. The tax cuts that she promoted benefited large corporate property owners way more than they benefited residents.

The huge increases in tax revenues during her mayoral administration weren't enough to fund everything on her wish list though, borrowed money was needed, too. She inherited a city with zero debt, but left it with indebtedness of over $22 million. What did Mayor Palin encourage the voters to borrow money for? Was it the infrastructure that she said she supported? The sewage treatment plant that the city lacked? or a new library? No. $1m for a park. $15m-plus for construction of a multi-use sports complex which she rushed through to build on a piece of property that the City didn't even have clear title to, that was still in litigation 7 yrs later--to the delight of the lawyers involved! The sports complex itself is a nice addition to the community but a huge money pit, not the profit-generator she claimed it would be. She also supported bonds for $5.5m for road projects that could have been done in 5-7 yrs without any borrowing.

While Mayor, City Hall was extensively remodeled and her office redecorated more than once.

These are small numbers, but Wasilla is a very small city.

As an oil producer, the high price of oil has created a budget surplus in Alaska. Rather than invest this surplus in technology that will make us energy independent and increase efficiency, as Governor she
proposed distribution of this surplus to every individual in the state.

In this time of record state revenues and budget surpluses, she recommended that the state borrow/bond for road projects, even while she proposed distribution of surplus state revenues: spend today's surplus, borrow for needs.

She's not very tolerant of divergent opinions or open to outside ideas or compromise. As Mayor, she fought ideas that weren't generated by her or her staff. Ideas weren't evaluated on their merits, but on the basis of who proposed them.

While Sarah was Mayor of Wasilla she tried to fire our highly respected City Librarian because the Librarian refused to consider removing from the library some books that Sarah wanted removed. City residents rallied to the defense of the City Librarian and against Palin's attempt at out-and-out censorship, so Palin backed down and withdrew her termination letter. People who fought her attempt to oust the Librarian are on her enemies list to this day.

Sarah complained about the "old boy's club" when she first ran for Mayor, so what did she bring Wasilla? A new set of "old boys". Palin fired most of the experienced staff she inherited. At the City and as Governor she hired or elevated new, inexperienced, obscure people, creating a staff totally dependent on her for their jobs and eternally grateful and fiercely loyal--loyal to the point of abusing their power to further her personal agenda, as she has acknowledged happened in the case of pressuring the State's top cop (see below).

As Mayor, Sarah fired Wasilla's Police Chief because he "intimidated" her, she told the press. As Governor, her recent firing of Alaska's top cop has the ring of familiarity about it. He served at her pleasure and she had every legal right to fire him, but it's pretty clear that an important factor in her decision to fire him was because he wouldn't fire her sister's ex-husband, a State Trooper. Under investigation for abuse of power, she has had to admit that more than 2 dozen contacts were made between her staff and family to the person that she later fired, pressuring him to fire her ex-brother-in-law. She tried to replace the man she fired with a man who she knew had been reprimanded for sexual harassment; when this caused a public furor, she withdrew her support.

She has bitten the hand of every person who extended theirs to her in help. The City Council person who personally escorted her around town introducing her to voters when she first ran for Wasilla City Council became one of her first targets when she was later elected Mayor. She abruptly fired her loyal City Administrator; even people who didn't like the guy were stunned by this ruthlessness.

Fear of retribution has kept all of these people from saying anything publicly about her.

When then-Governor Murkowski was handing out political plums, Sarah got the best, Chair of the Alaska Oil and Gas Conservation Commission: one of the few jobs not in Juneau and one of the best paid. She had no background in oil & gas issues. Within months of scoring this great job which paid $122,400/yr, she was complaining in the press about the high salary. I was told that she hated that job: the commute, the structured hours, the work. Sarah became aware that a member of this Commission (who was also the State Chair of the Republican Party) engaged in unethical behavior on the job. In a gutsy move which some undoubtedly cautioned her could be political suicide, Sarah solved all her problems in one fell swoop: got out of the job she hated and garnered gobs of media attention as the patron saint of ethics and as a gutsy fighter against the "old boys' club" when she dramatically quit, exposing this man's ethics violations (for which he was fined).

As Mayor, she had her hand stuck out as far as anyone for pork from Senator Ted Stevens. Lately, she has castigated his pork-barrel politics and publicly humiliated him. She only opposed the "bridge to
nowhere" after it became clear that it would be unwise not to.

As Governor, she gave the Legislature no direction and budget guidelines, then made a big grandstand display of line-item vetoing projects, calling them pork. Public outcry and further legislative action restored most of these projects--which had been vetoed simply because she was not aware of their importance--but with the unobservant she had gained a reputation as "anti-pork".

She is solidly Republican: no political maverick. The State party leaders hate her because she has bit them in the back and humiliated them. Other members of the party object to her self-description as a fiscal conservative.

Around Wasilla there are people who went to high school with Sarah. They call her "Sarah Barracuda" because of her unbridled ambition and predatory ruthlessness. Before she became so powerful, very ugly stories circulated around town about shenanigans she pulled to be made point guard on the high school basketball team. When Sarah's mother-in-law, a highly respected member of the community and experienced manager, ran for Mayor, Sarah refused to endorse her.

As Governor, she stepped outside of the box and put together of package of legislation known as "AGIA" that forced the oil companies to march to the beat of her drum.

Like most Alaskans, she favors drilling in the Arctic National Wildlife Refuge. She has questioned if the loss of sea ice is linked to global warming. She campaigned "as a private citizen" against a state initiaitive that would have either a) protected salmon streams from pollution from mines, or b) tied up in the courts all mining in the state (depending on who you listen to). She has pushed the State's lawsuit against the Dept. of the Interior's decision to list polar bears as threatened species.

McCain is the oldest person to ever run for President; Sarah will be a heartbeat away from being President.

There have to be literally millions of Americans who are more knowledgeable and experienced than she.

However, there's a lot of people who have underestimated her and are regretting it.

*"Hockey mom": true for a few years
*"PTA mom": true years ago when her first-born was in elementary school, not since
*"NRA supporter": absolutely true
*social conservative: mixed. Opposes gay marriage, BUT vetoed a bill that would have denied benefits to employees in same-sex relationships (said she did this because it was unconsitutional).
*pro-creationism: mixed. Supports it, BUT did nothing as Governor to promote it.
*"Pro-life": mixed. Knowingly gave birth to a Down's syndrome baby BUT declined to call a special legislative session on some pro-life legislation
*"Experienced": Some high schools have more students than Wasilla has residents. Many cities have more residents than the state of Alaska. No legislative experience other than City Council. Little hands-on
supervisory or managerial experience; needed help of a city administrator to run town of about 5,000.
*political maverick: not at all
*gutsy: absolutely!
*open & transparent: ??? Good at keeping secrets. Not good at explaining actions.
*has a developed philosophy of public policy: no
*"a Greenie": no. Turned Wasilla into a wasteland of big box stores and disconnected parking lots. Is pro-drilling off-shore and in ANWR.
*fiscal conservative: not by my definition!
*pro-infrastructure: No. Promoted a sports complex and park in a city without a sewage treatment plant or storm drainage system. Built streets to early 20th century standards.
*pro-tax relief: Lowered taxes for businesses, increased tax burden on residents
*pro-small government: No. Oversaw greatest expansion of city government in Wasilla's history.
*pro-labor/pro-union. No. Just because her husband works union doesn't make her pro-labor. I have seen nothing to support any claim that she is pro-labor/pro-union.


First, I have long believed in the importance of being an informed voter. I am a voter registrar. For 10 years I put on student voting programs in the schools. If you google my name (Anne Kilkenny +
Alaska), you will find references to my participation in local government, education, and PTA/parent organizations.

Secondly, I've always operated in the belief that "Bad things happen when good people stay silent". Few people know as much as I do because few have gone to as many City Council meetings.

Third, I am just a housewife. I don't have a job she can bump me out of. I don't belong to any organization that she can hurt. But, I am no fool; she is immensely popular here, and it is likely that this will cost me somehow in the future: that's life.

Fourth, she has hated me since back in 1996, when I was one of the 100 or so people who rallied to support the City Librarian against Sarah's attempt at censorship.

Fifth, I looked around and realized that everybody else was afraid to say anything because they were somehow vulnerable.

I am not a statistician. I developed the numbers for the increase in spending & taxation 2 years ago (when Palin was running for Governor) from information supplied to me by the Finance Director of the City of Wasilla, and I can't recall exactly what I adjusted for: did I adjust for inflation? for population increases? Right now, it is impossible for a private person to get any info out of City Hall--they are swamped. So I can't verify my numbers.

You may have noticed that there are various numbers circulating for the population of Wasilla, ranging from my "about 5,000", up to 9,000. The day Palin's selection was announced a city official told me that the current population is about 7,000. The official 2000 census count was 5,460. I have used about 5,000 because Palin was Mayor from 1996 to 2002, and the city was growing rapidly in the mid-90's.

Anne Kilkenny <>
August 31, 2008


These allegations may make liberals feel better, but they are untrue. Palin has an approval rating of greater than 80% in Alaska. The whistle blowing she did against corrupt officials in her own party is a matter of public and court record. The US constitution originally intended our governments to run on excise and sales taxes, which tax consumption, not production. Property and income taxes tax production and savings, reducing economic growth. The author got it wrong. Sales taxes and excise taxes are progressive. Income and property taxes are regressive. Her sales tax took advantage of tourism dollars and her reduction of property tax benefitted homeowners as well as big business. The objective is not to vilify big business, but to help it grow thereby increasing tax revenue and providing jobs. Yes, she did get rid of public employees if they were not competent without regard to friendships. That is how government is supposed to work! Interesting that the author tries to pull the heart strings about this, yet if Palin had not done so she would then be accused of nepotism.

Yes, the town budget increased by 33% and yes the revenues increased by 38%. Isn't that how it is supposed to work? More revenues than spending? The author of this letter claims the revenues were increased unfairly on the backs of the people. The people had their property tax reduced. The tax reforms that benefited large property owners did so because they owned more peoperty! DUH! If I pay $5000 in tax and you pay $500 in tax, and there is a tax rebate of 10%, I get back $500. and you get back $50. Again, DUH! This is another far left big "business is evil" attack. If you hate big business, try drilling for your own oil. No one is stopping you from developing your own cold fusion, making biodiesel, erecting a windmil on your house or using a bicycle.

Her record in city hall can be found here, for those who really want to know.

She rightly decided that the buget surplus belonged to the people. Many liberals did not like this because those who paid more taxes got more money. However, it is the only fair way. Again, the liberal idea of "wealth redistribution", taking from the rich, who earned their money, and giving to the poor, who did not, seems great. But, if most of you were asked to give 20% more of their income to help inner city kids, you would not do so! However, you have no problem making other people do so.

As for her daughter, the liberals would be happy if she was on birth control, exercising her rights by having joyful sex with the entire football team and had several abortions. The fact that she fell in love, had "unprotected" sex, became pregnant, is keeping the baby and marrying the father eats at their craw.

The attacks on this accomplished woman are inexcusable. Proof that pro-women's groups are really pro-liberal women's groups. At least she has been a governor. Obama has been an absentee senator for most of the time since he took office. He began his campaign less than a year after entering office. At least Gov. Palin did not get where she is by riding the coat tails of her husband, as some women have. Can anyone doubt that if Hillary Clinton had not been Bill's wife she would never have had the chance to run for the senate?

Bill Clinton was the governor of Arkansas. Was he more qualified because his state had more people than Alaska does? Do governors of larger states rank higher than those of states with smaller populations? Should land area count? If so, Alaska is larger than 1/3 of the continental US. Let's see, Arkansas (when Bill was governor) 1.4 million people. Alaska 678,000 people. So, Bill was double as qualified? That means that the governor of New York, with 20 million people, is 14 times more qualified to be president than Bill was? Or, Rudi Guliani, former mayor of NYC, with 8 million people, is 6 times more competent to be president than Bill was? Preposterous! Again, the liberal propensity of arguing one way when it suits them, but refuting the same line of reasoning when it does not.

Income redistribution does not work. Equal opportunity does not mean a guarantee of equal economic benefits for all regardless of their contribution. It means that people have the freedom to rise to the level their abilities and hard work allows. Equality does not mean "same", it means that people are of equal intrinsic worth. This can not mean all are intrinsically entitled to equal economic status as this leads to economic implosion. Even communist China figured that one out.

Sarah Palin has worked hard and has advanced commensurate with her abilities and hard work. Unless Obama gets in, each of us still has the freedom to do the same.


Misconceptions about the Catholic Church

There is much dislike and even hatred of the Catholic Church. Most of this, I firmly believe, comes from ignorance of what the Catholic Church is and what it teaches. Too often the teachings of the Church are taken out of context, using one biblical verse to condemn its teaching and leaving out the verse immediately following that would affirm it. Some Christians even question whether the Catholic Church is Christian! These absurd allegations usually come from pastors of break-away churches wherein these persons desire authority for themselves. Kind of like the first fall?? (If the Bible is all that is needed, then these pastors are themselves unnecessary). These allegations are fed by the lack of knowledge of religion, history and scripture on the part of those to whom they preach and by the guarantee of salvation to all regardless of their actions. Fed even more by the overwhelming effect that rote memorization and the ability to quote chapter and verse, backward and forward has on the average person who attends these churches. Here is the link a website put together by a wonderful lay person that faithfully answers questions about Catholicism. I had been planning such a site but when I came across this one I realized the job had been done and there was no reason to re-invent the wheel. God Bless David and his wonderful website.