Obama: Eyes Wide Open

The American public is punishing John McCain for what they think are the sins of the current administration; Obama has gained a few points in the polls lately, largely due to the financial crisis.

This Wall Street Journal headline and sub-head says it all: “Independent Voters Move Toward Obama; New Poll Indicates That Democrat Ticket Is Benefiting From Financial Crisis” (link)

People ought to get out of their cocoons a little bit more. They’d learn lots of valuable things, interesting things, like how Barack Obama used to sue banks on behalf of ACORN, for not making dumb mortgage loans to people who can’t afford to pay them.

I’m no expert on financial matters, but from what I’ve read, here is the Reader’s Digest version of what happened.

Obama was part of the machinery that helped create this mess, by using legal blackmail sanctioned by government edict and regulators, to encourage banks to take risks with their money that they wouldn’t otherwise take. Even the Fed issued new regulations, including this dumb-as-a-post policy: “discrimination may be observed when a lender’s underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower–income minority applicants.” These resulted in “ninja” loans: no income, no job, no assets. Hahahaha, oh that’s so … not funny.

But the lenders knew they could unload these bad mortgages onto Fannie Mae and Freddie Mac; you know, the same Fannie Mae and Freddie Mac that Barney Frank (and other politicians who were on their payroll) said were just fine, right up until they crashed. Guess who else got lots of their cash? Barack. Obama. The same Fannie Mae and Freddie Mac that were run by corrupt hooligans that then hooked up with the Obama campaign: Jim Johnson and Franklin Raines. Boy, what a coincidence!

So all this cash flowing into this market pushed up demand, and therefore artificially raised housing prices. This is, as economist Thomas Sowell explains so well, what always happens when government subsidies affect economic markets. And when that government money flow disappears, for whatever reason, the prices fall, and people who bought when it was high get burned. Whatever you want to call this, it is not a free market, so you can’t blame all the fallout from it on “free markets”.

Then a couple of years ago, some homeowners started defaulting; this caused the mortgage market to tighten up as well, which then brought prices down, and boom, the bubble of artificially high housing prices burst. People were now underwater on their mortgages, and since interest rates had risen as well, they couldn’t pay and they couldn’t sell. Housing crisis.

Then various financial market troubles ensued, caused by not just the mortgages themselves, but also by complicated financial derivative instruments that were based on the value of some of these mortgages. Lather, rinse, repeat. It bubbled up to stock prices, and now there is little confidence in the entire financial sector, and the Dow is down 13% in 3 days.

Accounting regulations introduced by Sarbannes-Oxley enforced a very aggressive devaluing of these instruments, to the point where even though their value had fallen by say 20 or 30%, they were required to be valued at just about zero.

And so here we are.

So let’s have a frank talk, for a minute. This was a goofy social redistribution theory spawned by economic dipsticks who pretended that real risks, like lack of income and lack of credit history, can be safely ignored as long as your motives are pure enough, and/or the money loaned out is ultimately not yours in the first place.

Yet Obama now plays ignorant, and says Bush and his “failed policies” alone caused the current financial mess. Even though there is zero evidence that Bush had anything to do with any of it. And what evidence there is says he tried to fix the scams that were going on at Fannie and Freddie, in 2003, but brave Congressmen like Barney Frank — say, what is he, a Dem, right? — with one hand out for money and the other hand, well, just you never mind where that other hand was, but brave Congressmen like him prevented it. Thanks for that.

Also, it’s funny how little interest the media has in this whole back story. But hey, lookee here … we are being lied to on a consistent basis by the media, too!

Lies of omission are just flying all over the place.

You’d almost think the media wants Obama to win, and is actively covering up stories that are actually provably, demonstrably, historically true.

But the press is too busy going thru dumpsters in Alaska and Arizona to write a basic story, like the above, that just assembles facts already in the public record.

Too busy … going thru dumpsters … to write a simple story … that assembles known facts … in a non-partisan manner.

I’m not sure how you spin this except in the most obvious way: the media doesn’t want their candidate to lose. And who can blame them? We all want our candidates to win. That’s how partisan politics works.

So I guess it’s good to know that the media is now officially part of the Obama campaign, dirty tricks department. They could call themselves the plumbers …oops, that name is already taken. Oh, the irony!

If folks want to vote for Obama because they think he’d fix any of this mess, they might want to think again. Frankly, all of Congress is part of the problem, but Obama and his pals are at the head of the line of guys with their hands out.

He’s part of the problem, not part of the solution.