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When is McCain going to be honest on what caused this mess? Is he going to start naming names?

The Real Culprits In This Meltdown By INVESTOR'S BUSINESS DAILY | Posted Monday, September 15, 2008 Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it's dysfunctional, Democrats during the Clinton years are a prime reason for it. -------------------------------------------------------------------------------- Read More: Business & Regulation -------------------------------------------------------------------------------- Obama in a statement yesterday blamed the shocking new round of subprime-related bankruptcies on the free-market system, and specifically the "trickle-down" economics of the Bush administration, which he tried to gig opponent John McCain for wanting to extend. But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions. Tough new regulations forced lenders 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. It was either that or face stiff government penalties. The untold story in this whole national crisis is that President Clinton put on steroids the Community Reinvestment Act*, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory." Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck. And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America. As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud. Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million. Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses. In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes in its accounting procedures and ways of managing risk. But it was too little, too late. Raines had reportedly steered Fannie Mae business to subprime giant Countrywide Financial, which was saved from bankruptcy by Bank of America. At the same time, the Clinton administration was pushing Fannie and her brother Freddie Mac to buy more mortgages from low-income households. The Clinton-era corruption, combined with unprecedented catering to affordable-housing lobbyists, resulted in today's nationalization of both Fannie and Freddie, a move that is expected to cost taxpayers tens of billions of dollars. And the worst is far from over. By the time it is, we'll all be paying for Clinton's social experiment, one that Obama hopes to trump with a whole new round of meddling in the housing and jobs markets. In fact, the social experiment Obama has planned could dwarf both the Great Society and New Deal in size and scope. There's a political root cause to this mess that we ignore at our peril. If we blame the wrong culprits, we'll learn the wrong lessons. And taxpayers will be on the hook for even larger bailouts down the road. But the government-can-do-no-wrong crowd just doesn't get it. They won't acknowledge the law of unintended consequences from well-meaning, if misguided, acts. Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions. While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge. Market failure? Hardly. Once again, this crisis has government's fingerprints all over it. *In the original version of this editorial, the Community Reinvestment Act was mistakenly listed as the "Community Redevelopment Act". http://www.ibdeditorials.com/IBDArticles.aspx?id=306370789279709

Public Comments

1. I don't think it matters. Hardcore Democrats will dismiss the truth as lies like they often do..
2. Once the bail out bill is passed the Republicans will "out" all the democrats such as Barney Frank for their culpability in this fiasco.
3. Nice rant. Does McCain own a mirror? If so, then we might want to start with Mr Deregulater himself
4. no he won't because he's a coward. he's right hand man is directly involved in this mess.
5. McCain can't name names. They're funding his campaign. Also, low-income families may have been able to pay those high-risk loans if they had health insurance or a living wage, like Clinton had planned. Instead, Bush cut incomes, raised expenses, and suddenly those high-risk loans became unpayable.
6. McCain can never bring himself to say anything bad about Democrats. Thank God he chose Palin.
7. I like how republicans are working hard to run from what the republican congress did when Clinton was president. Is like they have spent more time making that story work than the one for 911.
8. The DEMS need to be EXPOSED!
9. I believe that there is a massive coverup between the political parties, Freddie Mac, and Fannie Mae that makes Enron look like a joke in comparison. In order to prevent this from coming out, the government (all parties) will do anything to appease these Wall Street big wigs, They will sacrifice the election, or will put the American taxpayer into many years of misery in order to force this bailout. Some Warren Buffet types will make a lot of money on this, while we buy a zillion garbage loans. Why is there such an urgent rush as if the world will end tomorrow. The stock market is reacting as if this is not such a doom and gllom situation. Yet McCain and Obama will do anything to force this monster down our throats. Economists are screaming that there are better alternatives. Yet Pelosi and Bush don't want to listen. America is a demoicracy in name only. This is communism in its purest form. At least in socialist countries such as Canada or France you get free healthcare and subsidized college tuition for your heavy taxes. Here you get to see CEOs grow richer on your expense.
10. Clinton was not smart putting home loans on the stock market. But it was the banks that got greedy. The gave people loans just so they could sell the as stock.
11. Unfortunately, when it comes to McCain he is less about politics and more about results. That is commendable in actually doing his job as Senator but it really sucks when he is running a campaign. Obviously, campaign time is politics time! *
12. Bravo, everything you have stated here is true. Key to unlocking the door is how do we get this out to those that will have the impact on this election once they have read this and other situations that tell basically the same story. This entire mess has Democrat written all over it. Has that dead human flesh smell that only they can wear like expensive perfume. There is not a damn thing that has not gone bad in DC in the last 60 years that doesn't have democrat written all over it. Department of Homeland Security needs to look at Charging Barney Franks, Chris Dodd, Nancy Pelosi, Harry Reid, and Barack Obama as co-conspirators to bring down the US enconmy for Personal and Political gain.
13. Brian is right, some minds are not open to the truth on this one. Forget them, it is the independents and the yet-to-be decisive people that will matter. I've heard rumors the McCain campaign is working carefully to package this message up and deliver it. The timing could not be more perfect, if his push is successful (and it should be, there's so much truth that distortions and lies aren't necessary) it will likely stick in the voter's minds until voting day.
14. MCCAIN IS TRYING TO TAKE A HIGHER ROAD BY TALKING ABOUT HOW TO FIX IT RATHER THAN POINT OUT HOW AND WHO ARE TO BLAME . THE PROBLEM IS THAT MOST PEOPLE HAVEN'T A CLUE AS TO THE FACT IT GOES BACK TO THE CLINTON YEARS ON ALL OUR CURRENT PROBLEMS . UNTIL EVERYONE UNDERSTANDS THAT IT WAS CLINTON MAKING THIS MESS----THEY WILL CONTINUE TO BLAME BUSH AND THE GOP .-----UNLESS THESE FACTS ARE BROUGHT OUT IT COULD COST MCCAIN THE ELECTION .