Bailout Crisis – Result of Social Engineering
Posted by Turtle on 09/24/2008
by Turtle
Our government is doing it again! They are bailing out corporations that have been irresponsible and greedy. From Freddie Mac and Fannie Mae, to American International Group (AIG), IndyMac, and several others, the impropriety of bad lending practices has resulted in pending disaster for all of America.
Now our “government” (and I use the term loosely) wants to include FOREIGN-OWNED banks in the across-the-board bailout! The wording was changed to include any bank that does significant business in the US, astronomically increasing the $700 billion price tag to upwards of a TRILLION DOLLARS!
Last I heard the US already had a humongous deficit, to the tune of $311+ billion just in the first half of 2008, so where the hell is this bailout money coming from??
Why, your wallet of course!
I bet you’re all wondering how we got ourselves into yet another financial mess wherein the world expects American taxpayers to foot the bill.
This situation relates back to 2 very specific presidential administrations – Carter and Clinton. Carter’s Community Reinvestment Act of 1977 got the ball rolling with its provisions requiring banks to “meet the credit needs of the entire community.” This act was meant to encourage minorities to buy houses and to get small business loans out there.
Translation: Those with poor credit, who would normally be turned down for a mortgage loan due the RISK of not being paid back, could now “qualify” for a mortgage at a higher interest rate, even though the risk from these borrowers did NOT change. Most of the loans under this act were given to minorities. Sub-translation: BANK PROFITS based on race and/or ethnicity.
Fast forward to the Clinton administration, circa 1993-1999.
Clinton changed the CRA rules, implementing punishments on banks that did NOT give out those higher-risk loans – no expanded lending, no new branches, no mergers, etc. Banking institutions were given CRA ratings based on how “diverse” their loan portfolios were, and so had to get more loans out into poorer areas to increase their rating. Around the same time, Freddie Mac and Fannie Mae were given the congressional nod of approval to buy up loans from banks, repackage them, and resell them back to banks.
Translation: The Clinton love-affair with (no, not Monica Lewinsky) multiculturalism and diversity demanded that banks give loans to people who did not deserve them according to their credit history, whom would otherwise not get a mortgage, and were mostly ethnic minorities – to the point of punishing banks that did not comply with potential failure. Sub-translation: CLINTON EMPOWERMENT based on race/ethnicity.
What we are left with is a $ 1 trillion price tag for some leftist social engineering, and might I add … it FAILED MISERABLY!
Can we PLEASE get back to offering loans to people who have earned the credit scores needed for a prime mortgage?
As for this ill-conceived bailout, it’s just another way to continue pulling the wool over the sheeple’s eyes. If the government wanted to get the mess fixed, they would let the failing banks fail, let the cost of housing drop, and allow the free market to adjust itself – you know FREE ENTERPRISE in a CAPITALIST FREE TRADE society?
Go figure.
JR said
Take another look at the CRA, would you. Stop listening to the pundits who don’t know anythinga bout it either. They depend on us not looking into it ourselves. Here is a short history:
http://www.federalreserve.gov/newsevents/speech/Bernanke20070330a.htm
It did not force any banks to give loans. And it did not deregulate the industry. They’re treating you like a mushroom.
And more info on the crisis, if you really want to know:
http://home.comcast.net/~2spamagnet/site/?/blog/view/2/