What if.....we had a Republican President who inherited an economy in a serious recession - regardless of the cause - and who, at the end of two full terms in office, had the following resume: - a Labor Force Participation Rate lower than it has been in 39 years - 95 million more people out of the labor force than when he/she took office - a recession recovery that was the weakest in 70 years - lowest home ownership rate in over 50 years - 11 million more people receiving Food Stamps than when he/she took office - 43 million citizens (13+% of total population) living at or below the poverty level - 1 of every 5 families (20%) with no family member currently in the labor force - 1 of every 6 men ages 18-34 (16+%) either incarcerated or out of the labor force - accumulated more national debt than all previous Presidents combined - over 301,000 manufacturing jobs lost since taking office - a $732 billion global trade deficit - enacted a health care program that resulted in: 1) a nationwide average 25% premium increase 2) an average $5,462 higher annual family employer-sponsored health care cost Would you honestly consider that Republican President a success?
If he followed a Democrat who cause one of the worst recessions in history, yes! And followed a Democrat who had the worst terrorist attack on American soil, caused two fraudulent wars, blew up the Middle East, had tax cuts that increased income inequality, and trashed federal revenues yes I probably would have thanked that Republican for saving the nation.
First and foremost, the lending institutions themselves...namely Fannie Mae and Freddie Mac...were ultimately responsible for the housing crisis. However, there were key causative players within the government - yes...even on the Democratic side - who played particularly profound roles in exacerbating the onset of what became known in liberal circles as "The Bush Recession". For most of his career, Barney Frank was the principal advocate in Congress for using the government's authority to force lower underwriting standards in the business of housing finance. Although he claims to have tried to reverse course as early as 2003, that was the year he made the often-quoted remark, "I want to roll the dice a little bit more in this situation toward subsidized housing." Rather than reversing course, he was pressing on when others were beginning to have doubts...including George W. Bush and his administration, who repeatedly warned us - on national TV no less - that there was trouble brewing and that we had better take strong measures to head it off. I remember those warnings specifically. I lived in the DC area at the time while stationed at the Pentagon - but I owned two homes in Georgia and Texas, so I was watching this like a hawk! DC was ground zero for the housing bubble and home prices skyrocketed there with zero regard for warnings of the impending crisis. (Then again...I also remember those warnings because I actually paid attention to ALL news sources and didn't keep my nose buried in CNN and MSNBC's butts! They largely ignored it!) Anyway...Congress was having none of that "gloom and doom" prediction garbage - and the "mainstream media", as I said, ignored the Bush Administration's warnings to the point of barely covering it at all! Back to Barney..... Congressman Frank's most successful effort was to impose what were called "affordable housing" requirements on Fannie Mae and Freddie Mac in 1992. Before that time, these two government-sponsored enterprises had been required to buy only mortgages that institutional investors would buy. In other words, prime mortgages -- but Frank and others thought these standards made it too difficult for low income borrowers to buy homes. The affordable housing law required Fannie and Freddie to meet government quotas when they bought loans from banks and other mortgage originators. At first, this quota was 30% of all the loans they bought. A full 30% had to be made to people at or below the median income in their communities. HUD, however, was given authority to administer these quotas, and between 1992 and 2007, the quotas were raised from 30% to 50% under Clinton by 2000 - and then to 55% under Bush in 2007. Despite Frank's effort to make this seem like a purely Republican issue, it wasn't. The Bush administration was guilty of this error, as was the Clinton administration, but certainly to a lesser extent. Barney Frank eventually saw his error and corrected it when he got the power to do so in 2007, but by then it was way too late! It is certainly possible to find prime mortgages among borrowers below the median income, but when half or more of the mortgages the government-sponsored enterprises bought had to be made to people below that income level, it was inevitable that underwriting standards had to decline. And so they did.... By 2000, Fannie was offering no-downpayment loans. By 2002, Fannie and Freddie had bought well over $1 trillion of subprime and other low quality loans. Fannie and Freddie were by far the largest part of this effort, but the FHA, Federal Home Loan Banks, Veterans Administration and other agencies--all under congressional and HUD pressure--followed suit. This continued through the 1990s and 2000s until the housing bubble--created by all this government-backed spending--collapsed in 2007. As a result, in 2008, before the mortgage meltdown that triggered the crisis, there were 27 million subprime and other low quality mortgages in the US financial system. That was half of all mortgages! Of these, over 70% (19.2 million) were on the books of government agencies like Fannie and Freddie, so there is no doubt that the government created the demand for these weak loans. Less than 30% (7.8 million) were held or distributed by the banks, which profited from the opportunity created by the government. When these mortgages failed in unprecedented numbers in 2008, driving down housing prices throughout the U.S., they weakened all financial institutions and caused the financial crisis. Congressman Frank makes assertions about who was responsible, but he, like all those who hold his position, have no verifiable data to back up those assertions. He says that the banks were responsible, but in truth, cannot challenge the real numbers. These numbers show, beyond question, that it was government housing policy that caused the financial crisis. Even Barney Frank has admitted it. In an August 2010 interview, he said "I hope by next year we'll have abolished Fannie and Freddie ... it was a great mistake to push lower-income people into housing they couldn't afford and couldn't really handle once they had it."
Nice turn-about! I do appreciate your answer, but I contend that it was private enterprise that "saved" the nation...not anything that President Obama can realistically lay claim to. President Obama enacted 2,988 new Federal regulations that have cost the US economy an estimated $873.6 billion. $344 billion of that can be attributed to EPA regulations alone. The fact is - we should be MUCH further along than we are right now. Good jobs are simply not being created. Instead we have loads of part-time, low-wage jobs because economic expansion has stalled. President Obama's knee-jerk push to enact punitive regulatory policies has caused businesses to drastically reduce capital investment. This has, in turn, stymied small business expansion, profit reinvestment, and has inhibited small business creation by creating a climate of lowered expectations of success. Small business is undoubtedly the engine that drives our economy. Those small businesses found ways to stay solvent - in spite of all that increased regulation...not because of it! No...sorry - Obama "saving our nation" just doesn't wash once you scrape away all the layers of book-cooking BS. We could be - and should be MUCH further along in our "recovery" than we are right now. Thanks for your reply.