The Next Big Banned Word

You don’t have to be Frank Luntz or George Lakoff to know that linguistic framing matters a great deal in politics. Sometimes, however, nuance is in the eye of the beholder.

House Republicans unveiled their budget this week, an ambitious plan which balances the budget over 10 years and repeals Obamacare.

One word appears throughout the document, one which New Republic writer Elizabeth Stoker Bruenig believes should be “eliminated” because it subtly divides people into “makers and takers.”

The word? “Taxpayer.”

The word she believes should be used instead? “People.”

So Orwellian it hurts!

The New Republic’s Elizabeth Stoker Bruenig considers “taxpayer” an ideologically weighted term. A Conservative term, so it must therefore be evil.

In the 43-page budget, the word “taxpayer” and its permutations appear 24 times, as often as the word “people.”

It’s worthwhile to compare these usages, because the terms are, in a sense, rival ideas. While “people” designates the broadest possible public as the subject of a political project, “taxpayer” advances a considerably narrower vision—and that’s why we should eliminate it from political rhetoric and punditry.

Well, yes, “taxpayer” is a narrower term because not all people are taxpayers. But somehow that distinction is now deemed discriminatory.

…[T]axpayer terminology also seems to subtly promote the idea that a person’s share in our democratic governance should depend upon their contribution in taxes…Our share in democracy arises not from what we can pay into it, but from the fact that we are persons and personhood confers certain obligations and dues.

In both President Obama’s and the GOP’s budget proposals, the terms “taxpayer” and “taxpayer dollars” or variations thereof are used, referencing government’s responsibility to use the funds wisely and efficiently.

But even the fact that taxpayer dollars came from taxpayers and therefore taxpayers should be happy with how they are used is somehow a touchy issue:

If money owed in taxes is imagined, as in the budget plan … to belong to the taxpayer, then programs operating off of public revenue do seem to have some obligation to correspond to their funders’ consent, and serving the interests of others does seem unfair. But these are all obfuscations brought on by the term.

Bruenig ends with characterizing all who use the term “taxpayer” as “carrying political water.”

Orwell at it’s finest.

“It forgets that its financial resources come from hard-working American taxpayers who wake up every day, go to work, actively grow our economy and create real opportunity.” In other words, Americans’ taxes are parallel with taxpayers’ consent, suggesting that expenditures that do not correspond to an individual’s will are some kind of affront. The report goes on to argue that  food stamps, public housing assistance, and development grants are judged not on whether they achieve improved health and economic outcomes for the recipients or build a stronger community, but on the size of their budgets. It is time these programs focus on core functions and responsibilities, not just on financial resources. In so doing this budget respects hard-working taxpayers who want to ensure their tax dollars are spent wisely.

…[A]s the Republican authors of this budget know well, the beneficiaries of welfare programs tend to receive more in benefits than they pay in taxes, because they are in most cases low-income. The “taxpayers” this passage has in mind, therefore, don’t seem to be the recipients of these welfare programs, but rather those who imagine that they personally fund them. By this logic, the public is divided neatly into makers and takers, to borrow the parlance of last election’s Republicans…

 

…Public revenue is just that: a pool of public money to be used for the good of the public, not 300 million pools of private money each to be used to serve private individuals’ interests. What is in the interest of the public may involve expenditures that can’t be filed in a pay-in-cash-out formula, as the “taxpayer” terminology would suggest.

The she goes on to complain that this “formula” would be bad for kids, roads, utilities, ad nauseum because after all they are a “necessary social function” and “provides for the common good” and if we continue to use the ideologically conservative word “taxpayer” we will in due course steal candy from babies, destroy and neglect our children, old people, roads, bridges,environment etc. Hell will be let loose on earth!

We must ban any hot button conservative-leaning words that remind people where all this “free” money and “necessary social function” comes from.

We just want them to sit back and enjoy the fruits of our Socialist labor and not question where it came from.

Orwell could do no better.

Political Cartoons by Dana Summers
Political Cartoons by Steve Kelley
Political Cartoons by Bob Gorrell
Political Cartoons by Gary Varvel

The Fakevoer

Michael Ramirez Cartoon

Our dear President is out on the Campaign trail yet again, touting how great he is. And he saved America! Rejoice!

It’s Hope 2.0!

<<barf bag on standby>>

They passed a sweeping Financial Reform bill. But like the Health Care bill where one the biggest problems was totally ignored for political reasons, Tort Reform, in the Financial Reform bill, Fannie & Freddie and the shadow of the subprime mortgages still out there, was ignored.

The Democrats, who created this mess, want to ignore the 800 lb Gorilla Cancer in the body.

With good reason, they were the main force behind creating it!

You can’t talk about the housing crisis or reforms without talking about the affordable-housing goals HUD slapped on Fannie and Freddie. That is, unless you’re Tim Geithner.

The Treasury secretary hosted a summit Tuesday to discuss redesigning the mortgage-finance system — 75% of which is still controlled by Fannie and Freddie, which are still bleeding billions at taxpayer expense.

Geithner vowed to fundamentally “change” the failed government-sponsored mortgage giants. Yet, suspiciously, he didn’t offer how. Nor did he explain why they lowered their underwriting standards and collapsed under the weight of subprime loans and securities. So here’s a refresher:

• In 1996, as part of Clinton housing policy, HUD required that 42% of Fannie’s and Freddie’s mortgage financing go to “underserved” borrowers with unproven or damaged credit.

• To help them meet that goal, HUD, their regulator, authorized them to relax their lending criteria.

• HUD also authorized them to buy subprime securities that included loans to uncreditworthy borrowers.

• Unhappy with the results — despite Fannie and Freddie committing trillions in risky low-income loans — HUD in 2000 raised its affordable-housing target again, this time to 50%.

• By 2008, HUD’s target had topped out at 56%. And Fannie and Freddie had drowned in a toxic soup of bad subprime paper.

HUD Secretary Shaun Donovan insists that affordable-housing goals aren’t to blame. “We should be careful not to learn the wrong lesson from this experience,” he said, “and sacrifice an important feature of the current system: wide access to mortgage credit.”

This is revisionist history. Fannie and Freddie e-mails confirm that executives then were under huge pressure to meet “HUD goals.”

But as Orwell warned, whoever controls the present controls the past. And right now, the people who pushed Fannie and Freddie — along with our entire financial system — off the cliff in the name of “affordable housing” are running the show.

Just look at some of the experts Geithner invited to his Potemkin summit. Like ex-Clinton aide Ellen Seidman, who became head of the Office of Thrift Supervision. She aggressively enforced Clinton’s beefed-up Community Reinvestment Act, which codified the “flexible” underwriting that Fannie and Freddie adopted.

You can’t talk about the housing crisis or reforms without talking about the affordable-housing goals HUD slapped on Fannie and Freddie. That is, unless you’re Tim Geithner.

The Treasury secretary hosted a summit Tuesday to discuss redesigning the mortgage-finance system — 75% of which is still controlled by Fannie and Freddie, which are still bleeding billions at taxpayer expense.

Geithner vowed to fundamentally “change” the failed government-sponsored mortgage giants. Yet, suspiciously, he didn’t offer how. Nor did he explain why they lowered their underwriting standards and collapsed under the weight of subprime loans and securities. So here’s a refresher:

• In 1996, as part of Clinton housing policy, HUD required that 42% of Fannie’s and Freddie’s mortgage financing go to “underserved” borrowers with unproven or damaged credit.

• To help them meet that goal, HUD, their regulator, authorized them to relax their lending criteria.

• HUD also authorized them to buy subprime securities that included loans to uncreditworthy borrowers.

• Unhappy with the results — despite Fannie and Freddie committing trillions in risky low-income loans — HUD in 2000 raised its affordable-housing target again, this time to 50%.

• By 2008, HUD’s target had topped out at 56%. And Fannie and Freddie had drowned in a toxic soup of bad subprime paper.

HUD Secretary Shaun Donovan insists that affordable-housing goals aren’t to blame. “We should be careful not to learn the wrong lesson from this experience,” he said, “and sacrifice an important feature of the current system: wide access to mortgage credit.”

This is revisionist history. Fannie and Freddie e-mails confirm that executives then were under huge pressure to meet “HUD goals.”

But as Orwell warned, whoever controls the present controls the past. And right now, the people who pushed Fannie and Freddie — along with our entire financial system — off the cliff in the name of “affordable housing” are running the show.

Just look at some of the experts Geithner invited to his Potemkin summit. Like ex-Clinton aide Ellen Seidman, who became head of the Office of Thrift Supervision. She aggressively enforced Clinton’s beefed-up Community Reinvestment Act, which codified the “flexible” underwriting that Fannie and Freddie adopted.

Seidman argued that Fannie’s and Freddie’s support for “low-income and minority communities” — especially now amid a wave of foreclosures — is “absolutely critical.” She wants government to take an even larger role in pushing housing for “underserved markets.”

The “underserved” were the poor, and minorities, that couldn’t pay them anyhow. But what the hell, if you can get a million dollar house with a multi-thousand dollar mortgage and a job at 7-11 for nothing down, why not. 🙂

Let’s buy some votes. Then when it all blows up in our face, blame it on “the rich” and George W. Bush!!

Yeah, that’s the ticket!! 🙂

Comment on the article: It’s simple! Underserved means undeserved but we will give it to you anyway in exchange for your vote. Problem is it works, for the short term but with h*** to pay in the long term.

Seidman argued that Fannie’s and Freddie’s support for “low-income and minority communities” — especially now amid a wave of foreclosures — is “absolutely critical.” She wants government to take an even larger role in pushing housing for “underserved markets.”

“The private sector will not do it on its own,” Seidman said, “and we should just stop having that debate.”

Excuse us, but homes aren’t a right. People who lost their homes can go back to renting. There’s no shame in that. The shame came when government pushed them into homes they couldn’t afford. And the housing bubble it created hurt everybody in the end.

Echoing Seidman, Geithner asserted that whatever replaces Fannie and Freddie must continue to “provide access to affordable housing for lower-income Americans” and to guarantee loans.

In other words, Fannie and Freddie aren’t going anywhere. They’ll just be absorbed into the government, most likely Treasury or HUD, or both.

Why must taxpayers continue subsidizing homeownership through a government-guaranteed secondary mortgage market run by a government-protected duopoly?

Within the proper framework, we’re confident that private firms can originate and securitize mortgages more efficiently — and do so without the politically injected risk or taxpayer liability.

Wells Fargo, for one, would gradually replace Freddie and Fannie with private “mortgage conduits” that buy loans on the primary market and roll them into a common mortgage-backed security.

They’d assume the risk on the underlying mortgages, while the government would guarantee only the MBSes. To protect taxpayers, the conduits would pay into an insurance fund.

The plan maximizes the use of private capital while limiting Washington’s role to assuming catastrophic risk.

Other charter privileges enjoyed by Fannie and Freddie would be eliminated, including their Treasury line of credit, state and local tax exemptions, and weak capital requirements.

Above all, the plan would curb HUD’s interference in the mortgage market. No more unrealistically high affordable-housing goals. No more NINJA — no income, no job or assets — loans.

After years of dissembling and denial, Rep. Barney Frank has finally come out. He now says bankrupt government mortgage giants Fannie Mae and Freddie Mac “should be abolished.” Better late than never.

‘There were people in this society who for economic and, frankly, social reasons can’t and shouldn’t be homeowners,” Frank said in an interview with the Fox Business Network and sounding a lot more like an elephant than a donkey. “I think we should, particularly, stop this assumption that you put everybody into homeownership.”

After years of blaming heartless Republicans and Wall Street for the crisis caused by Fannie Mae and Freddie Mac — and their predominantly Democratic supporters in Congress — it’s refreshing to hear a member of the Democratic Party admit his mistakes.

It’s especially true of Frank, who, more than any other elected official, championed the cause of the government-sponsored enterprises Fannie Mae and Freddie Mac. Indeed, Frank is most responsible for stopping GSE reform in the early 2000s, at a time when such a move might have prevented the financial meltdown.

Maybe Frank, like so many others in his party, is feeling the heat in this November’s election. Democrats’ popularity is plunging after years of economic incompetence that has left America’s once-thriving economy a shambles.

But give him his due: Frank’s comments mark a major departure.

In 2000, when Rep. Richard Baker proposed more oversight for the GSEs, Frank called concerns about Fannie and Freddie “overblown,” claiming there was “no federal liability whatsoever.”

In 2002, again, Frank said: “I do not regard Fannie Mae and Freddie Mac as problems. I regard them as assets.”

In 2003, he repeated himself in opposing reform, saying he did not “regard Fannie Mae and Freddie Mac as problems.”

Even after a multibillion dollar accounting scandal hit Freddie Mac just a month after those remarks, Frank insisted nothing was wrong. “I do not think we are facing any kind of crisis,” he said.

By 2004, Fannie had its own accounting scandal. Frank again insisted it posed no threat to the U.S. Treasury. Even if the two went belly-up, he said, “I think Wall Street will get over it.”

Of course, he had it exactly backward. We’ve already spent $148 billion of taxpayer money on the two losers. The Congressional Budget Office estimates it will ultimately cost taxpayers $389 billion to bail them out. Even that may be too little; at least one private estimate put the final toll at $1 trillion.

No surprise here. Even today, more than half of all mortgages are funded or underwritten by Fannie and Freddie. They hold more than $5 trillion of the $10.7 trillion or so in total U.S. mortgages.

We’ve spent a lot of money for Barney Frank’s education in financial reality. Today, he’s basically saying he and his party were wrong all along.

That’s a good start. But how about an apology? Or even a frank admission that his party’s indefatigable support of Fannie and Freddie — which, prodded by the Community Reinvestment Act, created and funded the massive subprime market that later collapsed — was to blame for our multitrillion dollar meltdown and the loss of millions of jobs?

Others are edging in that direction. Treasury Secretary Tim Geithner this week held a conference on Fannie’s and Freddie’s future, and he too seems chastened. “We will not support returning Fannie and Freddie to the role they played before conservatorship, where they fought to take market share from private competitors while enjoying the privilege of government support,” he said.

That, too, is good to hear. As we have advocated for years — since 1996, to be exact — Fannie and Freddie should be dismantled or privatized.

We hope actions match the rhetoric — that Geithner’s “conference” on Fannie and Freddie wasn’t just political window dressing before November’s midterm elections.

Let’s get government out of the business of encouraging homeownership, an undertaking at which it has failed miserably.

Now that the idea is dead, let’s bury it once and for all.

As late as 2008, after the tide of losses and foreclosures washed away Fannie’s and Freddie’s remaining capital, Frank was adamant that it was all Wall Street’s fault: “The private sector got us into this mess … the government has to get us out of it.” (IBD)

But dear, Barney, it was thy.

“Slowly but surely, we are moving in the right direction. We’re on the right track,” Obama told a group of about 40 in the backyard of Rhonda and Joe Weithman’s home, a Cape Cod on quiet E. Kanawha Avenue in Clintonville,OH. “After 18 months, I have never been more confident that our nation is headed in the right direction,” Obama said.

Rasmussen:  Twenty-eight percent (28%) of Likely Voters say the country is heading in the right direction, according to a new Rasmussen Reports national telephone survey taken the week ending Sunday, August 15.

While down slightly from the last two weeks, confidence in the nation’s current course has ranged from 27% to 35% since last July. Following Congress’ passage of the national health care bill in late March, the number of voters who said the country was heading in the right direction peaked at 35%, the highest level of optimism measured since early September 2009.

Fifty-four percent (54%) of Democrats feel the country is heading in the right direction. Eighty-eight percent (88%) of Republicans and 77% of voters not affiliated with either political party feel the country is heading down the wrong track.

Sixty-seven percent (67%) of all voters say the country is heading down the wrong track, up two points from last week.

So let’s review: 60+% are against the Health Care Bill. 60+% are for a secure border. 60+% are against the Ground Zero Mosque. 60+% are saying we are on the “wrong track”.

Sixty percent (60%) of U.S. voters say most members of Congress don’t care what their constituents think, according to a new Rasmussen Reports national telephone survey.

So that’s why Democrats think they are doing a good job! 🙂

After all, your alternative is…<cue evil organ music> REPUBLICANS! <<dramatic music sting>> and we all know that is the way to Hell itself! 🙂

Personally, I’d rather just have Conservatives. Which leaves out Democrats anyhow but also leaves out the RINOs.

What we don’t need now is to go from a Progressive Cancer to a RINO Virus.

But we really don’t need is more government “involvement”. 😦

Get your Fannie and Freddie Here

The Obama administration says it wants to “reform” Fannie and Freddie. But it won’t propose legislation to revamp the mortgage companies until next year, if even then. And in testimony last week, HUD Secretary Shaun Donovan circled the wagons around the “affordable housing mandates” that pushed Fannie and Freddie into the risky subprime market.

“As we work to reform our housing finance system, it is essential to keep in mind our broader housing policy goals,” he said. “A reformed housing finance system should ensure broad access to mortgage credit for minorities.” Here we go again.

Fannie and Freddie over the decades have facilitated “an important democratization of credit,” Donovan said. Yes, and they’re now hit hardest by foreclosures from this failed social experiment.

Never mind that. Donovan asserted that “ensuring that homeownership opportunities are available to members of these communities should remain a priority.”

aka “poor” and “minority” (aka Democrats)

It’s plain that Donovan, like other housing-rights activists, has not learned any lessons from the subprime scandal. He’s also in denial about HUD’s role in it, arguing that the affordable housing goals it foisted on Fannie and Freddie were not the cause of their collapse.

Rather, he claims, the mortgage giants underwrote risky subprime loans and securities simply to increase profits.

But officials with both firms swear their hands were forced by HUD. They testified they had to lower their underwriting standards and absorb substantial costs to meet HUD’s political mandates. That, of course, is no way to make a profit.

In fact, HUD in 2000 required Fannie and Freddie to underwrite fully half of their mortgages for lower-income, higher-risk borrowers — a quota that remained in effect for the rest of the decade.

Starting in 1997, Fannie began offering a 97% loan-to-value mortgage — well above the standard 80% LTV. And by 2001, it was offering mortgages with no down payment at all, along with other deficiencies.

The promised reforms of these failed government-sponsored enterprises are a farce. Democrats are not going to relinquish control of Fannie and Freddie. They’ll remain wholly owned subsidiaries of the Democratic Party.

The federal government — which shouldn’t be involved in the mortgage business at all — now controls virtually 100% of the secondary mortgage market. This is outrageous considering the government caused the failure of Fannie and Freddie, not the market.

If the government owns Fannie and Freddie, politicians will run it for their political clients, not shareholders, like their own personal piggy banks.

You mean like the IOU’s in Social Security?

Nah, they’d never do that… 🙂

And use control of this industry for their own gain, nah, Democrats would never ever do that… 🙂

There motives are as pure as the driven snow… 🙂

The government own car companies GM and Chrysler.

It owns an Insurance giant AIG.

It owns the secondary Mortgage Market.

It wants to own Health Insurance through it’s slow acting poison of a Health Care Reform Bill.

But their not socialists…. 🙂

Next Up, Wall Street and Energy…

But their not socialists….

The government used the congressionally chartered mortgage giants — who together control over half of all mortgages — for political purposes, such as helping questionable low-income borrowers and boosting minority homeownership.

As a result, they made bad economic decisions that sank the entire mortgage industry, destroyed homeowner equity and cost taxpayers $400 billion (and counting). (IBD)

The damage from the politically motivate Health Care may not be known for years. Just like the manipulations of the Mortgage market started in the 1990s and took over 10 years to crash.

But remember, according to them it wasn’t their fault. They regulated it into failure, but it wasn’t their fault.

It was Wall Street . Those damn evil capitalist and their derivatives.

And just when Obama and Co want to pass sweeping new reforms.

Funny how that worked out.

“Never let a serious crisis go to waste…it’s an opportunity to do things you couldn’t do before.” – Chief of Staff Rahm Emmanuel

Even if you have to lay it on your opponent first. Then claim it’s a crisis.

It’s their fault!

Boo Hiss! Boo!!  🙂

Alinsky Rule 11: Pick the target, freeze it, personalize it, polarize it. Don’t try to attack abstract corporations or bureaucracies. Identify a responsible individual. Ignore attempts to shift or spread the blame.

Hmmm…Like, to you for instance…

The Bottomless Pit

Dec. 31 (Bloomberg) — Taxpayer losses from supporting Fannie Mae and Freddie Mac will top $400 billion, according to Peter Wallison, a former general counsel at the Treasury who is now a fellow at the American Enterprise Institute.

“The situation is they are losing gobs of money, up to $400 billion in mortgages,” Wallison said in a Bloomberg Television interview. The Treasury Department recognized last week that losses will be more than $400 billion when it raised its limit on federal support for the two government-sponsored enterprises, he said.

The U.S. seized the two mortgage financiers in 2008 as the government struggled to prevent a meltdown of the financial system. The debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks grew an average of $184 billion annually from 1998 to 2008, helping fuel a bubble that drove home prices up by 107 percent between 2000 and mid-2006, according to the S&P/Case- Shiller home-price index.

The Treasury said on Dec. 24 it would provide an unlimited amount of assistance to the companies as needed for the next three years to alleviate market concern that the government lifeline for Fannie Mae and Freddie Mac, the largest source of money for U.S. home loans, could lapse or be exhausted.

Lax regulation of Fannie Mae and Freddie Mac led to the mortgage companies taking on too many risky loans, Wallison said.

“It turns out it was impossible to regulate them,” he said. “They were too powerful.” He said no one knows how much will be needed to keep the companies solvent.

From 1990 to 1999, Wallison served on the board of directors of MGIC Investment Corp., the largest U.S. mortgage insurer, including a stint on the audit committee, according to Bloomberg data and company filings.

The continued government support of Fannie Mae and Freddie Mac makes buying their debt a good investment, Wallison said.

“It was always safe to buy these notes,” he said. The U.S. government was always going to stand behind them. They’re as good as Treasury notes.”

Then there’s Rep. Barney Frank’s (D)  “Financial Reform” legislation:

Here are some of the nuggets I gleaned from days spent reading Frank’s handiwork:

— For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system. Admitting you have a problem, as any 12- stepper knows, is the crucial first step toward recovery.

— Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.

— Oh, hold on, the Federal Reserve and Treasury Secretary can’t authorize these funds unless “there is at least a 99 percent likelihood that all funds and interest will be paid back.” Too bad the same models used to foresee the housing meltdown probably will be used to predict this likelihood as well.

More Bailouts

— The bill also allows the government, in a crisis, to back financial firms’ debts. Bondholders can sleep easy — there are more bailouts to come.

— The legislation does create a council of regulators to spot risks to the financial system and big financial firms. Unfortunately this group is made up of folks who missed the problems that led to the current crisis.

— Don’t worry, this time regulators will have better tools. Six months after being created, the council will report to Congress on “whether setting up an electronic database” would be a help. Maybe they’ll even get to use that Internet thingy.

— This group, among its many powers, can restrict the ability of a financial firm to trade for its own account. Perhaps this section should be entitled, “Yes, Goldman Sachs Group Inc., we’re looking at you.”

Managing Bonuses

— The bill also allows regulators to “prohibit any incentive-based payment arrangement.” In other words, banker bonuses are still in play. Maybe Bank of America Corp. and Citigroup Inc. shouldn’t have rushed to pay back Troubled Asset Relief Program funds.

— The bill kills the Office of Thrift Supervision, a toothless watchdog. Well, kill may be too strong a word. That agency and its employees will be folded into the Office of the Comptroller of the Currency. Further proof that government never really disappears.

— Since Congress isn’t cutting jobs, why not add a few more. The bill calls for more than a dozen agencies to create a position called “Director of Minority and Women Inclusion.” People in these new posts will be presidential appointees. I thought too-big-to-fail banks were the pressing issue. Turns out it’s diversity, and patronage.

— Not that the House is entirely sure of what the issues are, at least judging by the two dozen or so studies the bill authorizes. About a quarter of them relate to credit-rating companies, an area in which the legislation falls short of meaningful change. Sadly, these studies don’t tackle tough questions like whether we should just do away with ratings altogether. Here’s a tip: Do the studies, then write the legislation.

Consumer Protection

— The bill isn’t all bad, though. It creates a new Consumer Financial Protection Agency, the brainchild of Elizabeth Warren, currently head of a panel overseeing TARP. And the first director gets the cool job of designing a seal for the new agency. My suggestion: Warren riding a fiery chariot while hurling lightning bolts at Federal Reserve Chairman Ben Bernanke.

— Best of all, the bill contains a provision that, in the event of another government request for emergency aid to prop up the financial system, debate in Congress be limited to just 10 hours. Anything that can get Congress to shut up can’t be all bad.

Even better would be if legislators actually tackle the real issues stemming from the financial crisis, end bailouts and, for the sake of my eyes, write far, far shorter bills.(David Reilly is a Bloomberg News columnist. The opinions expressed are his own.)

So did it happen, you speculate. Well here is a report synopsis:

The analysis details how powerful Democrats in Congress insisted that government-subsidized housing be geared to serve the purposes of social justice at the expense of sound lending.

Here are some highlights of  Rep. Issa’s blow-by-blow account as reported by IBD July 10,2009:

• With an implicit subsidy to American homeowners in the form of reduced mortgage rates, Fannie Mae and its sister government sponsored enterprise, Freddie Mac, squeezed out their competition and cornered the secondary mortgage market. They took advantage of a $2.25 billion line of credit from the U.S. Treasury.

Congress, by statute, allowed them to operate with much lower capital requirements than private-sector competitors. They “used their congressionally-granted advantages to leverage themselves in excess of 70-to-1.”

*** Sound like the “Health Care Exchanges” anyone? Anyone?? 🙂

The two GSEs (government-sponsored enterprises) were the only publicly traded corporations exempt from SEC oversight. All their securities carried an implicit AAA rating regardless of the quality of the mortgages.

• The Department of Housing and Urban Development set quotas for GSE investment in affordable housing.

Encouraged by an inaccurate 1992 Boston Federal Reserve Bank study charging racial discrimination in mortgage lending, the two GSEs were strongly pressured to “lower their underwriting standards, particularly on the size of down payments and the credit quality of borrowers.”

• In 1992, Congress directed HUD to establish multiple quotas requiring mortgage quotes for low-income families.

In 1995, the Clinton administration issued a National Homeownership Strategy, loosening Fannie and Freddie’s lending standards and insisting that lenders “work collaboratively to reduce homebuyer downpayment requirements.”

• The administration complained that in 1989 only 7% of mortgages had less than a 10% downpayment. By 1994, it wanted that raised to 29%.

Reduced underwriting standards spread into the entire U.S. mortgage market to those at all income levels.

A complete decoupling of home prices from Americans’ income fed the growth of the housing bubble as borrowers made smaller down payments and took on higher debt.

• Wall Street firms specializing “in packaging and investing in the lowest-quality tranches of mortgage-backed securities, profited hugely from the increased volume that government affordable lending policies sparked.”

Wall Street firms, homebuilders and the GSEs used money, power and influence to block attempts at reform. Between 1998 and 2008, Fannie and Freddie spent over $176 million on lobbyists.

In 2006, Freddie paid the largest fine in Federal Election Commission history for improperly using corporate resources to hold 85 fundraisers for congressmen, raising a total of $1.7 million.

As the Issa report points out, “the real tragedy of the government’s affordable housing policy is the impact on average Americans, particularly those of modest means.

“Millions of these borrowers, who were supposed to have been helped by federal affordable housing policy, have now been forced into delinquency and foreclosure, destroying their asset base, their credit, and in some cases their families.”

And isn’t nice they learn from their mistakes. 🙂

“Everyone in this room knows what will happen if we do nothing. Our deficit will grow. More families will go bankrupt. More businesses will close. More Americans will lose their coverage when they are sick and need it most. And more will die as a result.”–President Obama

The Congress has to vote on Jan 20th to raise the Debt ceiling yet again. As if  $12,400,000,000,000 wasn’t enough.

And we still have Cap & trade.

Health Care “reform”.

Amnesty.

A “Jobs” Bill

And 2010 re-election Bribes.

Isn’t it comforting to know the Government has your back? 🙂

The Death by a Thousand tiny pinpricks.