Rebuttal for Hire

Saturday, September 27th, 2008 11:33 am by Neal

We receive a variety of links, articles, opinions, etc. For example, a reader sent us this recent posting from a “conscience parents” group:

Greed and irresponsibility
Posted by: “laura h*****”
Wed Sep 24, 2008 6:58 am (PDT)

We are facing a financial crisis as profound as any we have faced since the Great Depression, but there’s something you can do to make your voice heard right now:

The Obama campaign is asking folks to support a responsible recovery plan that is fair to taxpayers and will fix our broken economic policies moving forward.

It’s actually a very simple plan:

* No Golden Parachutes — Taxpayer dollars should not be used to reward the irresponsible Wall Street executives who helmed this disaster.

* Main Street, Not Just Wall Street — Any bailout plan must include a payback strategy for taxpayers who are footing the bill and aid to innocent homeowners who are facing foreclosure.

* Bipartisan Oversight — The staggering amount of taxpayer money involved demands a bipartisan board to ensure accountability and oversight.

Join me and support these principles for economic recovery:


A user has sent this message from The sender’s name, email address, subject and message have not been verified.

Just for fun, here’s our response. If you happen to encounter this Obama form letter then please send our rebuttal. This rebuttal comes with no warranties and is “free” so long as the word “Obama” exists.

Our response:
Laura believes the way “to make your voice heard” is to go to Barack Obama’s website and spam this list with his political advertisements. The Internet makes such political activism really, really easy, but it’s too bad that independent thought and judgment are sacrificed to mouse-click advocacy.

Laura, your title suggests that greed and irresponsibility are at the heart of this crisis. You’re correct, but you assign blame to the wrong folks. This crisis started in 1999 when Fannie and Freddie eased credit requirements for folks in the sub-prime market. Don’t take my word for it, read the whole, sad story in this 1999 New York Times article:

Here’s a quote from Fannie CEO Franklin Raines (who would later be an adviser to…Obama!):

”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”

Later in the article, we have a prediction of where this would lead:

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

Guess who saw this coming and tried to reform it in 2005? That would be John McCain, and the legislation was S.190 which you can read here:

Who stopped McCain? That would be the Democrats, led particularly by Barney Frank who complained that it would prevent poor people from getting mortgages. Why would the Democrats stop the reform? It could be because top Democratic Senators were the top recipients of campaign contributions from Fannie. Those top recipients were, in order, Chris Dodd, John Kerry, Barack Obama, and Hillary Clinton. Consider a quote from this article from the New York Times in 2003. Here’s the article,

And here’s the quote from none other than Barney Frank:

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

So, in 2003, Frank had it exactly wrong. By 2005, McCain had it exactly right, but he was stopped from reforming Fannie and Freddie by Democrats like Frank which leads us to 2008 when it all collapsed.

Were there CEO’s and other business leaders who took advantage of this? Absolutely. For example, Fannie’s CEO — Frank Raines — made over $90 million in his six years there. He and his colleagues (like Jamie Gorelick) made this much money by producing false reports which allowed them to incur huge bonuses.

A lot of small banks also loans to bad borrowers because they knew they could sell them up the chain to Fannie and Freddie. In many cases, the banks that made these loans were pressured (some would say blackmailed) by Community Activist groups like ACORN who were empowered by the Feds under the Community Reinvestment Act (initially passed in 1977). Guess which community organizer worked with groups like ACORN to do this? Right again, Obama.

Laura, your message from the Obama campaign includes this gem: “It’s actually a very simple plan”.

This reminds me of a famous quote by H.L. Mencken:

“For every complex problem there is an answer that is clear, simple, and wrong.”

There’s nothing simple about fixing this mess, regardless of what Obama says.

What is simple is understanding how we got here. To entrust the people who created this mess with fixing it is to trust the Fox to guard the Hen house.

No thank you.

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