Economic Bailout
While I believe SOME kind of economic recovery plan needs to be passed to minimize the problems brought on by the current problems in the financial markets, I do NOT believe we can trust all of Congress to solve a problem that they, themselves, brought on. If a rush plan is implemented it is far more likely to contain a grab for money just like any other legislative action. THIS is a time for the more upstanding, conscientious members of Congress to dig in an REFUSE to support anything close to “business as usual”.
In other words, I don’t want any corrective action unless it is TRULY corrective and contains NO other activity, such as earmarks for any other purposes, proposals to require involvement of union leaders in some kind of business oversight, or money allocated to any outside organizations like Acorn… all of which WERE parts of earlier drafts of a “solution”. And people throughout the country objected LOUDLY. WE can easily SEE what’s going on… yet another power and money grab. Not that there’s ever a time for such activity, this is CERTAINLY no time for it.
Too many in Congress see this financial situation as a chance to play politics as usual. Once again, they have nothing but the interests of themselves and their party at heart… they have once again put you and me and our country BEHIND their interests. These are the people who need to get another job. Their honor and integrity are rubbish… they should be thrown out of Congress.
One way or another, I’m confident we’ll get over this current financial hurdle. Remember, while it’s a big problem, this is just a SECTOR of our overall economy… not the ENTIRE economy… that is in trouble. The question remains: why?
I’ve already discussed the origins of the problem:
Congress interfered with traditional, conservative lending practices… where past credit and the ability to repay were the key criteria in determining if a loan should be approved or not… and began to push banks and mortgage companies to lend to people with lesser financial means, based largely on where they lived.
Compounding the problem were quasi-government organizations, FNMA and FHLMC, that had the backing of the government … and that would buy these loans…. but had inadequate financial oversight. So, lenders could loan and then sell the mortgages to these companies… they made money and the risk of a loan that might not get repaid was passed along to others. These buyers of loans encouraged more such loans… a vicious cycle.
FURTHER compounding the problem is the intricate world of finance, where groups of mortgages would be bundled into a theoretical “stock” (mortgage-backed security) and shares in the big bundle were sold to others, such as insurance companies, mutual funds, and even individuals. So, the market of so-called “safe” securities… safe because they are backed by the government through the auspices of Fannie Mae and Freddie Mac… just increased the buyer market, which meant even more funds were available to make more loans to marginal home buyers.
ADD to all of this A FEW (but certainly not as many as has been implied) crooked players at any given stage in this process and you have a real mess. Some home buyers had no income but put on paper that they had adequate income, some put no money down and had no intention of ever paying the loan (looking only to live free in a home until evicted). Some mortgage brokers forged documents or aggressively pushed unsuspecting individuals into borrowing more to buy a home than they could afford. Some on Wall Street were aware of questionable practices “downstream” in the process, but continued to play (some very strongly) in the market. Some institutional buyers of mortgage-backed securities knew that some portion of the loans underlying their investments was shaky but didn’t care since they were guaranteed by the government, and so on.
This “perfect storm” of a financial disaster has now come to a head. Sadly, many started raising questions about many aspects of the situation YEARS ago… but were shouted down by proponents of the process. SOME Congressional members TRIED to reform FNMA and FHLMC but were thwarted at every turn. SOME Congressional members tried to keep politics out of the core lending practices in the first place, but were outnumbered by those who believed government not only could, but SHOULD, make companies lend to those who were less likely to be able to repay their loans.
So, is it any real surprise that these problems came to the surface? The only thing I’m surprised about it is HOW LONG it took! I thought it would have “blown up” long ago.
To the point: where are the Congressional investigations about WHY the problem started and WHO contributed to it. I want this to become PUBLIC INFORMATION so the people will know… and can decide if they want to re-elect those who were DIRECTLY INVOLVED in this… those who advocated the policies that led to the current situation.
WE WANT A PUBLIC CONGRESSIONAL HEARING! Let’s find out who caused this! Name names.
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