Informed voters want country back, want to remove bloated government

This article was published in the July 26, 2011, issue of The News-Sentinel newspaper.
By Donna Volmerding
In his July 12 guest column, B. J. Paschal asks the question, “Will the voters be snookered again in 2012?” Perhaps, especially if voters are as misinformed as he is.
He stated that Wall Street is the cause of our economic woes. Certainly, Wall Street played a part in the financial meltdown of 2008, but the cause stems from flaky ideology and government intervention.
In 1977, President Jimmy Carter signed the Community Reinvestment Act. According to Business Insider, “The CRA … evolved over the years from a relatively hands-off law focused on process into one that focused on outcomes. Regulators, beginning in the mid-nineties, began to hold banks accountable in serious ways. Banks responded … by increasing the CRA loans they made, a move that entailed relaxing their lending standards.”
In many cases, the banks were strong-armed into making loans to those who couldn’t afford them — at lower-than-market interest rates.
Executives at Fannie Mae and Freddie Mac, two quasi-governmental lending institutions at the epicenter of the financial implosion, assured the banks that these loans would be solvent because the full support of the U.S. government was behind them.
Subprime lending was vastly expanded in the early ‘90s under President Bill Clinton, which led directly to the housing crisis. Several former Fannie Mae and Freddie Mac executives, including President Obama’s cronies Franklin Raines and Jim Johnson, are being investigated.
According to a Reuters article by Jim Meyers dated April 1, 2011, “Top executives at Fannie Mae and Freddie Mac were paid more than $35 million in the past two years while the two bailed-out mortgage finance giants were receiving $153 billion in support from taxpayers.
“Although the enterprises (Fannie Mae and Freddie Mac) have lost billions of dollars and continue to depend upon federal support to remain in business,” states a report by the Federal Housing Finance Agency’s Office of Inspector General, “their senior executives continue to receive multi-million dollar salaries.”
Even after the 2008 financial debacle, congressional liberals asked Fannie and Freddie to ease mortgage-loan standards. This is from a June 22, 2009, press release from Reuters:
“Two U.S. Democratic lawmakers want Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery, the Wall Street Journal said.”
Who were those lawmakers who wrote the letter to the CEO’s of both companies? Representatives Barney Frank, former chairman of the House Financial Services Committee, and Anthony Weiner, now disgraced former congressman.
(For more information, read “Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon” by Gretchen Morgenson and Joshua Rosner.)
Yet Obama’s financial regulatory bill is a “disaster,” said former Sen. Judd Gregg, R-N.H., who sat on the Senate banking, budget and appropriations committees, and its proposed consumer protection agency would create a Fannie and Freddie “on steroids,” he said.
“The bill is a disaster because it doesn’t address the fundamental underlying causes of the economic issue. You’ll basically have a consumer protection agency which decides to … say, ‘well, everybody who’s XYZ should have a loan, even though the local community bank says XYZ shouldn’t have a loan, because if we give them a loan, we know they’re not going to pay back,’” Gregg said. “It’s going to become an agency that defines lending on social-justice purposes instead of safety and soundness purposes.”
Paschal asks “Why do we Americans ‘believe’ against our own self-interest by not blaming Wall Street for causing our financial mess?”
Perhaps it is because informed voters want to rescue (and preserve) the great country we once had and remove via ballot a despotic, bloated central government that is responsible for the 2008 financial catastrophe.
Will the voters be snookered again in 2012? Gee, I hope not.