Last Thursday I posted a blog regarding the government bail out, and how this entire issue could have been averted had the Democrats who were protecting Fannie and Freddie, in part because they would receive so much money from them, voted for Bill S. 190 which John McCain cosponsored in 2006. Bloomberg has a great article which describes the entire mess we are in, and how the Democrats got us into it.
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=aSKSoiNbnQY0
Interesting enough, the article speaks about Franklin Raines, the ex-Fannie Chief who cooked the books, much like the Enron scandal. Unlike Ken Lay though, he does not go to jail, he gets to become Barack Obama's Head Economic Advisers. A storyline like this I could not make up.
This teacher should get fired, it shows everything wrong with the educational system...
According to this woman, Obama will be giving free gas and pay for your mortgage if elected...
Tuesday, September 23, 2008
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3 comments:
Sure, the Democrats were responsible. Who believes that?
When President Bush took over, nearly eight years ago, the unemployment rate was 4.2 percent. I repeat: 4.2 percent. Only 4.2 percent.
The unemployment rate is now 6.1 percent. That rate, Republicans never cease repeating, is a historically low rate. Well, sure it is. But it is a much HIGHER rate than 4.2 percent, and, sadly, it looks like 6.1 percent unemployment is likely to get worse. Rising unemployment has always contributed to high rates of defaults on home mortgages. So, it’s not just a question of the financial controls; the bad economy had a lot to do with the current crisis.
Then, there are real wages, meaning the average wage minus the rate of inflation. In President Clinton’s eight years, the median household income increased by more than $5,000. As of early 2007, considerably before this crisis, real median household income in the USA had fallen by more than $1,200 from the time that George Bush took office, and since then the situation has gotten worse. I do not have more recent figures, but I’d guess that the decline is now in the area of $1,500 per family. Naturally, when people earn less, they are more likely to default on their mortgages.
Then, there are rising interest rates, which made paying mortgages very much more expensive. Why did interest rates rise so rapidly? The rising deficit and plunging US dollar. Who was responsible for that? The administration that is currently in power – the Bush administration.
Now, as to the allegation that because Obama and Dodd received a lot of money from Fanny and Freddy, they voted against tougher regulations over them. But to show that is true, you need figures on the contributions by Fanny and Freddy before the 2005 legislation was proposed. And, you need figures for how much the Republicans on the committee received also. I'll bet that added together all the Republicans on the committee received more money than all the Democrats in 2004 and 2005. Your figures refer to contributions made after the legislation was propose, when Dodd and Obama were running for president.
Then, what you don't say was that the legislation you are referring to, the Federal Housing Enterprise Regulatory Reform Act of 2005, never came to a vote in the House of Representatives. The Republicans were in total control of the House at the time.
Actually interest rates are very low. See below for some Historical data on interest rates:
1992, 3.52
1993, 3.02
1994, 4.21
1995, 5.83
1996, 5.30
1997, 5.46
1998, 5.35
1999, 4.97
2000, 6.24
2001, 3.88
2002, 1.67
2003, 1.13
2004, 1.35
2005, 3.22
2006, 4.97
2007, 5.02
Bush did not come into office until January 2001, therefore that high interest rate was when Clinton was leaving office. Which I believe is one of the main points of your arguement. Also, when any person is allowed to obtain a loan, regardless of whether they can pay it back or not, that has a bigger effect on defaults than how the economy is doing. And ask any economist, the bulk of the economical crisis that we are facing is a direct result of the housing market.
Just for kicks, below are the interest rates under the beloved Liberal Jimmy Carter:
1977, 5.54
1978, 7.94
1979, 11.20
1980, 13.35
1981, 16.39
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