Obama's Failed Economic Policies

This video that I found probably explains what's going on in the Housing Market better than practically any other one that I've found and it highlights the type of thinking that Obama has when it comes to economic policies. He wants to use Government as a tool to advance the Middle class, when let's face it. Government has NEVER been able to do anything other than get out of the way to help people get ahead. Sure government is useful to keep people from starving and barely provide a living, but when it comes to really improving our lives all of that is squarely in our hands and there's nothing that government can do to make it better. They CAN however make it worse, by taxing and regulating us to death.
What amazes me is that there are actually polls showing that Obama is benefiting from the Housing implosion, even though most of the evidence points to the Democrats mostly being at fault here. As far back as 2004 the Bush Administration tried and failed to regulate these institutions and the Democrats did everything they could to keep those companies from any regulation. McCain picked up on this and has tried again and again in 2005, 2006 and 2007 to regulate these entities but was stopped by the Democrats every time.

One of the primary points of the video is that the CRA is what caused this whole mess, but in truth probably 80 to 90% of the loans didn't fall under the CRA. However, with that said, it was the lowering of the Standards to Accommodate the CRA that allowed the abuses in the system. People used the whole "No Money Down" mentality to buy homes as investments, especially here in Florida where you could basically buy a home "Pre-Construction" for a lower price, and once it's built turn around and sell it for a higher price. Problem was there were too many investors and in the end not enough homeowners to sell to.
Where was Obama in this? Obama actually sued Citibank for not providing enough of these CRA Loans. In addition during the years when McCain was trying to get regulations passed on these institutions, Obama was silent while raking in the cash.
Want more proof of Obama's failed economic policies utilizing Government as a tool of change? Obama's plan to revitalize Chicago's inner cities with Rezko met with utter failure. Most of the homes they built together are today either boarded up or demolished.
What all of this shows is that the supposed "change" that Obama is talking about is nothing but more of the same. More of the same MASSIVE government institutions, more of the same Socialization of the U.S.A. More of the same Washington Potitics controlling markets. More of the same Tax and spend and then when that runs out you go and tax and spend some more. That's not change, it's more of the same failed economic policies!

The Root of All Evil

It's interesting to see the candidates trying to bloody each other over who's at fault for this Housing mess. The real root of the Problem is Bill Clinton, the problem however, is that most American's are so short sighted that they can't believe that someone who served so long ago, is still having an impact on our economy. Consider this though, before Bill Clinton's policy changes, if a bank was going to underwrite a loan to you or anyone else, it had to make the vast majority of these loans out to strict policy guidelines set by Freddie Mac and Fannie Mae. Income had to be verified, if there were no W2's there had to be at least 2 years of Tax Returns verifying your income. Credit had to be at least reasonably good and a strong 5 to 10% or better down payment was generally required (depending on Credit). If there was no income verification, and no tax returns, the only way it could be done was with a hefty 25% down payment. The reasons behind this was simple, if the bank could not sell the loan to investors, the bank was stuck with the loan for the life of the loan. Most banks had Community Reinvestment programs where they would allocate possibly 1% of local profits to go to low income families or no doc type loans, but generally these types of loans were very few and far between. Also, if you had a good relationship with the bank, they might do Investment loans for you, since they figured you would sell the home in a fairly short period of time and they would get their cash back. Finally, cities often put together Community Development loans offered to first time home buyers that often required no more than 1 to 3% down and were generally available at reduced interest rates. The vast majority of these "risky" loans though were simply not forwarded to Freddie Mac, Fannie Mae and Investors. They knew that these types of loans would undermine confidence in the system.

Clinton Chages the Game:
The Clinton Administration had a goal of making housing affordable to more people and so they made some very basic and fundamental changes at Freddie Mac and Fannie mae that basically said that these two companies could now start taking these types of "No Doc" loans that would usually only be available with a significant down payment The argument was that there were a lot of people that were self employed as Painters, Tile Setters, and other service professions making decent money, but writing off a lot of their personal expenses as Business expenses. These people could definitely afford to keep up with their mortgage payments even if they didn't have w2's. While that may have been the target audience, the abuses that happened when people thought they could buy homes for the sole purpose of flipping them was an unintended consequence. For nearly a decade after these regulation changes were made, they seemed to be working just as intended, but at some point the abuses started and as Wall Street saw money to be made, they jumped in with both feet into the bandwagon.
The last banking crisis 18 years ago (the Savings and Loan Mess) taught investors that the only S&L's that were saved from the mess were the ones who invested most of their cash in Home Mortgages, so they figured that this time would be the same thing. Unfortunately, they didn't realize that the rules had changed and this was now a different game.
The biggest problems came when the very same institutions that were supposed to be monitored by Congress started becoming some of it's biggest campaign contributors. These guys basically started cooking the books to make sure the Companies hit targets required to trigger their Bonuses. McCain began to blow the wistle on this 2 years ago, but of course no one listened, since they were doling out cold hard cash to practically everyone in Congress that had anything to do with thier oversight. Obama was one of the biggest beneficiaries of this money and he now acts as if McCain is somehow to blame, when McCain is the only one on record trying to stop these guys!

There are those who say that the Bible says that Money is the root of all evil, but that's not what it says in the Bible. What it says is that "The Love of money" is the root of all evil. Well this love fest got just a bit out of control didn't it.