W’s Fault? – Part II

Posted by Tina

So it’s still early in the final year of George W Bush’s eight years in the White House and an open election is scheduled to take place in November. Years of warnings by the Bush White House have been ignored and a gathering financial catastrophy will create a situation that is ripe for creating crisis. All it needs is a little push.

In June of 2008 Senator Chuck Schumer did a very strange thing as reported by CNBC

Federal officials aren’t supposed to cause bank runs. In fact, much of the New Deal bank regulatory apparatus was set up for the purpose of eliminating such panics. When FDR was hit with a massive set of bank runs shortly after taking office, he gave an address in order to calm terrified depositors, assuring them that the banks would reopen shortly, and that everything would be fine. But Chuck Schumer is no FDR. He doesn’t stop bank runs; he starts them. Or, at least, has started one. The collapse of Indymac bank, the second largest bank failure in American history, began with a letter from the office of Senator Charles Schumer on June 27. He questioned the viability of the bank. When a senior senator who is in a number of influential posts regarding oversight of bank regulators directly attacks the confidence of a depository institution, it matters. Not surprisingly, the director of the Office of Thrift Supervision concluded that the collapse of the bank immediately following the Senator’s comments was not a coincidence. Director Reich concluded that Senator Schumer had ‘given the bank a heart attack’.

Why? Why would a federal official with enormous power, destroy an institution on which tens of thousands of depositors (not all of whom are insured) and employees depend? Why would a New York Senator attack a Pasadena bank, acting as some sort of amateur, self-appointed, long-distance bank examiner?

Why indeed…we’ve been told to follow the money!

“Follow the money” is a good place to start and believe me, plenty of money was made on mortgage securities and sweetheart loans in the redistribution scheme devised by Democrats. Big party players like Clinton, Obama, Dodd, Frank, Gorrelick, Raines, and others on the inside precipitated and benefited from the regulation, manipulation, and opportunity that their redistribution housing policy yielded.

Dennis Prager quoting Mark Steyn asks a very serious question

As to white-collar crime, what about the one type of white-collar crime that goes entirely unpunished? For an accounting fraud of $567 million, Enron’s executives went to jail, and its head guy died there. For an accounting fraud ten times that size, the two Democrat hacks who headed Fannie Mae and Freddie Mac, Franklin Raines and Jamie Gorelick, walked away with a combined taxpayer-funded payout of $116.4 million.

Fannie and Freddie are two of the largest businesses in America, but they’re exempt from SEC disclosure rules and Sarbanes-Oxley “corporate governance” burdens, and so in 2008, unlike Enron, WorldCom or any of the other reviled private-sector bogeymen, they came close to taking down the entire global economy

A few players got nailed but the big fish escaped. Those that did faced prosecution have largely been ignored politically in the press.

Wall Street Journal:

Countrywide Financial Corp.’s “friends of Angelo” program provided sweetheart loans to key banking players in Washington, D.C. They included former Fannie Mae chief executive Jim Johnson, Senate Budget Committee Chairman Kent Conrad (D., N.D.) and Senate Banking Committee Chairman Christopher Dodd (D., Conn.).

The growing scandal surrounding the “friends of Angelo” loans (so-called by company employees, referring to Countrywide CEO Angelo Mozilo) should serve as a political wake-up call. Yet the Senate appears intent on pushing forward legislation, co-authored by Sen. Dodd, that would bail out the worst actors in the subprime mortgage banking industry.

Obama Pretends to Be Above it All

Adding insult to this scandal, Barack Obama appears to be above the fray as he runs around saying things like this, noted in a WSJ article:

Campaigning in Lancaster, Pa., on March 31, Sen. Barack Obama blamed Countrywide’s CEO for “infecting the economy and helping to create a home foreclosure crisis.”

We informed in part I of Obama’s early involvement in securing these home loans through legal intimidation; now his involvement in the legislation to bailout the complicit lenders shows he is not above the fray at all but in the lead.

Recorded in Wikipedia:

The law (Dodd-Frank) was initially proposed by the Obama Administration in June 2009, when the White House sent a series of proposed bills to Congress. A version of the legislation was introduced in the House in July 2009. On December 2, 2009, revised versions were introduced in the House of Representatives by Financial Services Committee Chairman Barney Frank, and in the Senate Banking Committee by Chairman Chris Dodd. Due to their involvement with the bill, the conference committee that reported on June 25, 2010,[1] voted to name the bill after the two members of Congress.

The originators and beneficiaries of the housing and lending debacle thus get to appear as saviors in the situation when they should have been prosecuted or at the very least run out of town on a rail.

This slight of hand was designed to fool the American people about the causes of the housing crisis and banking crash. We will soon find out how completely the American people have been fooled. If we re-elect Obama we can only blame ourselves for continuing the corruption that put us in this mess.

As we might have predicted Obama, Frank and Dodd crafted a financial overhaul bill that provided Countrywide and others with $300 billion in new taxpayer loan guarantees. And as Wikipedia also informs, the “bill will allow troubled financial institutions to foist the riskiest mortgages in their portfolios onto the Federal Housing Administration (FHA) — ultimately putting the American taxpayer on the hook for their bad bets.”

That’s how the big boys do redistribution!

Looking back once again for perspective and context Atlas Shrugs offers a window into the immediate handling of the crisis:

Rep. Paul Kanjorski of Pennsylvania explains what former Treasury Secretary Paulson and Fed Chairman Bernanke told congress during the September 2008 closed door session. During the first third of the video (C-Span video no longer available) an enraged caller is ranting to Rep. Kanjorski about how wasteful the first $700 billion bailout was. The best part is 2 minutes and 15 seconds into the tape where Rep. Kanjorski reveals what Paulson and Bernanke told congress that shocked them into supporting the first $700 billion bailout.

Rush Limbaugh captured the dialogue:

KANJORSKI: On Thursday at about 11 o’clock in the morning the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States, to the tune of $550 billion was being drawn out in a matter of an hour or two. The Treasury opened up its window to help. It pumped $105 billion in the system and quickly realized that they could not stem the tide; we were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn’t be further panic out there.

RUSH: Do you remember this? This is the day I think that the Atlanta banks ran out of one-hundred-dollar bills. But now stop and think of this: A $550 billion withdrawal from money market funds in one-to-two hours. I am convinced — and there’s one more sound bite to go here — I am convinced that this is what they took to the White House and said to President Bush, “We have got a disaster, you have got to get on board with a bailout,” which came later on in October, “you’ve got to get on board with this $700 billion, the TARP 1,” all because 550 — now, what precipitated this? Here’s the second Kanjorski sound bite.

KANJORSKI: If they had not done that, their estimation was that by two o’clock that afternoon, five-and-a-half trillion dollars would have been drawn out of the money market system of the United States, would have collapsed the entire economy of the United States, and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it. We’re really no better off today than we were three months ago because we’ve had a decrease in the equity positions of banks because other assets are going sour by the moment.

RUSH: Now, this is January 27th, Kanjorski is talking about this, and we have to allow, since Kanjorski is a Democrat he’s part of the Pelosi team, we have to allow that some of his comment here is being flavored. When he ends up saying we’re no better off today than we were three months ago, some of this is obviously oriented toward panic and getting people to go along with the bailout today, but let’s leave that aside because that’s traditional Democrat Party politics. If they had not done that, if that $550 billion-dollar withdrawal in an hour or two had not been stopped, if they hadn’t closed the windows, he says that five-and-a-half trillion would have been drawn out of the money market system of the United States. Now, when I hear money market I think of savings accounts, higher interest rates than passbook savings at the old downtown building and loan where people park their money temporarily ’til they decide where to put it permanently. He says five-and-a-half trillion would have vanished from the banking system, would have collapsed the entire economy of the US and within 24 hours the world economy would have collapsed.

Now, we’ve gotta allow here for some exaggeration. It’s amazing this was said on C-SPAN on Thursday, January 27th, and nobody picked up on it. We got it from a website called LiveLeak. They were rummaging through things, and they found this. Now, let’s assume for a second here that elements of this are true. Let’s assume that there was a $550 billion run, electronic run on the banks and money market accounts in one to two hours. The question is who was doing this? Who was withdrawing all this money? And the next question is why? That’s where my mind starts exploding, and this is dangerous to have these explosions going this way. Could it have been George Soros? Could it have been a consortium of countries — Russia, China, Venezuela — countries that are eager to have Barack Obama elected because they know that will make it easier for them to continue their own foreign policies in the world? …(emphasis mine)

What followed? “Save your butt” investigations, private deal-making, bailouts:

Look Who’s Buying Indy Mac – The American Thinker:

The FDIC has just announced that a consortium of private equity and hedge fund firms would be buying IndyMac. IndyMac was an independent “bridge bank” spun off of Countrywide Mortgage in the late 90s. IndyMac acted as a “bridge bank” to Fannie Mae and Freddie Mac.

New York Democrat Charles Schumer precipitated the fall of IndyMac in May of 2008 by releasing “inside” information that the mortgage company was in dire financial straits.

This disclosure created the initial “bank run” that is credited by many economists as the initial trigger that prompted the current mortgage crisis. The FDIC took over the operations of IndyMac in late summer of 2008.

So much for history. George Soros is in on the deal to buy IndyMac from the FDIC.

Soros has a long history of making loads of money by first creating a financial crisis and then stepping in to grab up the bargains. Perhaps the most famous example of this tactic is “Black Wednesday,” when Soros nearly sunk the entire economy of Great Britain through currency speculation.

George Soros has helped bankroll the campaigns of the Democrats in Congress who created this mess. Now, it appears, he is cashing in on his investment.

Let’s tie this all together. During the Clinton years, following legislation to increase housing loans to the poor, a “bridge bank” between Countrywide and Fannie Mae was created. That term ” bank”bridge indicates a pathway to move what they knew would be toxic loans from a private sector complicit bank to the government backed Fannie Mae. Then when it all started to unravel, and with a little push from Schummer a “crisis” is begun in which GWB is pressed to make a big investment to “save” the situation…it’s a twofer…they can also demonize Bush in the process. It’s all possible with the help of a big democrat promoter and funding machine Mr. George Soros. And get this…it ain’t news! Not one journalist on the “A” list of journalists could or would bother to see a pattern in this.

Wall Street Journal:

“Never let a serious crisis go to waste. What I mean by that is it’s an opportunity to do things you couldn’t do before.”

So said White House Chief of Staff Rahm Emanuel in November, and Democrats in Congress are certainly taking his advice to heart. The 647-page, $825 billion House legislation is being sold as an economic “stimulus,” but now that Democrats have finally released the details we understand Rahm’s point much better. This is a political wonder that manages to spend money on just about every pent-up Democratic proposal of the last 40 years.

We’ve looked it over, and even we can’t quite believe it. There’s $1 billion for Amtrak, the federal railroad that hasn’t turned a profit in 40 years; $2 billion for child-care subsidies; $50 million for that great engine of job creation, the National Endowment for the Arts; $400 million for global-warming research and another $2.4 billion for carbon-capture demonstration projects. There’s even $650 million on top of the billions already doled out to pay for digital TV conversion coupons.

In selling the plan, President Obama has said this bill will make “dramatic investments to revive our flagging economy.” Well, you be the judge. Some $30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects. There’s another $40 billion for broadband and electric grid development, airports and clean water projects that are arguably worthwhile priorities.

Add the roughly $20 billion for business tax cuts, and by our estimate only $90 billion out of $825 billion, or about 12 cents of every $1, is for something that can plausibly be considered a growth stimulus. And even many of these projects aren’t likely to help the economy immediately. As Peter Orszag, the President’s new budget director, told Congress a year ago, “even those [public works] that are ‘on the shelf’ generally cannot be undertaken quickly enough to provide timely stimulus to the economy.”

The Democrats wanted to be in control. They created and then used a crisis to win the White House and a super majority Congress (after the victory they didn’t need a single Republican vote to pass any bill)!

SPIN THE STORY:

This crisis would not go to waste IF the crisis could be blamed on George W. Bush, Wall Street, and the greedy 1%!

Let’s look for indications of posturing for political advantage! Did they use this crisis to bring down and destroy President Bush and his party? Did they use it to create division, pitting the have not’s against “Wall Street”? The following are samples of the many voices that took up spin control of the narrative:

“Consider the terrible consequences of the ‘anything goes’ Bush Administration, whose irresponsible non-regulation of financial institutions has led to this crisis.” – Newly installed Speaker of the House, Nancy Pelosi

Time Magazine:

From the start, Bush embraced a governing philosophy of deregulation. That trickled down to federal oversight agencies, which in turn eased off on banks and mortgage brokers. … Plus, let’s face it, the meltdown happened on Bush’s watch.

Media Research Center:

The left-wing site Salon published on Sunday a 3,000-word excerpt from an essay by Paul Krugman and Robin Wells (his wife) published in The Occupy Handbook, a collection of essays from a spray of left-wing economics writers (plus Tyler Cowen) released yesterday in support of the leftist sit-in. From the book description at Amazon: “A guide to the occupation, THE OCCUPY HANDBOOK is a talked-about source for understanding why 1% of the people in America take almost a quarter of the nation’s income and the long-term effects of a protest movement that even the objects of its attack can find little fault with.”

Under the full headline “Economy killers: Inequality and GOP ignorance — By failing Econ 101, Republican leaders failed the country and repeated the errors that caused the Great Depression,” Krugman and wife spent almost 3,000 words blaming conservatives for the “rising inequality” that has caused an ineffective response to the financial crisis of 2008. In other words, don’t blame Obama, but “the right.”

America emerged from the Great Depression and the Second World War with a much more equal distribution of income than it had in the 1920s; our society became middle-class in a way it hadn’t been before. This new, more equal society persisted for 30 years. But then we began pulling apart, with huge income gains for those with already high incomes. As the Congressional Budget Office has documented, the 1 percent — the group implicitly singled out in the slogan “We are the 99 percent” — saw its real income nearly quadruple between 1979 and 2007, dwarfing the very modest gains of ordinary Americans. Other evidence shows that within the 1 percent, the richest 0.1 percent and the richest 0.01 percent saw even larger gains.

By 2007, America was about as unequal as it had been on the eve of the Great Depression — and sure enough, just after hitting this milestone, we plunged into the worst slump since the Depression. This probably wasn’t a coincidence, although economists are still working on trying to understand the linkages between inequality and vulnerability to economic crisis…..

So how did we end up in this state? How did America become a nation that could not rise to the biggest economic challenge in three generations, a nation in which scorched-earth politics and politicized economics created policy paralysis?

We suggest it was the inequality that did it. Soaring inequality is at the root of our polarized politics, which made us unable to act together in the face of crisis. And because rising incomes at the top have also brought rising power to the wealthiest, our nation’s intellectual life has been warped, with too many economists co-opted into defending economic doctrines that were convenient for the wealthy despite being indefensible on logical and empirical grounds.

Suddenly the Occupy Movement was in the streets!

Now we know how the dreamers, mop tops, and miscreants in the streets got their talking points! The spin is gobbledygook. It sounds impressive and erudite but fails to truthfully inform! The propaganda device created by Paul Krugman and Robin Wells was used to create chaos and confusion, a typical socialist practice.

What are the pronouncements against George Bush and Republicans based upon? First of all they were based on conditions and a crisis created by a criminal Democrat machine! But the sound bite used for proof was a statement Bush made early in his presidency and others like it:

“We can put light where there’s darkness, and hope where there’s despondency in this country. And part of it is working together as a nation to encourage folks to own their own home.” – President George W. Bush, Oct. 15, 2002

Find this quote in the following spin hit piece piece in the New York Times which avers:

There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.

But the story of how the United States got here is partly one of Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.

From his earliest days in office, Bush paired his belief that Americans do best when they own their own homes with his conviction that markets do best when left alone. Bush pushed hard to expand home ownership, especially among minority groups, an initiative that dovetailed with both his ambition to expand Republican appeal and the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.

Bush’s making? Poppycock! Creating underhanded ways to redistribute money in the form of housing opportunities, radical lending practices, and poisoning securities to mask the ruse was all initiated and facilitated by high powered Democrats in and out of government!

“Hands off approach”? Wrong! We chronicled the warnings and many attempts by the Bush administration to get Congress to firm up regulations to prevent the meltdown in part one in this series.

“Pushed hard to expand home ownership”? Wrong again! No responsible journalist could make a claim like this about Bush without also detailing the “push” made by Obama, Clinton, Frank, Raines, et al in the Democrat re-distribution machine over several decades…including during the Bush years when they purposely refused to follow his advice!

Let’s face it America…much of our press is not into practicing journalism. They prefer partisan promotion and providing cover. Some of them, I have no doubt, are active participants in the game. The writers of this piece were not delusional…they were schilling for Obama, Clinton, powerful Democrats in Congress and the wealthy patrons that act as their promoters.

Baseless accusations against Bush have been leveled again and again over the last four or five years as cover for the underhanded redistribution policies and greed of the Democrat Party and big money thugs like George Soros.

Their purpose is twofold: 1. Gain untold power so as to, 2. Transform the United States of America! The tactic, almost like an inside joke, would become their crowning glory:

The corrupt Democrat party does not represent the American people or the best interests of our country.

They are little more than a mob of criminal thugs that will do anything, including destroying the wealth and opportunity of the American people, for their own personal power and financial gain.

No! The financial crisis and housing bubble were not Bush’s fault.

And what about the lousy economy since the recovery?

The National Bureau of Economic Research, the arbiter of the start and end dates of a recession, determined that the recession that began in December 2007 ended in June 2009.

The business-cycle dating committee met by phone on Sunday and came to the determination. “In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month,” the committee said in a statement. The 2007-2009 recession is the longest in the post-WWII period.

The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007. The basis for this decision was the length and strength of the recovery to date.

Does that mean this is the Obama recession? William a. Jacobson explains:

This means two things.

First, Obama’s economic policies had nothing to do with the end of the Bush recession, since the recession ended 5 months after Obama took office and before any of his policies, including the February 2009 Stimulus Bil, had come into effect. So Obama gets zero credit for the end of the Bush Great Recession.

Second, Obama owns the failed recovery from the recession. It took place entirely on his watch, and during a time period when Obama’s policies and threatened policies were a factor.

Obama’s failed policies have created the impression in a majority of people that the recession continues, but what we need to get people to understand is that they are experiencing Obama’s Great Failed Recovery, not Bush’s Great Recession.

The Obama campaign has already started the explanations for his conundrum…he just needs more time…just need a little more time…FORWARD!

We cannot afford more time for Mr. Obama; he’s done quite enough already, thank you! It is time to send him and his complicit cohorts packing!

And now I beg you Indulge me in a small but meaningful aside:

The Clinton’s have, or have had, Cayman Island accounts:

Securities and Exchange Commission documents and financial- disclosure forms filed by Hillary Clinton show that Bill Clinton, 61, has a financial stake in three investment entities registered in the Cayman Islands by Burkle’s Yucaipa Cos. LLC.

In 2004, Hillary Clinton, a New York senator, said she wanted to close the “loopholes” for “people who create a mailbox, or a drop, or send one person to sit on the beach in some island paradise and claim that it is their offshore headquarters.”

Bloomberg confirms this information and adds:

When he left the White House in 2000, Bill Clinton reported assets of more than $1 million and legal fees of more than $2.4 million. In his wife’s most recent disclosure, Hillary Clinton reported that the couple now has a net worth estimated at between $17.4 million and $53.7 million.

Both now claim to be uneasy about their place among the richest Americans. This “new experience,” Hillary Clinton said during a debate Oct. 30, isn’t “one that makes us very comfortable.”

I’ll bet! Bill Clinton took to the stage at the DNC Convention to make a speech for President Obama. Hillary was nowhere to be seen…off in a foreign country doing her duty as Secretary of State. Bill Clinton has no great love for the man that knocked Hillary out of the race when it was her turn to rule in DC. Clinton made this speech because if Obama wins in November the 2016 election will be open…there will be no incumbent to stand in Hillary’s way. But the Clintons have been major players in the housing debacle that ruined our economy and I hope you will remember that as you consider the choices for president.

The left destructo machine, whose job it is to smear the good names of two good men, Bush and Romney, had better be prepared for MAJOR BLOWBACK! We are armed and ready to do battle here at Post Scripts.