Great video on the topic:
http://www.youtube.com/watch?v=TxgSubmiGt8
Timeline of the Economic Meltdown of 2008-2009:
1977: Democrat Congress enacts the Community Reinvestment Act, signed into law by Democrat President Jimmy Carter. The law "encourages" banks to "help meet the credit needs of local communities". The Act mandates banks invest in poor urban areas, regardless of credit-worthiness, beginning the decline of the quality of bank loans.
1991: The Home Mortgage Disclosure Act of 1975 that forces banks to disclose lending records is expanded to allow for comparisons of rejection rates by race.
1995: The administration of Democrat President Bill Clinton makes changes to the Community Reinvestment Act. The changes required banks to find ways to provide mortgages to poor communities in the area of the bank. The changes also let community activists like ACORN intervene at yearly bank reviews where they intimidated the banks by threatening bad publicity. The high-risk subprime mortgage loan market is created by these policies. Lenders are forced (by facing costly government penalites) into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making.
1998: Democrat Attorney General Janet Reno encourages enforcement of ambiguous discrimination lawsuits against lenders, stating "I discovered in talking to bankers, that it is better to educate first and then litigate later only if necessary. But you got to be prepared to litigate, and I am prepared to litigate when it's going to be necessary [...]. Since the inception of our fair lending initiative in 1992, the Department has filed and settled 13 major fair lending lawsuits [...]." Lenders become ever more fearful of government lawsuits based on games played by the democrats with lending statistics.
2001: The 4-month old administration of President George Bush produces its 2002 budget, and declares that the size of Fannie Mae and Freddie Mac is "a potential problem" because " financial trouble of a large GSE [Government Sponsored Enterprise] could cause strong repercussions in financial markets."
January 2003: Freddie Mac announces it has to restate financial results for the previous three years due to earnings manipulations [cheating on accounting reports].
June 2003: Freddie Mac is the subject of criminal federal securities investigations.
Sept. 2003: The Bush administration recommends the most significant regulatory overhaul in the housing finance industry since the savings and loan scandal, only to be thwarted by democrats in Congress, in particular representative Barney Frank. Mr. Frank stated "Fannie Mae and Freddie Mac do very good work, and they are not endangering the fiscal health of this country [...] I believe there has been more alarm raised about potential unsafety and unsoundness that in fact exists."
As reported in the NY Times: "The Bush Administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings-and-loan crisis a decade ago. Under the plan, disclosed at a congressional hearing today, a new agency would be created within the Treasury Dept to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage industry. The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their balloning portfolios. [...] A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates."
The NY Times continued: "Among the groups denouncing the proposal today were the National Association of Home Builders and the congressional Democrats who fear the tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing. 'These two entitites, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis' said representative Barney Frank of Massachusetts, the ranking democrat on the Financial Services Committee. 'The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'
Oct. 2003: Fannie and Freddie control 50% of the mortgage market in the USA (quasi socialism now truly in effect since Fannie and Freddie are government sponsored entities).
June 2004: Deputy Secretary of the Treasury Samuel Bodman repeats the Bush administration call for "a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System."
October 2004: Democrat Franklin Raines, CEO of Fannie Mae, testifies before Congress' House Financial Services Committee that his company's assets are so risk free that the capital for holding them should be under 2% (commercial banks ususally have 4% to 8%). This reduction entices large banks to buy up trillions of dollars worth of Fannie Mae sub-prime mortgages.
2004: The US Dept of Housing and Urban Dev (HUD) requires Fannie and Freddie to increase their purchase by tenfold (x10) - hundreds of billions ($434 billion in 2004-2006) - in securities backed by SUBPRIME LOANS. This decision was later determined to be an abject failure to regulate their actions. Freddie Mac spokeswoman Sharon McHale indicates higher goals by HUD "forced" Freddie to go into the subprime market to levels never seen before.
April 2006: Freddie Mac pays $3,800,000 in fines to the Federal Election Commission for violating political campaign laws. Freddie Mac executives used corporate resources to facilitate political contributions, a no-no. They were trying to influence politicians on the House Financial Services Committee.
May 2006: A federal regulator of Fannie Mae reports that Fannie overstated income and capital by a whopping $10,600,000,000. Senator John McCain (republican) calls for GSE regulations, warning "If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole." Too bad Mr. McCain did not brag about this enough in 2008, i dont think middle of the road voters had any idea?
November 2006: Democrats win majorities in both the federal House and Senate. At that moment, the US economy is growing at almost 3%, unemployment is at 4.5%, and inflation is under 2%. Now watch what happens.
June 2007: Two Bear Sterns hedge funds go kaput due to their mortgage investments, and the liberals-inspired sub-prime mortgage assets turn cancerous due to many defaults.
August 2007: President Bush asks Congress to pass a reform package for Fannie Mae and Freddie Mac but is ignored by the democrat-controlled chambers. President Bush warns Congress publicly again in December to reform the GSEs. And again in March 2008 at the Economic Club of New York meeting. And again in April, May, and June, President Bush issues pleas to Congress to reform Freddie and Fannie.
July 2008: Democrat Senator Chris Dodd states "There's sort of a panic going on today, and that's not what ought to be. The facts don't warrant that reaction, in my opinion [...] Fannie Mae and Freddie Mac were never bottom-feeders in the residential mortgage market. People ought to feel comfortable about that." If sub-prime loans and lax credit standards are not bottom-feeding, than what is?
July 2008: Secretary of the Treasury Hank Paulson (a Goldman Sachs guy) asks Congress to grant him authority to TAKE OVER Fannie and Freddie because of their imminent collapse. Why did President Bush appoint this guy, Goldman execs tend to be democrats. Paulson (the Treasury Dept) give Fannie and Freddie $25,000,000,000 to prop them up and keep them operating. [author's note: we should dissolve Fannie and Freddie and the affordable housing laws as soon as the economy recovers].
Sept. 2008: Investment Bank Lehman Brothers goes bankrupt. Senate majority leader Democrat Harry Reid acknowledges that the democrat Congress does not know the solution, stating "no one knows what to do". The stock market tumbles and many citizens and foreign investors draw down their money market accounts as well. Paulson and Fed Reserve Chairman Ben Bernanke outline the $700,000,000,000 Troubled Asset Relief Program (TARP) to bail out the financial system. Passed in October by the democrats and unfortunately some republican senators, along with $112,000,000,000 in unrelated pork spending.
Nov. 2008: Federal Government Secretary of the Treasury Paulson changes the TARP rules and instead of purchasing bad assets, buys shares of troubled banks to spur lending (true socialism now taking hold). $308,000,000,000 of taxpayer money is poured into Citibank.
December 2008: Democrat Congress agrees to "bail out" US auto companies.
February 2009: President Obama's new US Federal Treasury Dept Secretary Tim "the tax cheat" Geithner unveils the administration's $2,000,000,000,000 (that is right, trillion) TARP 2 idea, and the investor class responds by dropping the Dow Jones I.A. 382 points. President Obama signs the $787,000,000,000 stimulus bill, aka "Porkulus bill".
March 2009: Dow Jones I.A. hits bottom at 6500. 7000 points lower than when the democrats took over Congress in February 2007. Some small recovery is expected from federally funded construction projects and "green" development projects, but higher energy costs from anticipated cap-and-trade laws and restrictions to domestic development of oil and gas resources, and higher interest rates from trying to sell bonds to foreign investors to finance the massive deficit spending are expected to perpetuate the recession until the republican party's fiscal conservatives are put in control (possibly elected in 2010 and 2012?)
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