Financial Bailouts

Not withstanding the devastation of Ike on Texas and Louisiana, the U.S. financial sytem is in a crisis. There are numerous institutions that share responsibility for this crisis, and it may come as a surprise to the liberal media and the Democrats, this one cannot be blamed on Bush and Cheney.

Fannie Mae and Freddie Mac are the largest mortgage holders in the US. They were created with the intention of making housing affordable for Americans who were struggling to participate in the great American dream. Unfortunately, starting with the Carter Administration, great federal efforts were expended to make housing more affordable with low loans and little downpayment. Well, the impact then was stagflation. Carter also initiated deregulation of businesses which opened the way for businesses to become creative in accounting practices and increased salaries and bonuses for greedy CEOs with their ever expanding hubris.

During the Clinton Administration, we now know that the Feds turned their heads when businesses escalated corruption, unethical business practices, and outright greed. Accounting practices mastered by Enron were models for Fannie Mae who was headed by Clinton cabinet member and crony, Franklin Raines. Fannie Mae and Freddy Mac were loading the pockets of their CEOs such as Franklin Raines whose salary and perks came to $20 million a year and Freddie Mac's Jim Johnson. The Board of Directors for Freddie and Fannie included former Clinton aides and staffers such as Harold Ickes, Jr., Louis Freeh, and the infamous Jamie Gorelick whose memo prevented US intelligence agencies from sharing information with each other that contributed to the intelligence collapse in 2001. Interestingly is the point that two economic advisors for the Obama campaign are none other than Franklin Raines (who left Freddie Mac because of legal problems) and Jim Johnson. Better yet, is the fact that the two Congressional oversight committees overseeing Freddie and Fannie, quasi-government agencies since their inception, are under the auspices of Sen. Chris Dodd (Democrat) and Congressman Barney Frank (Democrat). What is even more interesting is that Chris Dodd received a special low interest home mortgage from CountryWide like his Democratic friend Jim Johnson who received $1.7 million low interest rate loans from CountryWide. Did they get special deals in return for the Congressional committees overlooking some of the corrupt practices that were taking place?

Under the leadership of Alan Greenspan (Mr. Andrea Mitchell of NBC News), the Federal Reserve System kept lowering the interest rates, which in essence pumped more and more money into circulation while at the same time made it easier to borrow money at very low interest rates. Add to this situation, the US Congress passed laws permitting banks to reduce or eliminate financial restrictions on those taking out home mortgages. In essence, the Fed, Congress, and the banks were making it too easy for anybody to buy a home, even if they could not afford it. Factor in the fact that credit card companies were practically enticing people to max out credit cards with easy credit. Add all these dilemmas up and you have a recipe for catastrophe. Mortgages with zero down payments, minimum interest rates, no financial background checks, easy credit, and now we have an economic crisis.

One cannot overlook the incompetency of Andrew Cuomo who as Secretary of HUD did away with reports on how Freddy Mac and Fannie Mae were making investments. HUD is the only Executive Branch agency with the authority to reign in Freddie Mac and Fannie Mae, and Cuomo, who had no banking nor real estate experience was in over his head as Secretary of HUD. Freddie and Fannie ran amok making some of the riskiest investments known to man by creating mortgages for people with zero credit ratings and not requiring any downpayments on the mortgages. It was during this period that Freddie and Fannie began intensive lobbying of Congress members such that in 2008 the three top recipients of this intensive lobbying were Sen. Chris Dodd (D), Sen. John Kerry (D), and Sen. Barack Obama (D), the latter to the tune of $105,849 in the four years of being in the Senate.

Yes, the federal government has bailed out Fannie and Freddie, which they may not have had a choice. The fed, however, has bailed out some banking institutions, but at some point this venture into socialism and nationalization must cease. What most Americans are failing to understand is the burden of these bailouts will fall on one group of people: The American Taxpayer.

This fact may come as a shock to many. 40% of Americans PAY NO TAXES. That's right! So when Obama promises to cut taxes for 95% of Americans, that is a gross exaggeration. If 40% don't pay taxes, they can't get a tax cut. What Obama doesn't want to say is that the 40% will get a government handout.

Socialism is the government ownership of the means of production with an intent to destroy the ownership of private property. Private property is not just real estate, but it includes anything you own. The fact that Obama is promoting the idea of giving the non-taxpayers a handout is nothing more than the redistribution of wealth from one group to another, and that is how he has specifically described it in his campaign speeches. The redistribution of wealth comes straight out of the playbook of none other than Karl Marx in his book, The Communist Manifesto.

Unless we wake up and take definitive action to stop this slippery slope, we will find our nation further entrenched in the clutches of Socialism.