Gregory D.

Lee

Read Greg's bio and previous columns here

September 29, 2008

The Road to Hell, and Financial Meltdown, Is Paved With Liberal Good Intentions

In a recent appearance on the Today Show, former President Bill Clinton so much as admitted that during his administration he and his fellow Democrats pressured lending institutions to make sub-prime loans to the poor and minorities in an effort to increase the percentage of American home ownership. 

Matt Lauer referred to a September 1999 New York Times article that pointed out the Clinton Administration “pressured Fannie Mae to increase the number of lower and middle income families and individuals who could get a mortgage and thus own a home.” To accomplish that, Lauer read from the article, “Fannie Mae lowered its standards for credit, (creating) the sub-prime mortgages.” Lauer pointed out that the article said that although it was “well intentioned, it was also dangerous.”

President Clinton told Matt Lauer that “. . . it looks like that was true,” but that he had to take in consideration what was happening at the time this was done. He cited a balanced budget, a budget surplus, a rapidly growing economy and too much money going back to Fannie Mae shareholders and executives as reasons to justify this affirmative action policy.

Just because there are fewer cars on the road at 3 a.m. doesn’t justify driving a car blindfolded. You have to consider the probable ramifications if you drive blindfolded. And, you have to consider the probable ramifications to the economy if you give loans to people who cannot or will not pay them back.

The pressure by the Clinton White House and Democratic-controlled Congress on banks to grant “sub-prime” loans to the poor and middle-class minorities set off alarm bells with economists who warned of a financial disaster looming if the housing bubble burst. They knew that these mortgage borrowers wouldn’t have enough equity to pay off their loans by selling their homes. Couple that with “creative financing” from lending institutions that allowed no down payment, no employment verification, super low teaser starter rates that adjusted upwards in a few years, and allowing consideration of welfare payments as credible sources of income for credit worthiness, created the recipe for the disaster that we have now. The Democrats’ definition of “affordable housing” is lending money to people who have no chance of paying it back.

Lenders made money with each loan origination, and then they would repackage loans to larger institutions to keep the loans afloat. Credit has tightened up considerably from the days when merely having a pulse qualified you for a Fannie Mae or Freddie Mac loan.

Now the pendulum has swung the other way. A realtor friend of mine said she was having a hard time qualifying a buyer for a high-end home because he had only been at his new job for 11 months. The fact he had impeccable credit and held a long-time job prior to changing employers less than a year ago didn’t matter to the lender.

The Democrats are desperately looking for a Republican scapegoat. Fingers are being pointed at John McCain, SEC Chairman Chris Cox, President Bush and even Ronald Reagan for promoting deregulation when he said, and correctly so, that government isn’t the solution to a problem, it is the problem. There is no better example of the government being the problem than this current crisis.

This is what happens when you elect “well-intentioned” liberals to the presidency and Congress instead of leaders who are practical problem solvers. Barack Obama epitomizes a liberal with good intentions. Who doesn’t want affordable housing, alternative forms of energy, great schools, better infrastructure, affordable health care for all and a clean environment? But achieving these things requires sensible plans that will not destroy the economy and place our national security at risk.

If Americans ever needed to wake up to which political party offers the adult leadership required to get us out of this mess, achieve energy independence and secure victory over terrorism, this is the time. Feel-good, well-intended, politically correct liberal politicians must not be allowed to do further damage. They need to be rounded up and held in captivity until they breed themselves out of existence.

Gregory D. Lee is a nationally syndicated columnist for North Star Writers Group and can be reached through his website: www.gregorydlee.com.

© 2008 North Star Writers Group. May not be republished without permission.

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