How Exactly Did Bush Cause This recession?

Facts Show Private Lenders Who Were Not Subject To CRA, Not Government-Backed Ones Who Were, Drove The Subprime Mortgage Market
Private Firms, Not Fannie And Freddie, Dominated The Subprime Mortgage Market
2007: The Collapse Of The Housing Bubble And Widespread Defaults On Subprime Loans Triggered A Banking Crisis That Led To A Massive Recession. From Slate: "The only near consensus is on the question of what triggered the not-quite-a-depression. In 2007, the housing bubble burst, leading to a high rate of defaults on subprime mortgages. Exposure to bad mortgages doomed Bear Stearns in March 2008, then led to a banking crisis that fall. A global recession became inevitable once the government decided not to rescue Lehman Bros. from default in September 2008. Lehman's was the biggest bankruptcy in history, and it led promptly to a powerful economic contraction. Somewhere around here, agreement ends." [Slate, 1/9/10, emphasis added]
The Subprime Market Surged From 2004 To 2006. As reported by McClatchy: "Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006." [McClatchy, 10/12/08]
From 2004 To 2006, Fannie And Freddie's Share Of Subprime Market Fell From Almost Half To Just Under One-Quarter. As reported by McClatchy: "But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party's standard bearer, President Bush, didn't criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership. Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication." [McClatchy, 10/12/08, emphasis added]
· Fannie And Freddie Faced Tougher Regulatory Standards Than The Private Firms. As reported by McClatchy: "One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble." [McClatchy, 10/12/08]
2006: Private Firms Issued About Six Out Of Every Seven Subprime Mortgages. As reported by McClatchy:
Federal Reserve Board data show that:
· More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
· Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
· Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics. [McClatchy, 10/12/08, emphasis added]

http://politicalcorrection.org/factcheck/201110140001

 

Most of the bad mortgages were written after 2002, the problem was ARM's and greedy lenders, greedy traders and greedy insurance companies along with a corrupt financial system. I agree both parties ENABLED them, but nobody held their hands over a fire to write those loans, that just BS. Like I said, we have already spent enough money to buy all those homes, thats not why we are in this mess right now. It's what happened after they made the loans. Forget supply and demand, it doesn't apply when the market is manulipulated, forget fannie and freddie, they were on autopilot-just another enabler.

 

Deregulation doesn't kill economies, corrupt systems and individuals kill economies. But, deregulation did facilitate their crimes.

 

Here are some helpful videos on the subject. Be prepared to get angry.

The Inside Job
Charles Ferguson’s film – Won the Academy Award for Best Documentary in 2011. It narrates the conflicts of interest between the finance industry, politicians, academics and regulators, which eventually led to the trillion-dollar collapse of 2008. Narrated by Matt Damon.
http://www.theotherschoolofeconomics.org/?p=2499

The Warning
In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.
http://www.pbs.org/wgbh/pages/frontline/warning/view/

For the next 2 videos you will have to find the specific titles.

How Big Banks are Rewriting the Rules of our Economy
Bill Moyers talks with former Citigroup chairman John Reed and former Senator Byron Dorgan to explore how our political and financial class shift economic benefits to the very top.

Crony Capitalism
Bill Moyers and former White House budget director David Stockman on how politics and high finance have turned our economy into a members-only private club.
http://billmoyers.com/video/

 

Here's an interesting little piece of the sub-prime puzzle:

CNN Money JANUARY 31 2008: How Congress helped create the subprime mess

Of course, this is merely one piece of the puzzle. It can easily balanced with the various banking deregulation measures during the couple of decades prior to the meltdown. Unfortunately, instead of balancing anything other than Democrat vs Republican finger-pointing, these two factors combined in a most volatile manner.

And never forget the refusal of the Clinton and Bush economics "experts" and Treasury/Fed/Harvard know-it-alls that refused to hear of any of the systemic dangers being increasingly presented by the explosion of speculative antics in the OTC Derivative market. "The market will take care of itself... blah, blah, blah..."

The 2008 meltdown was an explosive combination of the worst of Left and Right economics in combination with some of the greediest people on the planet - not to mention the millions of very foolish Joe Yuppie types and just plain average citizens.

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Sorry but all roads lead back to Democrat violations of the Constitution.

If lenders were "greedy" they were so in an environment created by Democrat violations of the Constitution. They HAD to make risky loans to avoid getting sued, pass FDIC audits, and to be able to sell to unconstitutionally Democrat created Freddie and Fannie who sought to buy subprime loans to make their political goals. Go back to my posted timeline of the events on post 77 and see where the bubble was during 2002.

Check out where the bubble was between 2000 and 2004 when unconstitutional Democrat created Freddie and Fannie did most of their mischief. Then re read the citation below to see how that bubble inflated. It’s all the fault of the Democrats. If one bought a home in the last ten to fifteen years Democrats have stolen tens to hundreds of thousands of dollars from them in destroyed home value, and many of those people no doubt will vote for Obama, a man who was a foot shoulder in this scam from the beginning as he sued Citibank for not making risky loans.

2000 - Paragraphs 12 and 13 in part

“In 2000, Cuomo (Democrat Clinton HUD Secretary) required a quantum leap in the number of affordable, low-to-moderate-income loans that the two mortgage banks—known collectively as Government Sponsored Enterprises—would have to buy… The government (Democrats) chartered these banks to pump money into the mortgage market and, while they did it, to make a strong enough profit to attract shareholders. That created a tug-of- war between their efforts to maximize shareholder value, which drove them toward high-end mortgages, and their (Democrat) congressionally mandated obligation to finance loans for those who needed help. The 1992 law required HUD's secretary to make sure housing goals were being met and, ever four years, set new goals for Fannie and Freddie.

Cuomo's predecessor, Henry Cisneros, did that for the first time in December 1995, taking a cautious approach and moving the GSEs toward a requirement that 42 percent of their mortgages serve low- and moderate-income families. Cuomo raised that number to 50 percent and dramatically hiked GSE mandates to buy mortgages in underserved neighborhoods and for the "very-low-income." Part of the pitch was racial, with Cuomo contending that Fannie and Freddie weren't granting mortgages to minorities at the same rate as the private market. William Apgar, Cuomo's top aide, told The Washington Post: "We believe that there are a lot of loans to black Americans that could be safely purchased by Fannie Mae and Freddie Mac if these companies were more flexible." (meaning if they lowered standards to make those who could not qualify, suddenly qualify for an “affordable mortgage&#8221

http://newsgroups.derkeiler.com/Arch.../msg00944.html​

Timeline of events.

http://www.politicalforum.com/polit...id-bush-cause-recession-8.html#post1060859214

 

This recession was caused by a number of things that I explained before. It has nothing to do with Bush or Obama.

http://www.politicalforum.com/polit...15-whos-responsible-killing-middle-class.html

 

That is so (*)(*)(*)(*)ing true, when you consider The Establishment. Both "Democrats" and "Republicans" are elitists

 

excellent post.well said,this is easily the best post on this thread.gives standing ovation. It was really clinton who initially got the recession started by signing NAFTA taking away millions of jobs from americans and Bush accelerated it to new levels once he got in and now Obama has made what Bush got started like like nothing now and yet the american sheep keep thinking things will change someday no matter how many times the reprocrats and demopublicans keep pulling the woll over their eyes.I did not realise this myself until i started subscribing to alternative news souces liek american free press and rock creek free press,they tell you whats really going on in the world that the corporate jewish owned media covers up.


thats why we need ron paul in there.He is the only candidate who believes in the constituiton and serving the people instead of wallstreet and the bankers.

 

From my perspective, "magically" turning massive surpluses and turning them in massive deficits is one way to start a recession; especially by exacerbating the issue by lowering taxes during time of war.

 

also excellent post.

 

yep,yep and yep.

 

yeah we have a corrupt bought off and paid for congress as well.

 

As an alternative to our usual shooting from the hip, there is always READING -



http://www.gpo.gov/fdsys/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf

It's only 663 pages, but it's quite useful for copying little portions out of context in order to paste them into posts to prove your own particular pet view. It even has dissenting views at the end of the book, in case yours wasn't adequately represented by the inquiry.

.

 

Well you have part of that right. We went from surplus to huge debt with NAFTA and Free Trade. When you lose thousands of factories and millions of Middle Class jobs, it goes a long way in starting a recession.

Now mix that with millions of loans to people who couldn't afford them and speculators trying to flip homes and you make things that much worse.

Then to put in the death keel. Take off regulations on the banks that have been in place to protect the people since the Great Depression and allow the banks to get into high risk ventures without any monitoring and you can easily see what happened to this economy.

 

I think I was able to stomach 2 pages when I tried to read the report for a research paper. I need to have some down time to really read and analyze such a report, because it seems to be surprisingly well balanced and insightful for a government source.

 

I have read this article. It showed how early deregulation policies fueled the bad side of the CRA. As Swamp Music correctly stated in a previous post, the original CRA was not a problem. From my perspective, it provided a dangerous precedent.

 

There you go again. I'm still waiting for a coherent answer on that.

 

I wouldn't exactly say THAT, exactly... The banks largely ignored the original CRA. Had they NOT ignored the legislation, and actually followed it, the problems would have started shortly after the legislation's enactment. Democratic Masterminds believe they can control the economy and people's lives by attempting to manipulate the free market. Such schemes never work, and are born right from Communist Pillar #1 "Abolition of property in land and application of all rents of land to public purposes." (right out of the Communist Manifesto ), and FDR's Economic "Right" # 5 "The right of every family to a decent home." If all get a home through unconstitutional Democrat wealth distribution and social engineering schemes the value will surly drop since a home is something one must work to achieve.

All such manipulations of the free market are destructive. The CRA was just as destructive when passed as it ultimately turned out to be, but luckily for all of us it was not followed. The Democrat Masterminds saw a way to change all of that. HAIL DEMOCRATS!

 

He didn't. His deregulation of the Commercial Mortgage Backed Securities market definitely threw gas on the fire but you can't say "Bush caused the recession". It was not his fault that housing appreciated 20% A YEAR for several years. It was like th dot com bubble - just a million times bigger.

If you want to spot the kool-aid drinkers, they'll be easy to spot in this thread. They will claim he did. Or that the Dems did. Or even more laughably, that Obama did (time machine, anyone?).

Everyone had some skin in the game. Including the banks and of course Moody's - who is the greatest proof against the Libertarian thoery that the market will eliminate companies that are harmful etc...

 

It's worth noting the summary conclusion regarding this matter provided on pg xxvii [PDF pg 28] from the CONCLUSIONS OF THE FINANCIAL CRISIS INQUIRY COMMISSION, that I mentioned earlier:

Essentially, the Fed dropped the ball in this area - and many others.

 

Without unconstitutionally Democrat created Freddie and Fannie pumping hundreds of billions of dollars into the low to medium mortgage market (and all their other tampering in the housing market) real-estate would not have "appreciated 20% A YEAR for several years."

Obama was a foot soldier in the war against private home ownership when he assisted in suing Citibank for not making risky loans in 1994. Yes, to some degree he was personally responsible.

1994 - Obama (working for ACORN) sued Citibank for “redlining” (later settled out-of-court in 1998 ).

http://www.clearinghouse.net/detail.php?id=10112

 

Yes the FED, unconstitutionally created by Democrats in 1913. The Democrat Masterminds felt they were smart enough to manipulate the currency for political gains.

Article 1, Section 8. (US Constitution) The Congress shall have Power...

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;​

Gee, I guess Congress gets to regulate the value of money, not the unconstitutionally Democrat created FED with whose members are barely known to the public much less have to stand before the public in any election. HAIL DEMOCRATS!

 

Well duh. And to some degree the Repubs were responsible. And the lenders. And the appraisers. And definitely Moody's.
Your biased is obvious in myopic post which cites only that party which (I assume) you loathe as bearing the onus.

 

"This is unConstitutional" that is "unConstitutional"--you guys tickle the s#@* outta me. Every President, every Congress, and every Supreme Court has treated the Constitution for what it is, a Living document, meant to be interpreted by the generation living. Then, when a law or act passes they don't like, "it's unconstitutional". This is a thread in itself of course. Still, blaming the current crisis on this is childish and nonintellectual. The reason is simple if the enabling is not, avarice and greed with a touch of arrogance.