The growing government hand – looking back

M. Jay Wells at American Thinker has put together a time line wrapping together – year by year – how the mortgage crisis happened. It’s a long post, but worth your time this Sunday morning.

The piece outlines choices made by our elected leaders – and influence by organizations like ACORN – going back to FDR’s New Deal in the 1930s. That’s right, it all started 75 years ago.

{Crossposted at RadioViceOnline}

Wells put some serious effort into the time line, and conservatives should thank him. Again, his post – like my post on the case against Obama – is long, but even high school classes are at least 55 minutes. You can not absorb good information in 15 second sound bites. Nothing can be explained with a sound bite.

His chat with a Toledo, Ohio, plumber showcases his socialist, redistributionist ideology:

“It’s not that I want to punish your success. I just want to make sure that everybody who is behind you, that they’ve got a chance for success too. . . . I think when you spread the wealth around, it’s good for everybody.” …

Contrary to the Obama narrative, however, it is not free-market capitalism at the root of the current mortgage industry crisis, but rather the very socialism Obama hawks. The historical record makes this fact unmistakably clear.

Here’s just a few examples from the time line, read the entire post.

President Franklin D. Roosevelt initiated a series of “New Deal” reform programs designed to affect the mortgage market and homeownership. Fannie Mae, the Federal National Mortgage Association, was established to facilitate liquidity among lending institutions.

As part of President Johnson’s Great Society reform plan, much of Fannie Mae became a private owned yet government chartered company, a government sponsored enterprise (GSE) providing authority to issue mortgage-backed securities (MBS). Fannie Mae buys home mortgages in order to preserve liquidity in the secondary mortgage market. Though private, it remained backed by the Federal government.

President Nixon chartered Freddie Mac, the Federal Home Loan Mortgage Corporation, as a GSE to compete with Fannie Mae. Designed to help grow the secondary mortgage market, Freddie Mac purchases mortgages from lending institutions to either be securitized as MBS and sold in the secondary market or held by Freddie Mac. At this time the secondary market for conventional mortgages was small.

Sen. Proxmire (D-Wisconsin) introduced a “creeping socialism” community reinvestment Senate bill. Opponents argued the bill would allocate credit without regard for merits of loan applications, thereby threatening depository institutions. Proponents countered that it was only to ensure that lenders did not ignore good borrowing prospects in their communities. The bill’s sponsor stressed it would neither force high-risk lending nor substitute the views of regulators or those of banks.

President Carter, pressed by grassroots organizations — though opposed by the banking industry, signed into law the Community Reinvestment Act (CRA). In the years following the Act has undergone several revisions.

July 1994
Represented by Obama and others, Plaintiffs filed a class action lawsuit alleging that Citibank had “intentionally discriminated against the Plaintiffs on the basis of race with respect to a credit transaction,” calling their action “racial discrimination and discriminatory redlining practices.”

That’s just the beginning, do read the full post.

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