Skip to comments.Gerald Warner: Capitalism didn't kill the banks - socialism did (read and bookmark)
Posted on 11/22/2008 7:58:20 PM PST by FocusNexus
If we establish what caused that, we shall have discovered the root of the banking crisis. Well, that is easy: it was Gordon Gekko and his ilk, was it not? Actually, no: it was Bill Clinton and his cronies, with their politically correct affirmative action. That is the fact of the matter â the Clinton administration compelled the banks to lend to minorities, to comply with racial and social quotas that defied all the rules of banking.
In 1994 the New York Times reported jubilantly that the Clinton administration was leaning heavily on lenders to embrace people in low-income neighbourhoods or minority groups.
From then on, the madness gathered pace. In 1999, pressured by Clinton, Fannie Mae started a programme of extensive expansion of loans to people with low to moderate credit. Clinton's housing secretary Andrew Cuomo warned Fannie Mae and Freddie Mac that such loans must amount to 50% of their portfolio by 2001. Other government agencies joined the crusade. In 1999 the Justice Department was reported as trying to establish "a system of racial quotas in lending, regardless of credit risk".
Clinton's Federal Reserve compelled banks to accept welfare cheques and unemployment benefit as income sources to qualify for a mortgage. As the PC terror grew, brokers advised clients to claim they were 1% Native American to qualify for loans. These included the lunatic "Ninja" (No income, no job, no assets) loans. The most flagrant example was a $480,000 (Â£324,000) mortgage to an illegal alien from Mexico.
(Excerpt) Read more at news.scotsman.com ...
This is fact:
“In 1999, pressured by Clinton, Fannie Mae started a programme of extensive expansion of loans to people with low to moderate credit. Clinton’s housing secretary Andrew Cuomo warned Fannie Mae and Freddie Mac that such loans must amount to 50% of their portfolio by 2001.”
FoxNews did a special on it a few months ago, with dates adn specifics/
Every time I hear that ‘capitalism has failed’, it ususally turns out that some attempt to regulate the economy has run into an unintended consequence. It is not that capitalism has been tried and found wanting, it is that it hasn’t been tried at all.
Derivatives weren’t the problem, the problem was bad loans to people who had no ability to pay the mortgage, which was forced by the Clinton administration.
Just proved you are talking through your hat!!!
Derivatives and securitization made it possible to spread risk around and thereby allowed the system to temporarily absorb more debts destined to fail than would have otherwise been the case. The driving force which supplied the bad debts was the push to expand homeownership by lowering debt standards.
So, in my view, Clinton and Frank and company pushed the debt standards down and drove supply, while Fannie, Freddie, and a host of Wall Street actors increased the amount that could be absorbed as well as the demand.
Derivatives ARE the problem. We could fix the mortgage debacle, but we cannot fix the derivatives mess.
Read this article written in December of 1993 to understand what was going on at the time. Derivatives were incidental to the problem as were other factors. THE CAUSE of the problem is as this article states, Clinton’s enforcement and expansion of the Jimmy Carter era CRA legislation. It’s the fault all the way through to today of the Democrats period.
Link to Assault on The Mortgage Industry:
Rough but it is what happened!
"Today, Citigroup, once the nations largest and mightiest financial institution, has been brought to its knees by more than $65 billion in losses, write-downs for troubled assets and charges to account for future losses. More than half of that amount stems from mortgage-related securities created by Mr. Maherass team the same products Mr. Prince was briefed on during that 2007 meeting. "
"The guy who first had the opportunity to make a lot of money doing this was Mark Rich." the clintoons pardoned this guy, remember?
Read this real slow if that’s how you prefer to read. http://findarticles.com/p/articles/mi_m1282/is_n25_v45/ai_14779796
Written in 1993, so he has been running the show since that time. LOL
Were I not so concerned about you spreading disinformation to some unsuspecting readers that might happen upon your ignorance, I’d simply not respond anymore, but I am concerned for those whom might actually believe your blockheaded perspective.
You’re dead wrong on this. The derivatives were not the instigating problem, they were an incidental to the CRA legislation of which Clinton used to expand upon the base thereof, and force not only the Banks as legislated by the CRA, but also the Mortgage Industry as well.
You should read entirely the article I presented you the link to. You will see the groundwork set for what happened, and you will see how relevant the article of this thread is.
Your persistance in persuing the derivatives indicates you haven’t really paid the attention due to this tragedy at the hands of Carter, Clinton, Frank, and other Democrats whom fought successfully any Republican attempts to reform that legislation including the President of the United States whom brought up the matter several occasions.
The Democrats flat out stated there was no problem and balked at any reform whatsoever. It’s the Democrats stupid.
But realize also, there will still be those who blame captiatlism because it suits their convenience.
“org.whodat” is a sleeper troll — while pretending to be a conservative, always reliably jumps in to defend Democrats and bash Bush, Republicans and anything conservative.
His intent is is indeed to spread disinformation, it’s not that he doesn’t have an undestanding of the issues, he is deliberately trying to confuse and spread MSM type propaganda.
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