As a guest on Jay Leno's new show, Rush Limbaugh stated that the subprime mortgage crisis can be blamed on: Barney Frank, Chris Dodd, Bill Clinton and.....ACORN!?! As my son would say- wow, wow wubsy! Now I thought it was crazy that former President Bill Clinton was blamed for September 11th. I thought it was nuts that Saddam Hussein was blamed for September 11th. And now, I truly feel Mr Limbaugh better put down his handful of oxycontin and fast! To blame a community action organization for the subprime crisis!?!!? Even conservative listeners to my radio talk show agree that is ridiculous! As I said on my program; the financial crisis, subprime housing included is a world wide problem. It began during the Bush administration; and as much as I like to blame GW, even this isn't his fault. Nor is it Clinton's. or Obama's. How about the lenders? Homebuyers? Underwriters? Credit Approval ratings organizations? The reality is that the economy was at risk of a deep recession after the dot com bubble burst in early 2000. September 11th only made things worse. So how did the world respond? Banks tried to stimulate the economy; and not just here in the U.S., but throughout the world. And that pushed investors and lenders to take greater risks. Like lenders approving subprime mortgage loans to borrowers with poor credit or no credit and even some who had no jobs. So it was the consumer's demand that drove the housing bubble to it's all time high in the summer of 2005. And that didn't give a happy ending, that gave us incredibly high foreclosure #'s. So how does ACORN get blamed? How does President Clinton get blamed? For those that say Barney Frank could have regulated these lenders and didn't, let's not forget former President Bush's speech on October 15, 2002 at Georgetown University, when he encouraged those loans being backed by Fannie Mae and Freddie Mac. To paraphrase, he said that lower income people could get good quality homes. And GW Bush was President during the time of this financial fallout. He was the captain of the ship. He cannot have no responsibility, or in this case, blame for this problem. Neither can the top dogs at the Treasury under his command. And back to ACORN.....individuals go to ACORN when they're faced with foreclosure, or after they've lost their home; so how would a ACORN and it's members benefit from a subprime mortgage circus? Wouldn't they basically be screwing themselves to profit from something like this? Most of us never heard of ACORN until about a year ago; before then, ACORNS were little nuts that squirrels munched on!!! Lastly, why cant we ever look in the mirror and blame ourselves? Or in this case our/the borrowers and the lenders greed? Nothing too good to be true is. Too much money too fast isn't a sure thing, it's a bad thing; just ask those that borrowed from Bernie Madoff. Not to be religious here, but the bible doesn't say it's money that is the root of all evil, it is the "love" of money that is. The lenders love their money, so do we, that's how we got here and we didn't it without nuts...I mean acorns.
Leslie Marshall
The Leslie Marshall Show
“The Only True Democracy in Talk Radio – Of For And By The People”
www.lesliemarshallshow.com
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Very well written post... I do however believe that there is some personal responsibility that has to be added to this as well. Many of the people that are losing their homes or walking away from their homes are doing it because they cant stand the fact they lost 40% of value....
ReplyDelete40% of value after the fact they took 40% cash out of their house and bought cars, boats, other houses, etc...
That's not to say that people who didnt take out money or didnt over extend themselves didnt lose theit house or forced to sell at less than the owed amount (short sale) but we need to remember that this all starts with personal responsibility. Nobody stuck a gun to anyone's head and said... take that Negative Amortization Loan....
Well...
ReplyDelete1. Real Estate agencies don't lend money so that point is inaccurate.
2. While I agree with you that greed (yes greed by all players in this case, not just the banks, lenders & politicians but the consumer too) indeed drove this debacle into overdrive, greed was not the motivation or the root cause behind the American dream program or the CRA program which your readers have written about in their comments.
3. So what is the real motivation in my opinion you might be asking. Well, I believe that it's a lot deeper than what seems at the surface. There is a long standing policy in place by men (yes men), very powerful and rich men from wealthy and powerful legacies to become kings. Some of you will get very skeptical at this point thinking I'm just about to espouse a conspiracy theory. Well, the term conspiracy theory has such a marginalized connotation most people can't handle it. So if you're one of those then stop reading on the other hand if you are truly open to ideas then read on.
For these men the desire to be a king is not limited to the shores of America but to become kings of the world. This is a tiny and small group but more powerful than any ever. Their agenda is to have the entire world under their control and while this is a huge task it has several layers and each layer transforms itself every few years. Economic cycles and political cycles transition as their plan is put into motion. Home ownership and real estate has historically proven to be one of the greatest stepping stones to building wealth. What we have witnessed in the last 10 odd years was the systemic transference of wealth from the serfs to the kings.
Let's face it, everyone knows something too good to be true is exactly that and "man" in his infinite wisdom will let temptation get the better of him. In this case millionaires were made just as they were with the dot.com stock debacle only it was an illusion. Those who were conservative and didn't get played are still ok for the most part but those who bit into the apple, (and the power players and their sophisticated systems of marketing, media hype and propaganda knew the probability of how many people would actually bite into the apple) well they as we know have been stripped off their "wealth" - now surely there was some innocent collateral damage too but for the most part here's the scenario.
Many americans who have been defrauded of their wealth will for years have to pay a hefty price for any and everything they buy with a loan. Our economic system is so credit dependent that we cannot afford to have this huge group of people out of the economy for 10 years until their "credit" gets better so we'll definitely continue to loan to these high risk individuals for a premium. Any guesses as to who benefits? Sure the banks, sure the CEO's but ultimately the "kings".
Ladies and gentlemen we have all been played. Dumbing down of america & now transference of wealth. You have to ask, what's next?
UziHusain, you cannot leave out realtors. I worked with home builders and we'd see realtors with buyers who truly should not have taken on the financial commitment they faced, yet the realtor (YES, the realtor) would work with the mortgage company to get it approved -- even offering clever ways to show income and reduce expenses. True, the mortgage companies should not have given the loan, but the realtors should not have put their own interests first (selling a home) when they knew their buyer would be over extended. Note, not all realtors were like this. But I saw plenty to know it wasn't a tiny fraction.
ReplyDeleteAs far as Rush Limbaugh, the man panders to the scared.He's a hypocrite. He says "We, the taxpayers" own our government, yet he hopes the government fails because it isn't his group. But if he did indeed own the Rams, would he hope they failed if they hired a coach he didn't like? I doubt it. Then again, he's a bit crazy, so who knows.
Charles
Why does ACORN have some culpability in the subprime mortgage mess? Well I'll tell you.
ReplyDeleteACORN was against red-lining and wanted the poor to have access to mortgage money doled out by the banks. Therefore, it started to picket those banks. When that wasn't successful, they started to picket the HOMES of the CEO's of those banks. and harassed their families. That worked. Once one bank caved, the others followed not wanting to lose the business. That was ACORN's dirty contribution to the subprime scandal. Rush did not have to tell me about it. And you probably knew about it.