It really makes you sick when you hear about things like this 

^5 8Ball, I am working that very concept even as I type.

Skip

I think we should (Americans), , take out a class action law suit against Bush and his Republican cronies.. Just think,,  We told you and told and told you back in 2000, don't elect Bush., But No-o-o,
a lot of voters didn't listen and the Bush Adminstration got in under the wire and in 7 short years has ruined this world.  The entire world Now  is in dire straits, and it makes you wonder what this world could have been if Gore had made it without that Florida fiasco.. (500 votes?)

The USA is now over ten Trillion in debt.,and adding over 300 billion a day to this debt.  Could Uncle Sam go bankrupt?.,,is there a possiblity???
and if so,, could you still defend yourself from Terrorists???

Yes someone definately deserves to Go to jail, and do not colllect $500 Million........

If everyone is 'under your Watch ' ( George W Bush ) he should be held liable..

... speaking of which.,, I can hardly wait to see the New Oliver Stone movie next week....

Here is a solid article that does a good job of explaining the origins of this crisis -- there is plenty of blame to go around - including rich Wall Street fat cats and greed - but let's not ignore the significant role that politics, lobbyists, and the government played in creating this mess!

Brian

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Planting Seeds of Disaster -- ACORN, Barack Obama, and the Democratic party.

By Stanley Kurtz

‘You’ve got only a couple thousand bucks in the bank. Your job pays you dog-food wages. Your credit history has been bent, stapled, and mutilated. You declared bankruptcy in 1989. Don’t despair: You can still buy a house.” So began an April 1995 article in the Chicago Sun-Times that went on to direct prospective home-buyers fitting this profile to a group of far-left “community organizers” called ACORN, for assistance. In retrospect, of course, encouraging customers like this to buy homes seems little short of madness.

Militant ACORN
At the time, however, that 1995 Chicago newspaper article represented something of a triumph for Barack Obama. That same year, as a director at Chicago’s Woods Fund, Obama was successfully pushing for a major expansion of assistance to ACORN, and sending still more money ACORN’s way from his post as board chair of the Chicago Annenberg Challenge. Through both funding and personal-leadership training, Obama supported ACORN. And ACORN, far more than we’ve recognized up to now, had a major role in precipitating the subprime crisis.

I’ve already told the story of Obama’s close ties to ACORN leader Madeline Talbott, who personally led Chicago ACORN’s campaign to intimidate banks into making high-risk loans to low-credit customers. Using provisions of a 1977 law called the Community Reinvestment Act (CRA), Chicago ACORN was able to delay and halt the efforts of banks to merge or expand until they had agreed to lower their credit standards — and to fill ACORN’s coffers to finance “counseling” operations like the one touted in that Sun-Times article. This much we’ve known. Yet these local, CRA-based pressure-campaigns fit into a broader, more disturbing, and still under-appreciated national picture. Far more than we’ve recognized, ACORN’s local, CRA-enabled pressure tactics served to entangle the financial system as a whole in the subprime mess. ACORN was no side-show. On the contrary, using CRA and ties to sympathetic congressional Democrats, ACORN succeeded in drawing Fannie Mae and Freddie Mac into the very policies that led to the current disaster.

In one of the first book-length scholarly studies of ACORN, Organizing Urban America, Rutgers University political scientist Heidi Swarts describes this group, so dear to Barack Obama, as “oppositional outlaws.” Swarts, a strong supporter of ACORN, has no qualms about stating that its members think of themselves as “militants unafraid to confront the powers that be.” “This identity as a uniquely militant organization,” says Swarts, “is reinforced by contentious action.” ACORN protesters will break into private offices, show up at a banker’s home to intimidate his family, or pour protesters into bank lobbies to scare away customers, all in an effort to force a lowering of credit standards for poor and minority customers. According to Swarts, long-term ACORN organizers “tend to see the organization as a solitary vanguard of principled leftists...the only truly radical community organization.”

ACORN’s Inside Strategy
Yet ACORN’s entirely deserved reputation for militance is balanced by its less-well-known “inside strategy.” ACORN has long employed Washington-based lobbyists who understand very well how the legislative game is played. ACORN’s national lobbyists may encourage and benefit from the militant tactics of their base, but in the halls of congress they play the game with smooth sophistication. The untold story of ACORN’s central role in the financial meltdown is about the one-two punch to the banking system administered by this outside/inside strategy.

Critics of the notion that CRA had a major impact on the subprime crisis ask how a law passed in 1977 could have caused a crisis in 2008? The answer has a lot to do with ACORN — and the critical years of 1990-1995. While the 1977 Community Reinvestment Act did call on banks to increase lending in poor and minority neighborhoods, its exact requirements were vague, and therefore open to a good deal of regulatory interpretation. Banks merger or expansion plans were rarely held up under CRA until the late 1980s, when ACORN perfected its technique of filing CRA complaints in tandem with the sort of intimidation tactics perfected by that original “community organizer” (and Obama idol), Saul Alinsky.

At first, ACORN’s anti-bank actions were relatively few in number. However, under a provision of the 1989 savings and loan bailout pushed by liberal Democratic legislators, like Massachusetts Congressman Joseph P. Kennedy, lenders were required to compile public records of mortgage applicants by race, gender, and income. Although the statistics produced by these studies were presented in highly misleading ways, groups like ACORN were able to use them to embarrass banks into lowering credit standards. At the same time, a wave of banking mergers in the early 1990's provided an opening for ACORN to use CRA to force lending changes. Any merger could be blocked under CRA, and once ACORN began systematically filing protests over minority lending, a formerly toothless set of regulations began to bite.


ACORN’s efforts to undermine credit standards in the late 1980s taught it a valuable lesson. However much pressure ACORN put on banks to lower credit standards, tough requirements in the “secondary market” run by Fannie Mae and Freddie Mac served as a barrier to change. Fannie Mae and Freddie Mac buy up mortgages en masse, bundle them, and sell them to investors on the world market. Back then, Fannie and Freddie refused to buy loans that failed to meet high credit standards. If, for example, a local bank buckled to ACORN pressure and agreed to offer poor or minority applicants a 5-percent down-payment rate, instead of the normal 10-20 percent, Fannie and Freddie would refuse to buy up those mortgages. That would leave all the risk of these shaky loans with the local bank. So again and again, local banks would tell ACORN that, because of standards imposed by Fannie and Freddie, they could lower their credit standards by only a little.
So the eighties taught ACORN that a high-pressure, Alinskyite outside strategy wouldn’t be enough. Their Washington lobbyists would have to bring inside pressure on the government to undercut credit standards at Fannie Mae and Freddie Mac. Only then would local banks consider making loans available to customers with bad credit histories, low wages, virtually nothing in the bank, and even bankruptcies on record.

Democrats and ACORN
As early as 1987, ACORN began pressuring Fannie and Freddie to review their standards, with modest results. By 1989, ACORN had lured Fannie Mae into the first of many “pilot projects” designed to help local banks lower credit standards. But it was all small potatoes until the serious pressure began in early 1991. At that point, Democratic Senator Allan Dixon convened a Senate subcommittee hearing at which an ACORN representative gave key testimony. It’s probably not a coincidence that Dixon, like Obama, was an Illinois Democrat, since Chicago has long been a stronghold of ACORN influence.

Dixon gave credibility to ACORN’s accusations of loan bias, although these claims of racism were disputed by Missouri Republican, Christopher Bond. ACORN’s spokesman strenuously complained that his organization’s efforts to relax local credit standards were being blocked by requirements set by the secondary market. Dixon responded by pressing Fannie and Freddie to do more to relax those standards — and by promising to introduce legislation that would ensure it. At this early stage, Fannie and Freddie walked a fine line between promising to do more, while protesting any wholesale reduction of credit requirements.

By July of 1991, ACORN’s legislative campaign began to bear fruit. As the Chicago Tribune put it, “Housing activists have been pushing hard to improve housing for the poor by extracting greater financial support from the country’s two highly profitable secondary mortgage-market companies. Thanks to the help of sympathetic lawmakers, it appeared...that they may succeed.” The Tribune went on to explain that House Democrat Henry Gonzales had announced that Fannie and Freddie had agreed to commit $3.5 billion to low-income housing in 1992 and 1993, in addition to a just-announced $10 billion “affordable housing loan program” by Fannie Mae. The article emphasizes ACORN pressure and notes that Fannie and Freddie had been fighting against the plan as recently as a week before agreement was reached. Fannie and Freddie gave in only to stave off even more restrictive legislation floated by congressional Democrats.

A mere month later, ACORN Housing Corporation president, George Butts made news by complaining to a House Banking subcommittee that ACORN’s efforts to pressure banks using CRA were still being hamstrung by Fannie and Freddie. Butts also demanded still more data on the race, gender, and income of loan applicants. Many news reports over the ensuing months point to ACORN as the key source of pressure on congress for a further reduction of credit standards at Fannie Mae and Freddie Mac. As a result of this pressure, ACORN was eventually permitted to redraft many of Fannie Mae and Freddie Mac’s loan guideline.

Clinton and ACORN
ACORN’s progress through 1992 depended on its Democratic allies. Whatever ACORN managed to squeeze out of the George H. W. Bush administration came under congressional pressure. With the advent of the Clinton administration, however, ACORN’s fortunes took a positive turn. Clinton Housing Secretary Henry Cisnersos pledged to meet monthly with ACORN representatives. For ACORN, those meetings bore fruit.

Another factor working in ACORN’s favor was that its increasing success with local banks turned those banks into allies in the battle with Fannie and Freddie. Precisely because ACORN’s local pressure tactics were working, banks themselves now wanted Fannie and Freddie to loosen their standards still further, so as to buy up still more of the high-risk loans they’d made at ACORN’s insistence. So by the 1993, a grand alliance of ACORN, national Democrats, and local bankers looking for someone to lessen the risks imposed on them by CRA and ACORN were uniting to pressure Fannie and Freddie to loosen credit standards still further.

At this point, both ACORN and the Clinton administration were working together to impose large numerical targets or “set asides” (really a sort of poor and minority loan quota system) on Fannie and Freddie. ACORN called for at least half of Fannie and Freddie loans to go to low-income customers. At first the Clinton administration offered a set-aside of 30 percent. But eventually ACORN got what it wanted. In early 1994, the Clinton administration floated plans for committing $1 trillion in loans to low- and moderate-income home-buyers, which would amount to about half of Fannie Mae’s business by the end of the decade. Wall Street Analysts attributed Fannie Mae’s willingness to go along with the change to the need to protect itself against still more severe “congressional attack.” News reports also highlighted praise for the change from ACORN’s head lobbyist, Deepak Bhargava.

This sweeping debasement of credit standards was touted by Fannie Mae’s chairman, chief executive officer, and now prominent Obama adviser James A. Johnson. This is also the period when Fannie Mae ramped up its pilot programs and local partnerships with ACORN, all of which became precedents and models for the pattern of risky subprime mortgages at the root of today’s crisis. During these years, Obama’s Chicago ACORN ally, Madeline Talbott, was at the forefront of participation in those pilot programs, and her activities were consistently supported by Obama through both foundation funding and personal leadership training for her top organizers.

Finally, in June of 1995, President Clinton, Vice President Gore, and Secretary Cisneros announced the administration’s comprehensive new strategy for raising home-ownership in America to an all-time high. Representatives from ACORN were guests of honor at the ceremony. In his remarks, Clinton emphasized that: “Out homeownership strategy will not cost the taxpayers one extra cent. It will not require legislation.” Clinton meant that informal partnerships between Fannie and Freddie and groups like ACORN would make mortgages available to customers “who have historically been excluded from homeownership.”

Disaster
In the end of course, Clinton’s plan cost taxpayers an almost unimaginable amount of money. And it was just around the time of his 1995 announcement that the Chicago papers started encouraging bad-credit customers with “dog-food” wages, little money in the bank, and even histories of bankruptcy to apply for home loans with the help of ACORN. At both the local and national levels, then, ACORN served as the critical catalyst, levering pressure created by the Community Reinvestment Act and pull with Democratic politicians to force Fannie Mae and Freddie Mac into a pattern of high-risk loans.

Up to now, conventional wisdom on the financial meltdown has relegated ACORN and the CRA to bit parts. The real problem, we’ve been told, lay with Fannie Mae and Freddie Mac. In fact, however, ACORN is at the base of the whole mess. ACORN used CRA and Democratic sympathizers to entangle Fannie and Freddie and the entire financial system in a disastrous disregard of the most basic financial standards. And Barack Obama cut his teeth as an organizer and politician backing up ACORN’s economic madness every step of the way.

— Stanley Kurtz is a senior fellow at the Ethics and Public Policy Institute.

Quoting Unicus69:

Quote:
...because nobody has learned a darned thing. 

AIG execs' retreat after bailout angers lawmakers

Quote:
Days after it got a federal bailout, American International Group Inc. spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company's meltdown.

AIG sent its executives to the coastal St. Regis resort south of Los Angeles even as the company tapped into an $85 billion loan from the government it needed to stave off bankruptcy. The resort tab included $23,380 worth of spa treatments for AIG employees, according to invoices the resort turned over to the House Oversight and Government Reform Committee.

So today we gave them $37.8 million more. 

Funny how the article doesn't mention that in demanding enforcement of the CRA they are only demanding that banks abide by US federal law, that housing advocacy groups including ACORN objected to subprime lending practices as predatory, and that these groups have been warning of the dangers of subprime lending since the early 90s.

The problem isn't that banks were pressured to loan to low-income people, or that people of low-income deserve the right to buy a home.  People of low income do deserve the right to own property rather than throwing money away on rentals.  The problem is that people have a dream home in their mind, and that these predatory lenders steered these people toward getting more home than they could afford.

They could, rather, have steered them toward affordable homes.  There are many available.  Just doing a quick search on one company's website I turned up 146 homes in my area under 25k.  Why are these labeled 'investment' properties?  Why are these marketed toward slumlords and house flippers?  That price is very affordable to someone with even an extremely modest income.  My home isn't my dream home - but it cost me $4000 + renovations and is completely paid off.  Yes, I want a larger, nicer home, but this is the home that I can afford right now and it's not that bad.  It's better than some of the apartments I've lived in and I have the satisfaction of knowing that it is mine. 

Yes, the borrower deserves some of the blame here.  Theoretically they should have known what they could and could not afford.  But not everyone has the level of education that I do - I know I can't afford a McMansion.  Deregulation allowed these lenders to trap borrowers into these loans, persuading them that they could afford this house.  Thinking that they surely won't give me this money if I don't qualify, if I can't afford it, the gullible borrower goes along.  These subprime mortgages were so profitable that banks did this over the objections and warnings of housing advocacy groups.

Yes, people on the right are looking to paste blame on the CRA in saying that it forced banks to lend to those who couldn't afford it, but others are pointing out that CRA regulated loans tend to be safe, the worst abuses of subprime lending came from institutions with the least (or no) federal oversight or regulation.  In fact CRA regulated institutions made fewer loans and at lower rates, and were half as likely to resell them (this is from a 2008 study by Traiger & Hinckley LLP).

Keep bias in mind.  They don't want to admit deregulation is behind this problem, so they're grasping for something to blame.  Both parties have their hands dirty with deregulation, so I will blame both equally.  Often however, the right seeks to fix blame on programs that are meant to assist the poor, because everyone wants to believe in Ragged Dick and no one wants to give money to people who don't 'deserve' it. But generally it's just not that simple.

Quoting skipnet50:

Quote:
Cassandra:

There is NO Constututional RIGHT to home ownership...nothing that could even be interpreted as such.

Skip

No, you're quite right.  But I didn't claim it was a Contitutional right.  My point, at least as I meant it, is that just because you don't have a lot of money doesn't mean you don't deserve the opportunity to own a home.  Previous lending practices may not have given people the opportunity to do so, and in using the CRA to encourage banks to eliminate lending practices that excluded people from being able to borrow based on race, background, etc (don't pretend these didn't exist) the government did a good thing. 

However, in this I think we're in agreement, people should buy the home they can afford now and buy the home they can't afford now later.  And in this rush of the ME generation and the need to keep up with the lifestyles they see on the telly, they bought into a home that they couldn't afford, yes they share some of the blame.  They should know better, even though we are continually bombarded with this as the normative. 

I still feel the lender deserves a share of the blame as well, however.  I can't afford a 100k home.  If I were a lender and lent someone like me that sort of money, knowing the borrower couldn't afford it and it would go into foreclosure, I deserve a share of the blame when this deal tanks, for so obviously planning to collect mortgage payments until the eventual foreclosure of the property that I would then be able to sell again.