Sometimes it is amusing to watch the schemes of the Socialists implode. Actually, it would be a lot more amusing if they would take the consequences of their own disasters, but what always happens is they have set things up so you and I get to pay the price for their insanity. So if you could step outside of the pain and failures, you could laugh. But as it is now, we can't step outside of the pain and failures because we are suffering the brink of economic disaster due to Socialists in government here and abroad. My continuing goal is to figure out how to get out of this mess and make the designers of the crises pay for their handiwork.
One of the more recent coups of the Fabian Socialists was the financial crisis of 2008. The mortgage implosion and derivatives debacle was the perfect moment for the Fabians to step in and get control of the United States economy. We are not yet out of this part of the financial crisis. I think the general public still cannot wrap their minds around what happened. The only wealth distribution that has happened is the American public has gotten soaked while the big money players such as Goldman Sachs, Hank Paulson, George Soros, etc. are rolling in wads of riches. Keep in mind as you read this that Bernie Madoff went to jail and has his assets stripped for defrauding the public with his financial schemes.
For a more extensive explanation of the mortgage crisis GO HERE to the American Spectator
BANK BAILOUTS, MY SHORT VERSION
THE SET UP
Long ago in the 1970's there was a misguided and economically ignorant President of the United States named Jimmy Carter. Being from the South and carrying around some kind of guilt over slavery, he was pushed by the Democrat Black Caucus to come up with some kind of national reparations. His genius answer to this was to invent something called the Community Reinvestment Act. The CRA used the force of government regulations to force banks into lending requirements for poor black neighborhoods and to give low mortgage rates to those poor blacks wanting loans. In order to make this palatable to the banks, Fannie Mae and Freddie Mac were set up as "affordable housing" lenders of more of the loans. The percentage of these loans required by the banks was kept somewhat small in the beginning, but nevertheless Federal regulations were forcing the banks to take on risky loans. The banks and Fannie and Freddie all had to take on the risks. Fannie and Freddie, by the way, are backed by our Treasury. So, for all intents and purposes, Jimmy Carter put you and me on the hook for these loans.
Flash forward to Bill Clinton, the "First American Black President." In order to put himself in favor of the blacks and, thereby get the black votes, Clinton put the CRA on steroids with regulations and had Fannie and Freddi underwriting the low income loans. Fannie and Freddie, between 2005 and 2007 bought $1 trillion worth of low income loans. Keep in mind that Fannie and Freddie are guaranteed by our taxes.
Where the banks are concerned, the Federal laws were drawn up so that the banks could not erect an ATM or merge with another bank or conduct normal business unless they complied with the Federal regulations of taking on high percentages of CRA loans. Force of federal law, all put in place so that Jimmy Carter could assuage his guilt complex plus buy black votes... and so Bill Clinton could buy black votes.
THROWING AROUND THE HOT POTATOES
Seeing the handwriting on the wall, the banks decided this was too much high risk debt to take on and the outcome would wreck their balance sheets for shareholders. Having legal fiduciary duty to their shareholders, the banks decided to bundle these loans with other loans and sell off these loans as derivatives to investment houses all over the world. Goldman Sachs was one of them. AIG, Lehman Brothers, and other huge financial investment firms were loaded up with these risky loans. (Evidently Lehman Brothers didn't play ball with the henchmen, so our government did not bail them out and off into investment purgatory they went.) Even with selling derivatives, the banks and Fannie and Freddie were, and still are, holding tons of these high risk CRA loans. The laws have not been reversed and the banks are still on the hook for taking on these loans. For this you can thank Barney Frank and Chris Dodd, the henchmen on the Banking Commitee in congress. Plus, the gutless politicians who are scared out of their wits to stop the CRA for fear of being called racist, bigoted pigs.
Meanwhile, short sellers and hedge-fund managers could see this as a disaster in the making, so in 2008 they started to sell off the risky loan derivatives to the tune of billions of dollars. The ones who made the sales, such as George Soros, made buckets of money. Voilá, instant money crisis in the U.S. Treasury, the banks were about to fail, and the big investment houses were screaming, so the economic power brokers of the United States jumped in and used our good names and bank accounts to bail out the banks and investment houses. In other words, they put you and me on the hook for bailing out the financial institutions which these same people put at risk with our money. The hot potato always lands in our laps while these government manipulators and profiteers go merrily skipping down the road with their sacks full of money. While they say the bailouts were loans and are being paid back by the offending parties..the laws have not been changed and the mortgage crisis continues today with more of the same policies.
I'm not sure there is one. Here we are almost three years later and the country is fuming over an economy that has been leveraged to 13 and a half trillion dollars of debt and a government that is completely out of control. There are many reasons for the Tea Party movement, but this financial / economic situation is one of the big ones.
The jig is up. More people now see the game that has been played and know that they were given a bum hand. But most Americans are still shaking their heads and wondering what in the heck happened. Most Americans are working their tails off while seeing their hopes for the future sent straight down the tubes.
The culprits are not being brought to justice. The culprits own the Justice Department and the Democrat Party, so how likely is it that they will investigate and put themselves on trial for demolishing the U.S. economy? NIL. NADA. ZIP. ZERO. And to be honest on this, George Bush saw the problem coming and did not or could not stop it. This implosion was not a huge surprise to those in power who knew the balance sheets.
This is not a tale of good intentions paving the road to hell. This is a tale of schemers who should have known better, probably did know better, and did it anyway. This is a story of Presidents who, out of purely selfish reasons, put our lives on the hook for their own political gains. Economic manslaughter? Premeditated economic destruction?
My big problem with this is that the American public is not to blame and should not pay the price of corrupt politicians. We deserve better than this. We deserve economic justice, and that does not mean wealth redistribution. It means just the opposite. It means fiduciary responsibility and asset based loan acquisitions. It means thieves pay for their thievery. It means the deliberate destruction of our economy should result in jail time, not just going forward, but retroactively against those who did it. It means charges of treason. And no one I know of has the courage to say that or do it.
The only hot potatoes I want would be sitting on my plate at dinner, smothered with butter and sour cream.