Mortgages, Bailouts and things, UPDATED

I was bickering with a friend of mine the other day about the mortgage crisis, about the evil bankers who had lured the poor benighted masses into taking loans they couldn’t afford. About the horrible monsters in Washington ignoring their duty to reign in the crimes of these monstrous bankers devouring the first time home buyer’s and their dreams.

Rather, that’s what he was saying. Needless to say he was somewhat disappointed when I failed to immediately concede to his wish to regulate the industry out of existence.

There is another story to be told about the mortgage crisis, and those darn “liar’s loans” and so forth.

Does anyone remember, way back in the heady days of the 90′s when Clinton was President and the markets only went up? Anyone remember how then the problem was those darn banks discriminating against the poor, the undocumented folks who couldn’t apply for a regular loan? Anybody remember Redlining?

The elephant in the room of this whole scandal is simple to see if one remembers and thinks. In the 90′s the Clinton HUD and the Clinton Justice Department leaned on banks to make more loans to “the poor” or they were gonna get hit with racial discrimination law suits (“Racist! Racist!” being the favorite crime of the Left then as now). The tacit agreement was this; The Banks make bad loans and the Government through Fannie Mae and Freddie Mac buys up the questionable debt to spread the risk around. If things go south, it’ll be too huge to let everything collapse and the Government will come in and bail everybody out.

Now, in an election year no less, the check has come due and everyone on the Left conveniently forgets they blackmailed the Banks into making all these crap loans and decries “corporate welfare” as loudly as they can.

Those in the mainstream media who acknowledge the government’s role in the mess conveniently forget where it all started in their zeal to blame everything on Bush, but let’s put this baby on the correct parish doorstep, alright?

Here’s some links on the subject: pegs it, here. Also here. They’ve got tons of stuff so just go there and start clicking. h/t DrewM. at Ace.

Here is the Washington Post piece.
This is not a case of markets letting people down, it’s a case of government coercion distorting markets to achieve a policy goal and then running for cover when the bill comes due.

UPDATE:  And wowsers.  Who’d a thunk that Obama’s favorite fascists, ACORN, were involved in the Freddie fiasco?

Which brings us to the Fannie Mae Foundation. A sweet little set up for handing out cash to a nice little outfit called ACORN among others. Here are a few of the grants to ACORN.

ACORN Housing Corporation-National
Chicago, IL $100,000 approved in 2004
General operating support of an organization that helps families of limited means to secure and protect decent housing by providing housing counseling services, building homes, and educating policy makers in Chicago, IL; Phoenix, AZ; and Brooklyn, NY

Wow.  That’s a huge post, and rambling but it joins a lot of this mess to Obama directly which I wasn’t doing before.  As they say, read the whole thing. h/t The American Thinker.

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