Wednesday, October 01, 2008

The Banking Crisis Explained

I’ve been very confused about this whole banking meltdown. The theory that it was caused by deregulation, lack of oversight, and outright greed makes a lot of sense to me.

Luckily, Stanley Kurtz of the NY Post is around to set me straight. You see, it turns out it wasn’t banking greed at all. The problem all along turned out to be community organizers and Barack Obama.

Community organizers intimidate banks into making high-risk loans to customers with poor credit.

In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes - and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers.

In other words, community organizers help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it.


You see, bankers aren’t interested in easy, short-term profit. They are just intimidated by the awesome power of those evil community organizers, who force them to give money to dark-skinned people. Another theory is that if bankers are to be blamed for anything, it is they have too soft of a heart for dark-skinned people.

I wonder if a better system would be to pay people with jobs enough money to be able to afford their own homes. That might be tricky, though, since there’s no difference between that and communism. I guess we should stick with the easy solution of blaming community organizers and Barack Obama. After all, the easy solution is always the right one.

7 comments:

Robert J. Day said...

If you want to research it for yourself here are the links. Please note that the articles are dated years before the current crisis and are reported by media outlets not exactly known as conservative friendly. You make up own own mind after you do the research.


http://www.americanthinker.com/blog/2008/09/memory_lane_lynching_franklin.html

http://hnn.us/articles/1849.html

http://www.fundinguniverse.com/company-histories/Fannie-Mae-Company-History.html\

http://www.ft.com/cms/s/0/e3e1d654-5288-11dd-9ba7-000077b07658,dwp_uuid=5db90a0e-4e6c-11dd-ba7c-000077b07658.html

http://online.wsj.com/article/SB122091796187012529.html?mod=googlenews_wsj

http://www.cnn.com/ALLPOLITICS/stories/1999/11/12/banking.reform/index.html

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

http://www.city-journal.org/html/10_1_the_trillion_dollar.html

http://findarticles.com/p/articles/mi_m1282/is_/ai_13699788

http://www.iht.com/articles/2006/11/26/bloomberg/bxwach.php

http://query.nytimes.com/gst/fullpage.html?res=9E0CE7DC1F30F932A05752C0A964958260

http://www.wsws.org/articles/1999/nov1999/bank-n01.shtml

http://www.freerepublic.com/focus/news/2087375/posts

http://clinton6.nara.gov/1993/12/1993-12-08-briefing-by-bentsen-and-rubin.text.html

http://boards.msn.com/MSNBCboards/thread.aspx?threadid=794229

http://www.courant.com/news/opinion/commentary/hc-commentaryhubbard0914.artsep14,0,5673162.story

http://www.sermonzone.com/blog/2008/09/22/fannie-mae-five-five-key-players-who-broke-the-system/

http://www.lynchreport.com/2008/09/getting-to-bottom-with-barney-frank.html

http://www.cato-at-liberty.org/2008/09/29/obamas-free-ride-on-fannie-mae/

http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html

http://www.nypost.com/seven/02052008/postopinion/opedcolumnists/the_real_scandal_243911.htm?page=0

PG said...

If I read all this, I have a feeling I still won't be able to convince the guy at the swimming pool yesterday who loudly brayed that we all had to call our congressmen to stop the bailout and to call Obama to demand he return the money he made from Fannie Mae and Freddie Mac.

PG said...

OK, so now I scanned some of the articles. Against all conventional wisdom, I'm thankful to be poor.

PG said...

OK, now I've read a few more of the articles. I'm not buying it. The "Faith and Facts" column that more specifically pinpoints Democrats to blame is dated Sept. 22, after the fall. Many of the others (Capital Eye) seem to be about relatively minor campaign moneys. But what is the point of affixing blame anyway? The system really doesn't work. And if the powers are so eager to nationalize (and socialize) the economy -- which does smell like a power grab of the most venal nightmare -- they should long ago have been willing to nationalize and socialize health care, too. The one good thing coming out of this is that Latin America, already on a path to increased nationalization, is watching and saying, we were right.

Dan S said...

Hey Robert,

I've read through a few of these, but mostly they seem to say that a program exists to lend money to minorities for housing.

Can you point me to where there is data that says this financial crisis is the result of that 30 year old program?

Robert Sievers said...

I know this to be true anecdotely. Someone I know who worked at a bank has told me in no uncertain terms some of the reason for the collapse was becasue the bank was required by the government to make risky loans. They worked hard to pawn them off on Freddie and Fannie to minimize damage. Was this the only reason? Surely not. But it must be taken into consideration.

Dan S said...

Well, I don't know about your banker friend, but apparently Sarah Palin disagreed during the debate:

PALIN: Darn right it was the predator lenders, who tried to talk Americans into thinking that it was smart to buy a $300,000 house if we could only afford a $100,000 house. There was deception there, and there was greed and there is corruption on Wall Street. And we need to stop that.

Again, John McCain and I, that commitment that we have made, and we're going to follow through on that, getting rid of that corruption.


And yes, this is tongue in cheek. :)

I'm guessing she has less knowledge of it than your banker friend. And quite possibly you and I as well. :)