Funny thing about Liberals:
They can be very successful in their chosen fields, on top of their game.
But when it comes to political reality, they often become deaf.
Dumb, as in “stupid.”
Not too long ago, I ran into an acquaintance. A Manhattan Liberal, a psychologist, with a Ph.D. from one of the top schools in the country. Very successful career.
After exchanging pleasantries, I got down to business. (She voted for Bronco ‘Bama, twice, and I cannot let that go.)
“Hey,” I said, “your Preezy is doing a real bang up job! Unemployment is up! Woo hoo!”
She was quiet for a minute. Then she responded, “It’s not his fault. It’s…”
I jumped right in. “OMG! Are you really going to say ‘Bush’s fault’ ?? You Libs all sound like a broken record.”
“No, I was going to say it’s greedy Wall Street and the bankers that got us into this mess. With their lies about cheap mortgages. That started the whole financial crisis.”
Well, I thought, this will be easy enough. Clearly, she just needs a bit more information to straighten things out. I told her that it was her “wonderful” Clinton who really started this mess, by forcing the banks to give mortgages to low-income, unqualified buyers, with the Community Reinvestment Act.
She was quiet for a minute. “Ah,” I thought, “I have piqued her interest. She must be mulling over this new piece of information.”
“As I said, it was the greedy bankers who caused the financial crisis,” she repeated.
(The rest of the conversation went downhill from there.)
I was thinking of this incident a few days ago, when two articles caught my eye:
via Investor’s Business Daily: Administration Memo Shows Again That Housing Crisis Was Caused by Government
Housing Crisis: The left has long maintained the financial meltdown was a result of greedy bankers fraudulently pushing bad loans on ignorant borrowers. Now, quietly, the administration has admitted that this isn’t true.
The story goes this way: Back in the mid-2000s, greedy, evil bankers around the country and on Wall Street wanted to squeeze even more profits from customers, so they created a raft of newfangled, confusing mortgage loans that took advantage of naive borrowers with high interest rates and hard-to-read loan agreements.
Then, when dangerously overburdened borrowers couldn’t pay, the heartless bankers foreclosed on them.
During last year’s campaign, the White House made much of this, announcing a major mortgage fraud crackdown to punish those who were responsible.
The so-called Distressed Homeowner Initiative fit perfectly with administration rhetoric that accused Wall Street of complicity in, and indeed responsibility for, the financial meltdown and economic stagnation that followed.
In October 2012, just a month before the election, Attorney General Eric Holder used a press conference to claim the administration had charged 530 defendants for causing $1 billion in losses to 73,000 borrowers.
Powerful stuff. Only it wasn’t true.
A memo that the Justice Department, without fanfare, placed on its official government Website admits the real fraud was the administration’s claim in the heat of the presidential campaign.
Sorry, the memo says, but we charged 107 people, not 530; victims numbered 17,185, not 73,000; and the amount lost was $95 million — about the cost of President Obama’s African vacation in June — not $1 billion.
In short, it was as close to a fabrication as one could get. The whole anti-fraud effort netted just a few culprits, and a minuscule number of victims.
This shocking admission underscores the Big Lie that undergirds the left’s anti-Wall Street and anti-bank rhetoric, a staple of the Occupy Wall Street movement that used it to whip up support for Obama in 2012….
via The Wall Street Journal: The Clinton-Era Roots of the Financial Crisis
(The article can be read in full via American Enterprise Institute)
Simply put, the financial crisis of 2008 was caused by a lot of banks making a lot of loans to a lot of people who either could not or would not pay the money back. But this explanation raises two key questions. Why did private lenders, whose job it was to assess credit risk, make those loans? And why did the army of financial regulators, with massive enforcement powers, allow 28 million high-risk loans to be made?
There’s a strong case that the answers can be traced to Sept. 12, 1992. On that day presidential candidate Bill Clinton proposed, in his campaign book “Putting People First,” using private pension funds to “invest” in government priorities, such as affordable housing, to “generate long-term, broad based economic benefits.” Seldom has such a radical proposal been so ignored during a campaign only to later lead to such devastating consequences.
After his election, President Clinton tapped Labor Secretary Robert Reich to lead the effort to extract, as Mr. Reich put it in 1994 congressional testimony, “social, ancillary, economic benefits” from private pension investments. Mr. Reich called on pension funds to join the administration’s “Economically Targeted Investment” effort. Housing and Urban Development Secretary Henry Cisneros assured participants that “pension investments in affordable housing are as safe as pension investments in stocks and bonds.”
….The Clinton administration lost the battle to use pensions to fund low-income housing, but it succeeded in winning the war by drafting Fannie Mae, Freddie Mac and the commercial banking system into the affordable-housing effort. It did so by exploiting a minor provision in a 1977 housing bill, the Community Reinvestment Act, that simply required banks to meet local credit needs.
Bank regulators began to pressure banks to make subprime loans. Guidelines became mandates as each bank was assigned a letter grade on CRA loans. Banks could not even open ATMs or branches, much less acquire another bank, without a passing grade—and getting a passing grade was no longer about meeting local credit needs. As then-Federal Reserve Chairman Alan Greenspan testified to Congress in 2008, “the early stages of the subprime [mortgage] market . . . essentially emerged out of the CRA.”
….It is stunning that, to this day, no one has explained how 28 million high-risk loans (the number calculated by the American Enterprise Institute’s Peter Wallison) got around the “safety and soundness” rules that dominate federal and state banking laws. What happened to the enforcement army, with its laws and regulations, its power to investigate and mandate corrective action, and its ability to fine and imprison violators?
The people who destroyed lending standards by driving subprime lending blamed banks, greed and deregulation for causing the financial crisis. But a review of the banking laws adopted since 1980 reveals that not one single safety and soundness measure was repealed….
I was thinking of sending these two articles to the Manhattan Liberal acquaintance.
But she probably would not read them.
Because, as I said, when faced with political reality, Libs often become deaf.
And dumb. As in “stupid.”
And, unfortunately, very often, they also become blind.
via Investor’s Business Daily: Obama Ignores Success of Tax Cuts, Gets History Wrong