print“Spare some change, please? Forget that. Hand over another $8.4 billion to “Fannie Mae and sister company Freddie Mac.” “The Obama administration,” reports “My Way,” had “pledged to cover unlimited losses through 2012 for Freddie and Fannie, lifting an earlier cap of $400 billion.”
This via Jeff Tucker, in case you forgot who and what contributed to this affirmative-action driven downturn, here’s a New York Times’ story from 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….
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.
Back in 2008, some analysts had quipped that only North Korea and Cuba were more socialist than the US in the wake of the Fannie and Freddie bailouts. This space has regularly excoriated Republican hacks for referring deceptively to our cherished “American freedoms.” (Also see BAB’s “Fascism Rising” series of posts.)
As Jim Rogers pointed out, you have a free market in housing in China. If you watch this clip, be reminded not only of Bush socialism, but of the socialism of Palin, “Bush In A Bra.” Rather than shutting F&F down, a solution to which Repbulicans are now paying lip service, Palin wanted to fine tune the mortgage miasma; make it smaller and smarter.
I would add that, as a prelude to the discussion of our economic woes, it has become fashionable for commentators to condemn socialism for the rich; this makes one look benevolent. As execrable as corporatism is, it is no reason to ignore the massive wealth transfer from taxpayers to the poor in the context of F & F, a commitment that has contributed immeasurably to the economic meltdown.
Even the denizens of the left who inhabit the halls of our government couldn’t have possibly believed that this wholesale assault on common sense and fiscal responsibility could end any way but in disaster. I still believe it was done on purpose to sink the economy and initiate the chaos we have now. This confusion and crisis is the perfect atmosphere for a socialist takeover of the country.
Rob Allyn is a crony of George Bush. Allyn also got Vicente Fox elected president of Mexico. A few years ago Allyn said that illegal aliens were “entrenched” in this country.
I worked in the mortgage industry for a few years. Before that I sold new, single family homes. You can believe it when the experts say it was designed to fail.
I remember one family from south of the border. The patriarch was sitting in my office. On his knee was his daughter’s illegitimate child. Translating for him was his English speaking pre-schooler! Along with him was his American (sic) high schooler daughter. She told me that the family wanted to use 3 incomes to qualify for the home: his, hers (she had just graduated high school and was seeking employment) and the income of the daughter with the illegitimate child. The multi-generational family of 8 wanted to buy a 1,600 square foot home.
Illegal aliens were allowed into the country during the real estate bubble for two reasons: to provide cheap – read: “subsidized” – labor for the home builders, and also to colonize fast growing areas of the country.
So, folks need to remember that the mortgage mania was not just welfare for the rich and welfare for marginal borrowers, but also welfare for Mexico and a safety valve for the Mexican elites. They successfully rid themselves of millions of members of the Mexican underclass by shoving the underclass northward. This underclass is now “entrenched” in this country.
Think Jim Rogers knows this? Would he care even if he did?
“Think Jim Rogers knows this? Would he care even if he did?” I’ve read enough of Jim Rogers to believe he does. He was saying that this policy was detrimental during Clinton’s time. Jim Rogers gave up on the whole country years ago and moved overseas because he could see where things were going. Like to join him myself.
[The point was about immigration. JR is an open-borders fellow.]
Actually, the situation is much worse than James Huggins thinks. There was no reason whatever to trash the economy for the purpose of engineering a socialist takeover. America was taken over by socialists in 1933. The socialist politicians who created the housing bubble actually believed themselves to be doing the Lord’s work, making life better for us “little people.” That our present tyranny of the well-meaning will end in disaster is actually an optimistic view. A pessimist would see it continuing forever.