Saturday, August 8, 2009

Obama's Role in the Economic Crisis

The economic fiasco which started in Sept 2008 represents the failure of socialism; the idea that you can take from capitalists the money to "help the poor." The crisis was not caused by Bush's deregulation (Bush did no such deregulation); deregulation is merely the scapegoat; a package deal designed to discredit capitalism and hide the fact that the cause of the problem was re-distribution.  In that sense, it was a successful program; almost 40% of the value of the stock market was re-distributed to someone hiding in the wings. 

Truly, the problem that created this crisis was government intervention in the economy. Today, we are attempting to "fix" this problem by capitalizing worthless loans, sending good money after bad and making the good money worthless.

It is no coincidence that the original TARP bill proposed by Bush and the Democrats included a provision to provide additional funding to ACORN. ACORN was an Obama supporter and a voter fraud organization (for Obama) that “helped” people get loans they could not afford. ACORN was very active in shaking down the banks and pressuring them to offer more loans to the poor. In other words, ACORN operatives threatened to boycott and hold public protests against banks unless they donated to ACORN and offered low interest loans to unqualified borrowers (sent to them by ACORN).

These tactics were taught at ACORN by Barack Obama back in the 1990s. They are the tactics of the community organizer. To the extent that he advocated the immoral shakedown tactics of ACORN, he is just as responsible for the economic fiasco as are Barney Frank, Christopher Dodd, ACORN, Bill Clinton and the Community Reinvestment Act (CRA).

Recently, in an article sent to me by a friend, I read the following:

"Most significantly, Penny Pritzker, the current Finance Chairperson of Obama's presidential campaign helped develop the complicated investment bundling of subprime securities at the heart of the meltdown. She did so in her position as shareholder and board chair of Superior Bank. The Bank failed in 2001, one of the largest in recent history, wiping out $50 million in uninsured life savings of approximately 1,400 customers. She was named in a RICO class action law suit but doesn't seem to have come out of it too badly.

As a young attorney in the 1990s, Barack Obama represented ACORN in Washington in their successful efforts to expand Community Reinvestment Act (CRA). In addition to making it easier for ACORN groups to force banks into making risky loans, this also paved the way for banks like Superior to package mortgages as investments, and for the Government Sponsored Enterprises Fannie Mae and Freddie Mac to underwrite them. These changes created the conditions that ultimately lead to the current financial crisis."1

What is wrong with increased sub-prime lending? The idea of providing more home ownership seems like a laudable goal. Isn’t it good for the economy that more people can buy homes? Isn’t it good that the government seeks to “level the playing field”?

If you encourage more loans to people with poor credit, you tranfer massive amounts of money from banks to government bureaucrats at Fannie Mae and Freddie Mac. What about people with good credit ratings who could have borrowed that money and made a profit for the banks? In addition, the government-created housing bubble attracted investors into housing construction and derivatives who could otherwise have been investing in viable opportunities?  Did this not drag the rest of the economy down too?

The principle of re-distribution is “from each according to his ability to each according to his need.”  Consider that, in the case of sub-prime lending, the poor were not helped. When they defaulted on their loans most of them were evicted while Fannie Mae and Freddie Mac executives gained bonuses in the millions of dollars. The companies that bought the derivatives, including those that insured those derivatives, were left holding worthless assets. 

When you use political action to influence economic decisions, like that under the CRA, you must attack banks by calling them racists. You must regulate banks and bring every day business decisions under the purview of the government. You must attack and eliminate self-sufficiency by calling it selfish.   

Socialists don't think their policies cause economic collapse; they have convinced themselves that helping the poor is more important than fostering free trade. It is a perfect scam, the dream of a flim-flam man. Imagine how they will feel when the people blame them for the economic collapse. Look at the YouTube videos of town hall meetings and you will see their look of bewilderment over being blamed.

The Tea Party protestors, confronted by the demand to sacrifice, refuse to capitulate to the takeover of society by government. These protestors, unlike the media, have concluded that the ideas advocated by Obama to justify his organizing work, have today become a Presidential administration operating on the same premises, methods and goals...but now supported by an even more powerful shakedown and racketeering scheme. What began as a program of supposedly benign re-distribution becomes a criminal gang making billions of dollars through extortion and racketeering. Al Capone would be proud.


1 comment:

  1. Great post. You are sweeping in your scope and at the same time bring it down to the basic violation of principle - the right to own, use and dispose of one's property - that the whole sham rests on.