Fannie and Freddie and the Economic Collapse

The Democrats try to keep the conversation away from this fact that it was their "good intentions" that caused the economic collapse we've experienced in 2008.  But facts are facts and here are some of them.








The Overview

The financial collapse which led to our present enervating recession was the housing collapse and bank failures. Toxic mortgages, foreclosure crisis, Mr. Fix-It bailouts -- the entire sorry tale is one of Democrat failures.

It starts with Jimmy Carter and his COMMUNITY REINVESTMENT ACT, by which the heavy hand of government "encouraged" banks to loan to marginal borrowers.

That push was ramped up under Bill Clinton. Clinton's HUD Secretary, Andrew Cuomo who created regulations which FORCED THE GOVERNMENT-SPONSORED MORTGAGE ENTITIES FANNIE MAE AND FREDDIE MAC TO STEP UP LOANS TO MINORITIES.

Clinton's Treasury Secretary was Democrat Robert Rubin, aided by Democrat Lawrence Summers, now on the Obama economic team. Rubin and Summers honchoed the effort to REPEAL THE DEPRESSION ERA GLASS-STEAGALL ACT, allowing investment banks to use federally insured depositor cash to back millions of mortgages while easing underwriting standards at the same time. No money down? No problem.

In addition, Rubin pushed through the COMMODITY FUTURES MODERNIZATION ACT, which allowed the creation of mortgage-backed securities. Liar loans packaged as investments and sold to pension funds.

Democrats in the NEW YORK STATE INSURANCE REGULATORS ALLOWED AIG TO INSURE MORTGAGE-BACKED SECURITIES with an invention known as the Credit Default Swap.

Democrats blocked reform of Fannie and Freddie. In 2003 when Republicans ran D.C. they pushed for HR2575 -- the SECONDARY MORTGAGE MARKET INTERPRISES REGULATORY IMPROVEMENT ACT, which would have strengthened an independent regulator for the government-backed mortgage giants Fannie and Freddie.

The Democrats used cloture rules to keep the act from moving to a vote in the Republican-controlled Senate.

When the Democrats came back in control in 2006 eighteen attempts by George W. Bush and John McCain to prod the Democrat-controlled Congress to exert control over Fannie and Freddie were rejected summarily by Democrats.

Quotes by Democrats about Fannie and Freddie

· "I don't think we face a crisis, I don't think that we have an impending disaster... Fannie Mae and Freddie Mac do very good work and THEY ARE NOT ENDANGERING THE FISCAL HEALTH OF THIS COUNTRY." Barney Frank

"THESE GSE'S HAVE MORE THAN ADEQUATE CAPITAL FOR THE BUSINESS THEY ARE IN: providing affordable housing... We should not be making radical or fundamental change. If there is anything to fix or improve, it is the (regulators)." Maxine Waters

"I am just pissed off at (the regulators) because if it wasn't for you I don't think that we would be here in the first place." "I think there HAS BEEN NOTHING THAT WAS INDICATED IS WRONG, YOU KNOW, WITH FANNIE MAE...the question that then presents is the competence of your agency has with reference to deciding and regulating these GSE's." Gregory Meeks D-NY

"Clearly, the MISSION OF FREDDIE MAC AND ESPECIALLY FANNIE MAE IS TO CLOSE THAT GAP." David Scott on the question of minority homeownership lagging behind whites.

"THESE ASSETS ARE SO RISKLESS THAT THEIR CAPITAL FOR HOLDING THEM SHOULD BE UNDER TWO PERCENT." Fannie Mae's Chairman and CEO Franklin Raines

Was greed involved?

· For this type of brilliant forecasting, RAINES WAS COMPENSATED $90 MILLION during his tenure.

· When JAMIE GORELICK, Democrat, took over and continued Raines' nothing-can-go-wrong-here policies, she EARNED $26 MILLION.

· She was followed by DEMOCRAT JIM JOHNSON, who was at or near the wheel when the car went into the ditch in 2007. HE TOOK HOME A PALTRY $21 MILLION.

· DEMOCRAT RUBIN TOOK HOME $100 MILLION FROM HIS POST-TREASURY JOB AT CITIBANK (which was eventually saved by a bailout.) .

Countrywide's role

Bloomberg said, "IT WAS NOT THE BANKS THAT CREATED THE MORTGAGE CRISIS. IT WAS, PLAIN AND SIMPLE, CONGRESS, WHO FORCED EVERYBODY TO GO AND GIVE MORTGAGES TO PEOPLE WHO WERE ON THE CUSP. ... THEY WERE THE ONES WHO PUSHED FANNIE AND FREDDIE TO MAKE A BUNCH OF LOANS THAT WERE IMPRUDENT, IF YOU WILL."

The usual suspects on the left went crazy. The New York Times Paul Krugman called Bloomberg an "ignoramous," citing liberal blogger Mike Konczal's Fannie defense:

"The first thing to point out is that the both the subprime mortgage boom and the subsequent crash are very much concentrated in the private market ... [Fannie and Freddie] were not behind them," Konczal said.

IS KONCZAL RIGHT? ARE FANNIE AND FREDDIE INNOCENT OF CAUSING THE MORTGAGE CRISIS?

This we do know: THANKS TO THE WIDESPREAD BELIEF THAT THE FEDERAL GOVERNMENT WOULD BAIL THEM OUT, FANNIE AND FREDDIE WERE ABLE TO BORROW MONEY AT BELOW-MARKET INTEREST RATES.

This gave them a significant competitive advantage over private-sector firms which, by 1992, the TWO GOVERNMENT-BACKED CORPORATE ENTITIES HAD TURNED INTO AN ALMOST 70 PERCENT SHARE IN THE MORTGAGE SECURITIZATION MARKET.

That same year, at the direction of the Congress, the Department of Housing and Urban Development began setting "affordable" mortgage goals for the agencies.

Countrywide was a growing force in the mortgage industry when it partnered with Fannie in 1992. BUT AFTER MOZILO'S FIRM SECURED A STEADY GOVERNMENT BUYER FOR THEIR LOANS, BUSINESS EXPLODED. REVENUES WENT FROM $92 MILLION IN 1992, TO $860 MILLION IN 1996, TO $2 BILLION IN 2000. BY 2004, THEY WERE THE NATION'S LARGEST MORTGAGE LENDER.

The secret to Countrywide's success was no mystery: They shredded standard industry lending practices, giving home loans to virtually anybody who asked. FANNIE MAE NOT ONLY KNEW THIS, FANNIE REWARDED IT.

IN 2000, THE FANNIE MAE FOUNDATION HONORED COUNTRYWIDE FOR "OUTSTANDING ACHIEVEMENT" IN THE INDUSTRY. The foundation's 2000 annual report noted: "WHEN NECESSARY -- IN CASES WHERE APPLICANTS HAVE NO ESTABLISHED CREDIT HISTORY, FOR EXAMPLE -- COUNTRYWIDE USES NONTRADITIONAL CREDIT, A PRACTICE NOW ACCEPTED BY [FANNIE]."

Countrywide continued to be the biggest supplier of loans to Fannie Mae all the way through the height of the housing boom. IN 2004, 26 PERCENT OF THE LOANS FANNIE BOUGHT WERE FROM COUNTRYWIDE. IN 2007, THAT NUMBER HAD RISEN TO 28 PERCENT.

In his 1993 Nobel Prize lecture, economist Douglass North said, "IF THE INSTITUTIONAL FRAMEWORK REWARDS PIRACY, THEN PIRATICAL ORGANIZATIONS WILL COME INTO EXISTENCE; AND IF THE INSTITUTIONAL FRAMEWORK REWARDS PRODUCTIVE ACTIVITIES THEN ORGANIZATIONS -- FIRMS -- WILL COME INTO EXISTENCE TO ENGAGE IN PRODUCTIVE ACTIVITIES."

From 1992 through the height of the housing bubble, Fannie Mae and Freddie Mac used their monopoly position in the mortgage securitization industry to reward firms like Countrywide for making bad bets in the housing market. COUNTRYWIDE'S SUCCESS WAS A SIGNAL TO OTHER MARKET PARTICIPANTS TO LOWER THEIR STANDARDS AS WELL.

Wall Street banks are not blameless for the financial crisis. BUT THEY WERE ONLY RESPONDING TO THE INCENTIVES SET UP BY THE FEDERAL GOVERNMENT. Ignoring this history will help no one

http://washingtonexaminer.com/opinion/columnists/2011/11/conn-carroll-facts-show-fannie-freddie-led-mortgage-market-collapse#ixzz1dUhRb0Dg

What you see when government becomes partners with private industry is crony capitalism at its worst.  Countrywide was feted for their good works, yet they were a major example of why the collapse happened. 

Moving beyond Freddie and Fannie

The term “permanent conservatorship” is an oxymoron. By its very construct, the conservatorship of a corporation is meant to be temporary. And yet THREE YEARS AFTER THE BAILOUT OF FANNIE MAE AND FREDDIE MAC, WE ARE NO CLOSER TO TRANSITIONING THEM OFF GOVERNMENT LIFE SUPPORT THAN WE WERE THE DAY IN 2008 WHEN THEY CAME UNDER DIRECT GOVERNMENT CONTROL.

This is unacceptable.

A delay in dealing with Fannie and Freddie was partly inevitable, as policymakers worried that any misstep could negatively affect a fragile housing market. But WE HAVE COME TO A POINT WHERE CONTINUED INACTION IMPEDES THE ABILITY OF THE PRIVATE MARKET TO TAKE OVER A FUNCTION THE GOVERNMENT HAS COMPLETELY MISMANAGED. We must move beyond Fannie and Freddie, immediately.

This task will not be politically easy. Many of the institutions that have come to rely on the corporate welfare Fannie and Freddie provide have argued that we cannot have a housing finance system without the support of government-sponsored enterprises (GSEs). This argument not only ignores the risks taxpayers are forced to bear but also fundamentally misrepresents the structure of the housing finance system.

Broadly speaking, THE RISKS INHERENT IN MORTGAGE LENDING CAN BE PLACED IN TWO CATEGORIES, INTEREST RATE RISK AND CREDIT RISK. Interest rate risk stems from the fact that homeowners can prepay their mortgages at any time, and they generally choose to do so when interest rates are low. This leaves the lender with the tricky job of managing an asset-liability mismatch. But THE PRIVATE SECTOR HAS PROVED CAPABLE OF THE TASK. IN FACT, THE DEVELOPMENT OF THE RISK MANAGEMENT INFRASTRUCTURE TO DEAL WITH THIS CHALLENGE REMAINS A GREAT ACCOMPLISHMENT OF MODERN FINANCE.

The second risk in mortgage lending is credit risk, or the risk that a borrower will default on his or her mortgage. TODAY, MORTGAGE CREDIT RISK IS ALMOST COMPLETELY PRICED AND MANAGED BY THE GOVERNMENT. HAVING “CROWDED OUT” PRIVATE INVESTORS BY CHARGING AN INSURANCE PREMIUM THAT WAS TOO CHEAP, THE GSES ARE SADDLED WITH $5 TRILLION WORTH OF BAD CREDIT. This is a tragedy of our own making. During the boom years, the GSEs’ affordable housing goals were coupled with a Congress and an administration that saw only the bright side of rapidly increasing homeownership rates. That meant that as housing prices began to spike, it was impossible to make credit slightly more expensive…..

http://www.washingtonpost.com/opinions/moving-beyond-freddie-and-fannie/2011/11/22/gIQAUyPhtN_story.html?hpid=z6

Barney Frank and Fannie and Freddie

IN THE MYTHMAKING OF THE REACTIONARY LEFT, PRIVATE BANKS CREATED RISKY FINANCIAL INSTRUMENTS PREDICATED ON THE U.S. MORTGAGE INDUSTRY THAT WERE SO INTRINSICALLY CORRUPT THAT IT LED TO AN INEVITABLE COLLAPSE IN THE HOUSING MARKET IN 2008. PRIVATE BANKS THAT WERE BAILED OUT IN TARP WERE COLLECTIVELY ENGAGED IN NEGLIGENCE AND FRAUD THAT LED TO OUR PRESENT ECONOMIC DEMISE. The staggering loss of $6 trillion in housing values damaged the entire global economy.

Noticeably absent from this commentary and storytelling is a sense of the federal government's key role in creating the crisis. FANNIE MAE AND FREDDIE MAC WERE THE LARGEST FINANCIERS OF MORTGAGES IN THE UNITED STATES. Preceding the crisis, congressional regulator Franklin Raines made public statements that there "was no risk" to investing in American mortgages. THE DEREGULATED VIEW OF FANNIE MAE AND FREDDIE MAC COMBINED WITH THE REGULATOR'S STATEMENTS THAT THERE WAS NO RISK IN THIS AREA OF FINANCIAL INVESTMENT WAS THE EQUIVALENT OF TELLING CHRONIC GAMBLERS THAT THE CASINO WILL COVER ALL BETS. Not only did congressional regulators such as Barney Frank fail to constrain the federal agencies inflating the housing bubble, but they actively criticized in public those trying to prevent a crisis through increased regulation, and they worked to inculcate the view that there were no undue risks in the American housing market.

Congressman Frank provides his own convoluted review of this crisis on his congressional homepage. In his account, the Bush administration took the inexplicable view of opposing regulation from 2001 to 2007 and then endorsed regulation in 2007, when FRANK TOOK LEADERSHIP OF THE IMPORTANT HOUSING ISSUES RELATING TO FANNIE MAE AND FREDDIE MAC. ACCORDING TO FRANK, THE REGULATIONS PASSED IN 2007 BY HIMSELF AND PRESIDENT BUSH WERE "TOO LATE." Outside the reactionary left's mythmaking offered by Congressman Frank, the Bush administration repeatedly called for heightened congressional oversight and regulation of Fannie Mae and Freddie Mac throughout both terms of the Bush presidencies. In reality, THE BUSH PROPOSALS TO TREAT GSES LIKE FANNIE MAE AND FREDDIE MAC THE SAME AS PRIVATE BANKS IN THE REGULATORY WORLD, WERE TERMED "INANE" IN 2005 BY CONGRESSMAN FRANK. The reforms passed by Frank came in 2008 -- after the industry had collapsed -- despite Frank's 2005 assurance that Fannie Mae and Freddie Mac were "fundamentally sound." The GSEs purchased considerable political sway in fall of 2006 to prevent the regulatory leveling sought by the Bush administration. Democratic senators such as Chris Dodd and Barack Obama received considerable financial support from the GSEs in a landslide sweep for Democrats in Congress that functionally guaranteed that the GSEs would fend off future regulatory reforms pushed by the president….

….The proper writing of Barney Frank's political epitaph is not important only as a matter of history. It is important as a moral enterprise in trying to allow history to teach us how not to repeat the errors of the past. THE AMERICAN PUBLIC HAVE AN INTUITION THAT THEY HAVE BEEN ABUSED BY THEIR POLITICAL HANDLERS. THE SURROUNDING PUNDITRY CLASS CONTINUES TO FORM THE GREEK CHORUS OF SUPPORT FOR HALF-TRUTH STORIES OF HOW WE WENT FROM 4.7% UNEMPLOYMENT IN JANUARY OF 2007 AND FALLING DEFICITS TO 9-PERCENT UNEMPLOYMENT and ever-soaring trillions of debt in January of 2012. The retirement and a proper sense of the fiscal legacy of Barney Frank is an opportunity to restore some measure of sanity to America's economic house and possibly avoid a repeat of these mistakes.

 http://www.americanthinker.com/2011/12/the_fall_of_the_house_of_frank.html#ixzz1fN85Ph5t

Barney and Chris were the protectors of Fannie and Freddie.  Both will be gone from congress by January 2012.  The Democrats try to pin this on greed and deregulation.  Greed is always a factor and you will never eliminate it.  That is why you need some regulations and the Democrats fought the regulations when it interfered with what they lusted for, more votes. 

Should the Democrats panic?

What’s new today

Story #1 talks of a desperation in Obama’s fund raising pitch.  #2 talks about the decrease in the unemployment rate.  #3 is the case for Newt Gingrich and what he brings to the presidency.  #4 tells the story the Democrats don’t want told about Fannie, Freddie and Chris and Barney.  #5 takes us to the Occupy movement and the false story about Lech Walesa supposedly endorsing the movement.  #6 gives us the six signs that the Occupy Movement is now politically dead. 

1.  Obama Sounds Desperate

Suddenly, President OBAMA IS INSERTING A STARK NEW TONE OF DRAMA AND URGENCY INTO HIS CAMPAIGN SPEECHES TO LOYALISTS AT POLITICAL FUNDRAISERS.

After talking up his payroll tax cut in Pennsylvania Wednesday afternoon, Obama flew Air Force One to New York City for not one, not two, but three money gatherings from Gotham liberals….

…."EVERY SINGLE THING THAT WE CARE ABOUT IS AT STAKE IN THE NEXT ELECTION," he told one donor group. "The very core of what this country stands for is on the line."

So, the future of the entire country is now inextricably tied to Obama's own reelection?

SUCH HYPERBOLIC, HUBRISTIC CLAIMS ARE USUALLY RESERVED FOR A CAMPAIGN'S CLOSING HOURS TO PROMPT A LAST-MINUTE SPURT OF POLITICAL ADRENALIN AMONG SUPPORTERS. Not 341 days out. Not 10 months before even early voting opens. This couldn't possibly be desperation! Already?

Here are several other points made by Obama to a possibly puzzled crowd assembled at the Gotham Bar and Grille:

"I've got to win in 2012."

"In order to finish the job, I'm going to have to have a second term."

"I need a couple more years to finish the job."

"I'm going to need another term to finish the job."…

http://news.investors.com/Article/593351/201112010754/obama-fundraiser-speech-needs-more-time.htm?src=IBDDAE

He is right when he said the core of what this country stands for is at stake. However, that reminder probably works more against his election than for it. 

     2. Jobs: Mixed Results for Obama

U.S. employers, continuing a pattern of modest hiring, ADDED 120,000 NEW JOBS IN NOVEMBER, the Labor Department said Friday.

The nation's UNEMPLOYMENT RATE, HOWEVER, FELL SHARPLY TO 8.6% FROM 9% IN OCTOBER. There was an unusually big drop in the number of people who reported being out of work. Many jobless people may have quit looking for jobs, and thus wouldn't have been counted as officially unemployed. Analysts expect the jobless figure to climb back up next month.

Strong HOLIDAY HIRING BOOSTED THE NEW JOB TALLY LAST MONTH. RETAILERS ADDED ALMOST 50,000 JOBS, the second strongest November hiring by stores in a decade. TWO OTHER LOWER-PAYING SECTORS, TEMPORARY-HELP AND LEISURE BUSINESSES, ACCOUNTED FOR MUCH OF THE REST OF THE JOB GAINS. Manufacturing payrolls were flat, and government continued to slash workers….

http://www.latimes.com/news/la-fiw-jobs-20111203,0,1092997.story

Kind of reminds me of the old joke, “I have good news and bad news for you, which do you want first.”  “Give me the bad news.”  “Okay, we’re out of food and the only thing we have to eat is grass.”  “What’s the good news?” “There isn’t enough of that to go around.”  I’ll give you the good news first.  We gained 120,000 jobs last month.  Now the bad most of them were temporary or low paying. 

3.   The Case for Gingrich

…Nevertheless, THERE IS A COMPELLING CASE FOR GINGRICH AS THE REPUBLICAN NOMINEE. He is both glib and brilliant. In this respect Gingrich resembles much more the parliamentary pugilist Winston Churchill, who also had very heavy baggage, than Ronald Reagan, who gave "The Speech" ten thousand times. Like Churchill, who mastered much more than just politics, Gingrich is an historian, a fiction writer, and a dozen other things.

HE WILL NOT BE STUMPED BY THE MEDIA. IN FACT, GINGRICH WILL HAVE THE KNOWLEDGE TO ACTUALLY EMBARRASS THE AUTOMATONS WHO READ TELEPROMPTER QUESTIONS. More pointedly, Gingrich has the best chance of any Republican to display Obama before America in a "deer in the headlights" moment. OUR CURRENT PRESIDENT IS A PROFOUNDLY IGNORANT MAN WHOSE IGNORANCE IS MASKED BY EQUALLY IGNORANT AND WHOLLY PROGRAMMED MEDIA.

Yet what Obama doesn't know can hurt us, and a single slip in the debates could cost him -- and perhaps his party -- five percentage points in the general election. That could not only seal the presidential election, but also swing dozens of House and Senate races and turn a presidential victory into a presidential landslide. People are scared now, and a man who obviously grasps the present crisis can be a valuable electoral asset.

GINGRICH ALSO UNDERSTANDS CONGRESS. He was House minority whip and then speaker of the House, the most important office in Congress. Gingrich would understand how to move legislation through Congress, and so A CONSERVATIVE AGENDA SUPPORTED BY HIM WOULD HAVE A MUCH GREATER LIKELIHOOD OF ACTUALLY BECOMING LAW than it would with some more ardent, but less experienced, conservatives.

An analogy might be made between LBJ and Gingrich. President Johnson was not nearly as liberal as most Democrat nominees in the last fifty years, yet he transformed America (for the worse, but still dramatically) with his "Great Society" agenda. Johnson, who had been Senate majority leader before he was vice president, knew just how Congress worked. Since Johnson, America has moved progressively to the left, because Johnson was able to get enacted what seemed like a modestly leftist agenda.

Moreover, GINGRICH AS A NOVICE SPEAKER LEARNED THE HARD WAY WHAT WORKS AND WHAT DOESN'T IN HIGH-PROFILE NATIONAL LEGISLATIVE DEBATES. It is easy to underestimate what he accomplished with a modest House majority and a Senate in which Republicans could not even end debate on a bill, much less, in either house, override a presidential veto.

His personal scandals of the past would actually come as a strength in the general election. Gingrich as speaker was smeared and attacked so relentlessly that ALL THE "BAD NEWS" HAS BEEN HEARD LONG BEFORE. Rather like with Clinton, who had even more scandals, no one much cares about an older man whose life has been scrutinized and used by his enemies…

http://www.americanthinker.com/2011/12/the_case_for_gingrich.html#ixzz1fNCNUjQI

This is a very good summary of the case for Newt. 

4.  Frank, Fannie and Freddie

…IN THE MYTHMAKING OF THE REACTIONARY LEFT, PRIVATE BANKS CREATED RISKY FINANCIAL INSTRUMENTS PREDICATED ON THE U.S. MORTGAGE INDUSTRY THAT WERE SO INTRINSICALLY CORRUPT THAT IT LED TO AN INEVITABLE COLLAPSE IN THE HOUSING MARKET IN 2008. Private banks that were bailed out in TARP were collectively engaged in negligence and fraud that led to our present economic demise. The staggering loss of $6 trillion in housing values damaged the entire global economy.

NOTICEABLY ABSENT FROM THIS COMMENTARY AND STORYTELLING IS A SENSE OF THE FEDERAL GOVERNMENT'S KEY ROLE IN CREATING THE CRISIS. Fannie Mae and Freddie Mac were the largest financiers of mortgages in the United States. Preceding the crisis, congressional regulator FRANKLIN RAINES MADE PUBLIC STATEMENTS THAT THERE "WAS NO RISK" TO INVESTING IN AMERICAN MORTGAGES. The deregulated view of Fannie Mae and Freddie Mac combined with the regulator's statements that there was no risk in this area of financial investment was the equivalent of telling chronic gamblers that the casino will cover all bets. Not only did congressional regulators such as Barney Frank fail to constrain the federal agencies inflating the housing bubble, but THEY ACTIVELY CRITICIZED IN PUBLIC THOSE TRYING TO PREVENT A CRISIS THROUGH INCREASED REGULATION, and they worked to inculcate the view that there were no undue risks in the American housing market.

Congressman Frank provides his own convoluted review of this crisis on his congressional homepage. IN HIS ACCOUNT, THE BUSH ADMINISTRATION TOOK THE INEXPLICABLE VIEW OF OPPOSING REGULATION FROM 2001 TO 2007 AND THEN ENDORSED REGULATION IN 2007, WHEN FRANK TOOK LEADERSHIP OF THE IMPORTANT HOUSING ISSUES RELATING TO FANNIE MAE AND FREDDIE MAC. According to Frank, the regulations passed in 2007 by himself and President Bush were "too late." Outside the reactionary left's mythmaking offered by Congressman Frank, the BUSH ADMINISTRATION REPEATEDLY CALLED FOR HEIGHTENED CONGRESSIONAL OVERSIGHT AND REGULATION OF FANNIE MAE AND FREDDIE MAC THROUGHOUT BOTH TERMS OF THE BUSH PRESIDENCIES. In reality, the Bush proposals to treat GSEs like Fannie Mae and Freddie Mac the same as private banks in the regulatory world, were termed "inane" in 2005 by Congressman Frank. The reforms passed by Frank came in 2008 -- after the industry had collapsed -- despite Frank's 2005 assurance that Fannie Mae and Freddie Mac were "fundamentally sound." The GSEs purchased considerable political sway in fall of 2006 to prevent the regulatory leveling sought by the Bush administration. Democratic senators such as Chris Dodd and Barack Obama received considerable financial support from the GSEs in a landslide sweep for Democrats in Congress that functionally guaranteed that the GSEs would fend off future regulatory reforms pushed by the president….

http://www.americanthinker.com/2011/12/the_fall_of_the_house_of_frank.html#ixzz1fN8mXRRH

This is the Achilles’ heel of the left in the financial crisis.  They pooh pooh the idea that Fannie and Freddie were the root cause of the crisis, because it doesn’t fit their narrative.

5.   Lech Walesa and the OWS

It was about six weeks ago that the press was abuzz with news that legendary labor activist Lech Walesa, the man who, more than anyone else, was responsible for bringing down communism in Poland, was planning a visit to the Occupy Wall Street protesters. The left-wing blogosphere erupted in paroxysms of joy; BRENT BUDOWSKY AT THE HILL SUMMED IT UP BEST: "ONE OF HISTORY'S GREAT LEADERS FOR JOBS, WORKERS AND FREEDOM IS NOW SUPPORTING THE OCCUPY WALL STREET PROTEST. Lech Walesa has now weighed in, big time, for the good guys."

I forgot all about this until just yesterday, when I learned that WALESA NEVER DID MAKE THAT VISIT--a fact apparently overlooked by the mainstream press, although it was big news in the conservative blogosphere. WALESA EXPRESSED HIS VIEWS MORE OPENLY IN MID-NOVEMBER IN AN EDITORIAL CRITICAL OF THE OWS MOVEMENT IN THE SAN FRANCISCO CHRONICLE:

I have lived under the heavy hand of communism, where the state controls virtually everything, and I've lived under freedom. While today's protesters have many legitimate concerns, let me assure them that instead of either cronyism or greater government control, IT IS DIALOGUE AND SOLIDARITY LEADING TO FREEDOM THAT WE SHOULD ALL STRIVE FOR…

http://nlt.ashbrook.org/2011/11/lech-walesa-and-the-ows.php

With the anti-capitalist tone of the OWS movement, it was naïve for the proponents and the occupiers to think an anti-Communist leader would embrace their movement.  It appears Walesa realizes that freedom is one of the first things leftists are willing to sacrifice.

6.  Six Signs the Occupy Movement is Politically Dead

…..here are six undeniable signs that the same media and leftist elites who promised you air cover in the revolution that would finally fulfill your frustrated dreams have just left you swinging in the wind, fully exposed and more than a little humiliated with nowhere to go:

1. MSM IS NO LONGER INFATUATED WITH OCCUPY: Other than the big stories surrounding Occupy evictions, the mainstream media’s all but stopped covering the Occupy movement. 12 to 14 hours a day the cable nets are on in my office, and even leftist CNN and far-left MSNBC have ceased trying to use the Occupiers as a way to jump-start Obama-friendly narratives about taxing the rich and how Wall Street is to blame for Obama’s failed economy….

….2. JON STEWART GUTS OCCUPY: On November 17, “The Daily Show” took the “cool” out of Occupy with a devastating report (see above) that exposed the movement for the Orwellian Animal Farm these kinds of movements always become (which of course was Orwell’s point). No one in media understood better how useful this movement could’ve been to Barack Obama than Jon Stewart, but HE’S ALSO SMART ENOUGH TO KNOW WHEN IT’S TIME TO FIRE OFF A FLARE WARNING OBAMA TO STAY AWAY — AND THAT’S EXACTLY WHAT THIS SEGMENT WAS MEANT TO DO, AND DID.

3. AP PRETENDS DEMOCRATS NEVER SUPPORTED OCCUPY: On November 18, the Associated Press laughably and transparently attempted to memory-hole the Democrats’ very public and energetic embrace of all things Occupy.

Gee, I wonder why?

4. SLATE FREAKS OVER AD CONNECTING HIGH-PROFILE DEMOCRAT TO OCCUPY: Slate’s Libby Copeland was so panicked over a political ad that truthfully and effectively laid out Elizabeth Warren’s once-proud connection to the Occupy movement that she made a public fool of herself labeling the ad as “sexist.”

That’s desperate. And more than a little funny.

5. NEW YORKER BARES OCCUPY’S ASTRO-TURF FOR THE WORLD TO SEE: Even though Big Government exposed all this over a month ago, the fact that the New Yorker would, IN A MAJOR FEATURE PIECE,  FINALLY PUT TO BED THE LIE THAT OCCUPY WAS JUST SOME SORT OF ORGANIC, GRASSROOTS ORGANIZATION LIKE THE TEA PARTY, is the final nail in the movement’s coffin.

After all, someone has to take the blame for this.

6. LIBERAL CITIES EVICT OCCUPY: Mayors of some of the most liberal cities in America (Oakland, Los Angeles, Chicago, New York, Philadelphia) ARE PLAYING BULL CONNOR TO ALL THOSE WONDERFUL LITTLE HIPPIES WHO ONLY WANT “SOCIAL JUSTICE.” Furthermore, in their latest reports, the MSM has even stopped trying to make the cops look bad during these evictions. The coverage can best be described as obligatory.

Democratic mayors of big, urban liberal cities don’t evict popular movements, do they? They wouldn’t even evict a movement popular with the Obama’s base….

http://bigjournalism.com/jjmnolte/2011/12/01/dead-movement-walking-top-six-signs-the-left-and-the-msm-have-hung-occupy-out-to-dry/

A very nice summation of why the OWS movement is now the living dead.  Another sign is the fact that many are saying the Occupy movement has already won as it has put the spotlight on greed.  That isn’t winning.  That’s declaring victory and retreating.

Barney and Barack: Both will be unemployed in January 2013

What’s new today
Stories #1 and #2 talk about Barney Frank.  It first looks at if his decision to retire bodes ill for the Democrats and the second story looks at how Barney chose to bow out—it wasn’t pretty.  Articles 3 through 5 are all about BHO.  #3 discusses how Obama may wake up thinking about jobs but he seems to kill them when a real one comes into sight.  #4 looks at all the illusions Obama has dashed in his three years in office.  #5 talks about the demographics vs the economics of the 2012 election.  #6 tells the story of a man who kidnapped a family and is now suing them for breach of contract.  It appears the Occupy Movement is alive in the state pen as well as Wall Street.  Want to learn the three inconvenient truths plaguing the OWS movement?  Read #7.  Back in 2008, the Republicans had their Joe the Plumber.  It appears the Occupy Movement has their Joe the Puppeteer.  READ all about it in #8.

1.  Reading the Barney Frank tea leaves

Less than a year ago, Nancy Pelosi was forced to move across the second floor hall of the Capitol, leaving behind the magnificent speaker’s balcony that overlooks the National Mall.

WITH THE POSSIBILITY OF RETAKING CONTROL OF THE HOUSE OF REPRESENTATIVES. GROWING MORE REMOTE BY THE DAY, the California Democrat will have to get used to the east-front view of parked cars and the visitors’ center entrance as her Democratic colleagues abandon ship.

Barney Frank announced Monday that he’s giving up a 30-year hold on his congressional seat, citing a new district and being more effective outside of politics as his motivation. The Massachusetts Democrat is walking away from his position as the ranking member on the House Financial Services Committee, which he had chaired when the Democrats were in the majority.

Rep. Peter Roskam, the chief deputy whip, thinks there’s more to the story. “IF THE SENIOR DEMOCRAT THINKS THAT HE’S ON THE CUSP OF RETURNING TO THE CHAIRMANSHIP OF ONE OF THE PREMIERE COMMITTEES IN THE HOUSE, HE’S GOING TO STAY,” the Illinois Republican told The Washington Times in an interview. And Mr. Frank is not alone leaving Mrs. Pelosi’s charge.

So far, 16 MORE DEMOCRATS HAVE ANNOUNCED THEY ARE GIVING UP THEIR SEATS IN 2012. Half are running for higher office, and the rest are just bidding adieu to politics. “Senior Democrats are voting with their feet,” said Mr. Roskam. “They see that President Obama’s promise of 2008 has just faded incredibly quickly. They figured out that the 2012 cycle is likely to be another wave election similar to what we saw in 2010.” So far this cycle, no House Republican is retiring from politics….

http://www.washingtontimes.com/news/2011/nov/29/nancy-pelosis-office-without-a-view/

While you hear some democrats talk about retaking the House, it ain’t going to happen in 2012.

2.  Barney the Bully

The morning after his retirement announcement, Rep. Barney Frank scored an interview on NBC’s Today Show, gaining the opportunity to act as an elder statesman in front of a TV audience of millions. INSTEAD, THE MASSACHUSETTS DEMOCRAT CHOSE TO QUARREL WITH THE INTERVIEWER….

… Guthrie asked for his response to those who take his retirement as a sign that the Democrats won’t win control of the House in 2012.

“I WISH WE COULD TALK SUBSTANCE SOMETIMES IN THE MEDIA,” FRANK COMPLAINED. “I know that’s against, kind of, apparently, the rules.” He went on to say that “I have decided not to serve until three months before my 75th birthday. I guess I don’t understand why that is so hard for people to grasp.”

The amiable Guthrie tried again. How does he feel about the worsening tone in Washington?

“WELL, YOU EXEMPLIFY WHAT I THINK IS A CHANGE IN THE TONE,” FRANK SAID. “YOU’VE MANAGED TO ASK ALL SORT OF NEGATIVE QUESTIONS. . . . IT’S ‘GOTCHA’ JOURNALISM. It’s ‘gotcha’ politics. And it does lessen our chances to get things done.” …

http://www.washingtonpost.com/opinions/barney-the-bully-congressman-franks-other-legacy/2011/11/29/gIQAEX979N_story.html

Barney Frank exemplifies what is wrong in politics today.

3.   Does President Obama wake up thinking of Jobs?

… one oil company, Conoco Phillips, has said it will go after the oil and gas in the NPRA, estimated by the U.S. Geological Survey to hold 2.7 billion barrels of oil and 114.36 trillion cubic feet of natural gas.

TO GET IT OUT, CONOCO PHILLIPS WANTS TO BUILD A ROAD BRIDGE AND PIPELINE OVER THE COLVILLE RIVER ON THE EDGE OF THE NPRA TO GET DRILLING SUPPLIES IN AND THE OIL AND GAS OUT.

The Army Corps of Engineers, backed by the usual environmental suspects, says A PIPELINE UNDER THE RIVER, WHICH IS FROZEN HALF THE YEAR, IS PREFERRED EVEN THOUGH THE OIL COMPANY HAS SAID IT WOULD BE LESS SAFE.

The oil firm argues that since the pipeline will carry a mix of oil, gas and water, it would be at greater risk of corrosion and leaks under the water. An above-ground pipeline would be easier to monitor and maintain.

But Interior Secretary Ken Salazar, who has impeded domestic energy production anywhere he can on environmental grounds, supports the Corps' decision.

The Environmental Protection Agency has designated the Colville River as an aquatic resource of national importance. The Army Corps of Engineers used that as an excuse when deciding on the bridge proposal. "We should minimize the harm to the environment," says Col. Reinhard Koenig.

http://news.investors.com/Article.aspx?id=593183&p=1

It appears when Obama wakes up thinking of jobs, he’s thinking of how he can stop them. 

4.  Obama 101:  Few presidents have dashed so many illusions as Obama.

In the last three years, the president has taught us a great deal about America, the world, and himself.

Before Obama, many Americans still believed in massive deficit spending, whether as an article of fairness, a means to economic growth, or just a lazy fallback position to justify an out-of-control federal government. BUT AFTER THE FAILURE OF A NEARLY $800 BILLION “STIMULUS” PROGRAM — INTENDED TO KEEP UNEMPLOYMENT UNDER 8 PERCENT — NO ONE BELIEVES ANY MORE THAT AN ALREADY INDEBTED GOVERNMENT WILL FOSTER ECONOMIC GROWTH BY TAKING ON ANOTHER $4 TRILLION IN DEBT. In other words, “stimulus” is mostly a dead concept. The president — much as he advised a barnstorming President Bush in 2005 to cease pushing Social Security reform on a reluctant population — should give it up and junk the new $500 billion program euphemistically designated as a “jobs bill.” The U.S. government is already borrowing every three days what all of America spent on Black Friday.

OBAMA HAS ALSO TAUGHT US THAT PROMINENT GOVERNMENT INTERVENTION INTO THE PRIVATE SECTOR OFTEN MAKES THINGS WORSE, AND INVITES CRONY-CAPITALIST CORRUPTION. Nearly three years into this administration, it is striking how seldom Barack Obama brags about Cash for Clunkers, the Chrysler and GM bailouts, or Solyndra. He either is quiet about them or sort of shrugs, as if to say, “Stuff happens.” EVEN CREATIVE BOOKKEEPING CANNOT MASK THE FACT THAT THE AUTO-COMPANY BAILOUTS (BEGUN, TO BE SURE, BY THE BUSH ADMINISTRATION, BUT MADE WORSE UNDER OBAMA) WILL PROVE A HUGE DRAIN ON THE TREASURY. No one even attempts any more to convince us that we will like Obamacare once we read the legislation, or that it will save us costs in the long run, or that it will cheer up businesses so that they will invest and hire. All that was dreamland, 2009, and this is reality, 2011, when WE HEAR ONLY “IT COULD HAVE BEEN WORSE.”…

http://www.nationalreview.com/articles/284333/obama-101-victor-davis-hanson

In fact, the motto for 2012 should be, “It Could Have Been Worse:  And It Will Be If You Reelect Obama.”

5.  Is Obama Toast in 2012?

The latest report  from Ruy Teixeira and John Halpin of the progressive Center for American Progress contains a thoughtful examination of President Obama's re-election chances. There's an awful lot packed into the 60 pages of text, but the basic thrust is as follows: WE SHOULD EXPECT THE NON-WHITE SHARE OF THE ELECTORATE TO GROW AT LEAST 2 PERCENT FROM THE 2008 ELECTION, PADDING OBAMA'S BASE LINE. IF HE CAN HOLD SERVE AMONG EITHER THE WHITE WORKING CLASS OR COLLEGE-EDUCATED WHITES, HE SHOULD BE ABLE TO PULL OUT A VICTORY, EVEN AMID TROUBLED ECONOMIC TIMES.

In truth, the report is substantially less bullish on Obama's re-election chances than some of the articles analyzing it have suggested.  IT ACKNOWLEDGES THAT THE PRESIDENT HAS A “TIGHT NEEDLE TO THREAD” AND THAT “AMERICANS WILL BE OPEN TO REPLACING PRESIDENT OBAMA WITH AN EVEN-TEMPERED, NONTHREATENING GOP LEADER FOCUSED ON THE ECONOMY.” In other words, the triumphalism of Teixeira’s “Emerging Democratic Majority” argument of the early 2000s is decidedly tempered throughout the report, and with good reason. After all, the GOP just won its second-largest share of seats in the House of Representatives since 1928, with an electorate that had the second-smallest share of non-Hispanic white voters in history. In retrospect, those repeated “last gasps” of the GOP coalition (1994, 2002, 2004, 2010) look a lot more like “steady breathing.”

But the optimistic tones in Teixeira and Halpin’s piece need to be tempered even further. The “demographics versus economics” debate that Teixeira and Halpin suggest will determine the outcome of the next election isn’t a 50-50 proposition. IT IS WEIGHTED HEAVILY TOWARD THE ECONOMICS SIDE, AND I THINK IT’S UNLIKELY THAT DEMOGRAPHICS WILL SAVE THE PRESIDENT. There are three critical observations here:

1.      The minority population may not grow substantially from 2008 through 2012….

2.      Obama will have a difficult time winning either white working-class voters or upscale whites.

3.      Winning minority voters and white voters is something of a zero-sum game.

http://www.realclearpolitics.com/articles/2011/11/30/obamas_2012_chances_and_democratic_demographic_dreaming_112221-2.html

This is an interesting article that describes why the “permanent majority coalition” envisioned by Teixeira and Halpin is most likely a childish dream. 

6.  Another One of the 99 Percenters

A Colorado man who is serving a nearly 11-year sentence for KIDNAPPING A NEWLYWED KANSAS COUPLE, STEALING A VEHICLE AND FLEEING FROM AUTHORITIES IN 2009, IS NOW TRYING TO SUE THAT COUPLE FOR BREACH OF CONTRACT.

In his lawsuit, 25-year-old Jessie Dimmick of Aurora, contends that after breaking into Jared and Lindsay Rowley's Topeka-area home while fleeing police, HE AND THE COUPLE REACHED A LEGALLY BINDING, ORAL CONTRACT THAT THEY WOULD HIDE HIM FOR AN UNSPECIFIED AMOUNT OF MONEY. Dimmick, who is representing himself, is seeking $235,000.

"As a result of the plaintiffs breech (sic) of contract, I, the defendant suffered a gunshot to my back, which almost killed me. The hospital bills alone are in excess of $160,000, which I have no way to pay," Dimmick wrote in his civil suit filed last month in Shawnee County District Court.

In Sept. 2009, Dimmick was leading authorities in a chase that ended with Dimmick crashing a stolen vehicle in the Rowleys' yard.

He was wanted for questioning about the murder of Colorado man Michael Curtis, who had been found beaten to death in a motel earlier that month.

http://www.huffingtonpost.com/2011/11/29/jessie-dimmick-is-suing-h_n_1119317.html?ncid=webmail4

Sounds like a story the OWS could get behind. 

7.  Three Inconvenient Truths for OWS

Occupy Wall Street supporters are claiming credit for at least one political accomplishment: ELEVATING THE ISSUE OF INCOME INEQUALITY TO THE TOP OF THE NATIONAL CONVERSATION.

The Occupiers are right about American incomes: They've definitely grown more unequal. But THIS FACT PRESENTS THREE INCONVENIENT TRUTHS FOR THE OCCUPY WALL STREET MOVEMENT…

… What makes this truth inconvenient is that the proposed remedy — tax these haves and redistribute that income to the have-nots — has an upper boundary. Indeed, blue states such as CALIFORNIA AND NEW YORK, WHERE THESE SUPERSTAR EFFECTS ARE MOST PRONOUNCED, ARE ALREADY TRYING TO REMEDY INEQUALITY WITH SOME OF THE HIGHEST STATE INCOME TAXES IN THE COUNTRY, AND THEY HAVE BUMPED UP AGAINST THE LIMITS OF ECONOMIC REALITY.

It's telling that New York Gov. Andrew Cuomo has been a staunch critic of new tax increases, including on the wealthy, saying recently that "YOU ARE KIDDING YOURSELF IF YOU THINK YOU CAN BE ONE OF THE HIGHEST-TAXED STATES IN THE NATION, HAVE A REPUTATION FOR BEING ANTI-BUSINESS — AND HAVE A ROSY ECONOMIC FUTURE."…

http://www.latimes.com/news/opinion/commentary/la-oe-schulz-occupy-20111130,0,7958755.story

Read on if you want to see what the other two inconvenient truths are.  The Occupy movement seems to be fading rapidly. 

8.  OWS has their Joe the Puppeteer

Earlier this month, the left-wing magazine the Nation highlighted Joe Therrien as a symbol of the Occupy Wall Street movement. A New York City public school drama teacher, Therrien was frustrated with the shortcomings of the school system. So he quit his job and "set off to the University of Connecticut to get an MFA in his passion — puppetry." Three years and $35,000 in student loan debt later, Therrien returned home, only to find he couldn't land a full-time job. Apparently, a master's in puppetry doesn't provide the competitive edge in the marketplace he'd hoped for.

Therrien joined Occupy Wall Street, constructing giant puppets and "figuring out how to make theater that's going to help open people up to this new cultural consciousness. It's what I'm driven to do right now."…

http://www.latimes.com/news/opinion/commentary/la-oe-goldberg-culturewars-20111129,0,4107012.column

This is a good example of the divide between the OWS and Middle America.  Joe Therrien left a good job, took on $35,000 in debt and got a degree which allows him to entertain people and earn a meager living and he doesn’t think that’s fair.  He should have a good living from his puppetry.  I’m sure his parents wanted him to get a degree that would have insured his future but Joe didn’t listen to them then and I have no idea what he was thinking when he got his MA degree. 

What we have today is a great number of college graduates who got degrees where there are simply too many people vying for the jobs the degrees prepared them for.  In the meantime “skilled” trade jobs go unfilled. (Hint) This isn’t the fault of the 1%.