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Recently I was in a conversation about the economy and a person who was listening got angry claiming I was blaming it on President Obama. This was not my intention.
I believe this whole problem is not Republican nor Democratic caused, but due to liberals believing all families should own a home, if they could afford it or not. While this is a high ideal, it caused this meltdown of our financial system.
The banks were encouraged to give mortgages to families who could never afford them. They lowered the criteria for loans from one-third of their income for the payments to almost nothing. They did not require 10 percent down any longer but gave zero down loans. They lent money to families that could never make the payments and the government guaranteed them through FNMA. This is a wonderful concept, but financial suicide. Now these people have lost their homes and the taxpayers are having to cover the losses.
I owned a rental in California and listed it for sale. The tenant, who had trouble making the rent, got a loan to buy it. The payments were almost twice the rent so we were amazed she got the loan. She soon lost the home. This was not a good thing for her or the taxpayers to be led to believe she could afford it.
Again this is not a Republican vs. Democratic issue but a liberal vs. conservative issue. I pray it never happens again.
BOB UHL
Grand Junction
12 Responses to “Financial crisis is not a Republican vs. Democratic issue”
Posted March 13th, 2009 at 5:47 pm Login to Send PM Report this comment
When banks sell mortgages they have no incentive to make sure the customer can afford to make payments. It’s not the banks’ problem, in fact, they have every incentive to make as many loans as possible, not ask too many questions, and sell the risk down the line to the next fool.
Then financial companies got involved in derivatives and there was no one holding them accountable, so they risked our 401(k)s to make a bundle. They made millions and we lost most of our retirement.
No sir, it’s not because liberals wanted to risk their 401(k)s by giving loans adjustable rate mortgages to people who could never aford them once the rate “adjusted.” Bankers sold these mortgages by selling customers on the idea that the value of the property would increase by 30-40% and they would be able to refinance with more favorable rates. Well that just didn’t happen when these customers found themselves upside-down on their mortgages.
It’s neither Domocratic or Republican, but extremely short-sided and greedy business practices taking place under the nose of regulators.
Oh sure, you’ll blame Barney Frank, and Chris Dodd because they didn’t want to see Fannie and Freddie subjected to any more regulation than Lehman Brothers, Bear Stearns, Goldman Sachs . . . That was a big mistake, but Fannie and Freddie didn’t bring down this house of cards we call a finance industry. Neither did liberals.
Oddly, the person who seems to be asking the most penetrating questions is Jon Stewart. http://www.thedailyshow.com/video/index.jhtml?videoId=220534&title=intro-brawl-street-get-ready-to
No, it shouldn’t have been the Daily Show asking these questions and hind sight is 20 20.
For those of you who I know are going to respond, I hate Kool Aid, and I’ll draw my conclusions based on the evidence thank you very much. I question EVERYTHING and so should you.
Posted March 13th, 2009 at 7:25 pm Login to Send PM Report this comment
Letter writer: “I believe this whole problem is not Republican nor Democratic caused, but due to liberals believing all families should own a home, if they could afford it or not”
If the letter writer chooses to “believe”, he should base his “beliefs” on facts, and not ideology. Nor should he resort to undefined and abstract terms such as “liberal” or “conservative” when he quite obviously has not understanding of either term.
The gentleman should pay much closer attention to the news, and who says what. He might have noted, as some of us did, that one of the “mantra” of the George W. Bush administration was for the “creation of an ownership society” Let not the gentleman try to revise history, or select from it what suits his ideological or partisan objectives. He should, as many of us have, done our homework on this, and many other issues.
As to “liberalism” and “conservatism”, two of the most misused terms in the political discourse of theis country, most individuals have not the slightest inkling of what they mean, or know how to apply them. Rather, all most do is package those terms in but emotional terms of “good” or “bad”, paying little attention, and most times caring even less as to what they are trying to “conserve” or “liberate”, in what area, and what it means if they do.
It would seem to some of us that, while we may hear and read many things, so many of them are “gossip” or “I believe” or “I feel”, as to make any seriously reasonable person recoil at the shallowness all of those exhibit. A lot more effort should probably be expended in study, thought and reflection, than in wanting to “noticed.”
The letter writer, Mr. Uhl, it would seem, belongs in the latter category.
dgadbc responded: “..Oh sure, you’ll blame Barney Frank, and Chris Dodd because they didn’t want to see Fannie and Freddie subjected to any more regulation than Lehman Brothers, Bear Stearns, Goldman Sachs . . ”
The responder was accurate. We wonder where the letter writer was when all of this was happening. Where was he “enjoying la dolce vita”? And, now that we are faced with a mess, actually several messes, he (and not only he but many) needs someone else to blame. That is all too convenient.
Posted March 13th, 2009 at 10:09 pm Login to Send PM Report this comment
RLaitres: “He might have noted, as some of us did,”
“He should, as many of us have, done our homework on this, and many other issues.”
“It would seem to some of us that”
“We wonder where the letter writer was”
I thought RLaitres was an individual. It appears, however, that RLaitres is a group.
It appears that this group always accuses anyone with whom it disagrees, of not understanding the word “liberal”. Such accusation by the Laitres group never arises when someone on the same political wavelength as the Laitres group uses such word. I, and pehaps others, wonder why that might be?
Posted March 14th, 2009 at 8:05 am Login to Send PM Report this comment
Bullishfrog, why don’t you try addressing some of Rlaietres points instead of instulting him. I know addressing arguments requires thought and evidence, when it’s so much fun just to take cheap shots.
Come on, show us you have some ideas of your own.
Posted March 14th, 2009 at 9:06 am Login to Send PM Report this comment
dg, there is no one on this board who is more offensive than Laitres. So don’t talk to me about insults.
And there was no insulting in my post. I want to know who RLaitres is. Since it is posted as “us” or “we”, is this a group or is this an individual. If this is a group, who elected the individual as its representative.
Posted March 14th, 2009 at 10:21 am Login to Send PM Report this comment
My complaint, bullishfrog, is that you didn’t answer his arguments. I’ve followed your comments and I know you have ideas of your own.
Who RL is is his/her/their own business. If RL gives insult, call him/her/them on it and explain why you find it offensive.
This is a wonderful forum for exchange of ideas and I want to hear yours. I won’t always agree with you, but I promise you BF, you always make me think and that’s a good thing.
And yes, RL, you do come off a tad pompous at times. You can call me out on that if you feel I’ve offended you. That being said, most of us who comment here are not professional writers; we make grammatical errors, misspell things, misplace our modifiers, you name it, but most posters do write well enough to support their arguments.
My my, that all came off a bit preachy, didn’t it.
Posted March 15th, 2009 at 11:43 am Login to Send PM Report this comment
dgadbc says, “Who RL is is his/her/their own business. If RL gives insult, call him/her/them on it and explain why you find it offensive.”
In most arenas that would be the ideal. However, in this forum, RL has made it his business to critique the intelligence and educational background of most other writers - sometimes without offering a shred of his own opinion about the actual topic. All elitist, pseudo-intellectual personal attacks are offensive. But to call out the offenders, each and every time, gives them exactly what they want. Attention and distraction from the topic at hand.
So back to the topic(s) at hand:
RL should take his own sage advice when he says,
“The gentleman should pay much closer attention to the news, and who says what. He might have noted, as some of us did, that one of the “mantra” of the George W. Bush administration was for the “creation of an ownership society” Let not the gentleman try to revise history, or select from it what suits his ideological or partisan objectives. He should, as many of us have, done our homework on this, and many other issues.”
Clearly before the rise of “Bush did it” mentality (a victim ideology in it’s own right) - the roots of the housing crisis we see today can be found in the “Community Reinvestment Act” of 1977. And although it’s pretty obvious there’s plenty of blame to go around, I think it’s fair to say that - if there was one thing that started us down this road, without which we wouldn’t be here, it’s government intervention in the housing market, starting with the CRA. A fine philosophical idea, but based in social justice and socio-economic engineering rather than the common sense, free market financial principles that have historically made the US economy the strongest in the world.
All in all, there is plenty of evidence of plain old “get something for nothing” greed, with all levels of the economic spectrum involved - from non-citizens simply walking away after living payment-free from the get-go, to people who refinanced to buy a new car or other luxuries they could never have afforded any other way, to high powered investment bankers selling worthless securities.
This article in Forbes explains it pretty well:
http://www.forbes.com/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html
An excerpt:
“It is popular to take low lending standards as proof that the free market has failed, that the system that is supposed to reward productive behavior and punish unproductive behavior has failed to do so. Yet this claim ignores that for years irrational lending standards have been forced on lenders by the federal Community Reinvestment Act (CRA) and rewarded (at taxpayers’ expense) by multiple government bodies.
The CRA forces banks to make loans in poor communities, loans that banks may otherwise reject as financially unsound. Under the CRA, banks must convince a set of bureaucracies that they are not engaging in discrimination, a charge that the act encourages any CRA-recognized community group to bring forward. Otherwise, any merger or expansion the banks attempt will likely be denied. But what counts as discrimination?
According to one enforcement agency, “discrimination exists when a lender’s underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.” Note that these “arbitrary or outdated criteria” include most of the essentials of responsible lending: income level, income verification, credit history and savings history–the very factors lenders are now being criticized for ignoring.
The government has promoted bad loans not just through the stick of the CRA but through the carrot of Fannie Mae and Freddie Mac, which purchase, securitize and guarantee loans made by lenders and whose debt is itself implicitly guaranteed by the federal government. This setup created an easy, artificial profit opportunity for lenders to wrap up bundles of subprime loans and sell them to a government-backed buyer whose primary mandate was to “promote homeownership,” not to apply sound lending standards.”
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Posted March 16th, 2009 at 8:45 pm Login to Send PM Report this comment
Bullishfrogs question to RLaitres is hilarious.
Posted March 16th, 2009 at 9:22 pm Login to Send PM Report this comment
JMH-amazing, truly amazing “…..starting with the CRA. A fine philosophical idea, but based in social justice and socio-economic engineering rather than the common sense, free market financial principles that have……. Let’s ask the hard working poor, esp inner city, if they shared in that strongest economy. god forbid that we try to help working people elevate their status. How dare we attempt anything that resembles social justice, especially when it interfers with free market principles! Redlining did occur-standards for loans were not the same across the board-bottom line.
“this setup created an easy, artificial profit opportunity for lenders to wrap up bundles of subprime loans (that they made of their own free will or was it that the bad government made them do?) and sell them to a government-backed buyer whose primary mandate was to “promote homeownership”, not to apply sound lending standards. those poor bankers and wall street firms. That bad government made them abuse an “easy, artificial profit opportunity” by “making” them give bad loans to promote an “ownership society”. Why don’t we just get rid of any form of government and may the strongest survive. After all-you never elected a government, but you have elected a CEO of a bank/wall street firm, right?
Posted March 17th, 2009 at 7:47 am Login to Send PM Report this comment
RL, MPD is treatable!
http://psychcentral.com/disorders/sx18t.htm
Posted March 17th, 2009 at 8:16 am Login to Send PM Report this comment
Simply following your advice RL. You should try doing your homework too.
You stated “….that one of the “mantra” of the George W. Bush administration was for the “creation of an ownership society”, and
“Let not the gentleman try to revise history, or select from it what suits his ideological or partisan objectives.”
So as not to revise history, it is inarguable that GWB was indeed carrying over the mantra for the “creation of an ownership society” from several previous administrations under the spirit of the CRA. In an attempt not to only select what suits the partisan blame game, it should be interesting to note that Clinton said, in November ‘94,
“I think we all agree that more Americans should own their own homes, for reasons that are economic and tangible and reasons that are emotional and intangible but go to the heart of what it means to harbor, to nourish, to expand the American dream.” and
“I am determined to see that you have the opportunity, and together we can make that opportunity for the young families of our country. I am committed to a new and unprecedented partnership between industry leaders and community leaders and Government to recommit our Nation to the idea of homeownership and to create more homeowners than ever before.”
Posted March 17th, 2009 at 10:19 am Login to Send PM Report this comment
Dr. Wright: “RL, MPD is treatable!”
We are happy to learn that Dr. Wright has found a treatment for his/her affliction, and sharing the good news with all of us. We wish him/her well, and a favorable outcome to the course of treatment.
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