I find the acrobats that the Republicans are going through right now to lay, yet another policy disaster at the feet of the Democrats. Yes, of course it must be Carter’s fault that the economy is on the verge of collapse, it would have nothing to do with the constant whittling of safety-valve regulations and oversight and the progressive de-toothing of government agencies who should’ve been providing a natural check & balance to the industry desire for less of all those things and greater profit and riskier financial ponzi schemes. And they got away with it because the free-market after REagan and the fall of the Berlin wall became a golden calf, a false God. An all powerful and infallible entity based on the fact that it had defeated Communism and St. Ronald Reagan had given trickle down economics (also called voodoo economics by Bush I) his blessing.

If Carter and the Dems created this than why didn’t this happen sooner?

I’ll tell you why: Because it took Bush and his rubber stamp delusional Congress to take away all healthy controls from the Community Reinvestment Act. Republicans basically killed the golden goose here. They bet the farm on an illusion of endless profit and prosperity conjured up from thin air and specualtion. Mortgage debt? Let’s sell it at a profit!! Not necessarily a bad idea, but what was a bad idea is what a Republican Congress did to the CRA in 2005. They basically allowed any investment bank with funds up to a Billion dollars, whereas previously it had been instituions with assets only adding up to $250 million, to give away mortgages to anyone and everyone with the least amount of good faith lending that requires a the buyer of a mortgage to truly be able to make the payments to what they’re getting and not get hit with a disasterous ballon payment 4 years down the road and then, HIDE THAT VERY SALIENT FACT 23 PAGES INTO THE CONTRACT AS A FOOTNOTE TO A FOOTNOTE.

But this is what goes on when you’re given governmental approval to swindle and wheel and deal and then repackage your CON JOB into further profits in the form of bundling that faulty product in with a few thousand other faulty monetary products and sell it.

Enough.

The GOP, will pay for this. You people can spin it until judgment day, but this is YOUR HOUSE OF CARDS. As is that other disaster, also the product of a delusional and incompetent President & VP known as IRAQ. But I digress. Hopefully you people are out of office for a generation for these catastrophes you’ve lade at the door of every American family.

Jimmy Carter’s administration planted the seeds, but Bill Clinton’s administration watered and fertilized them, especially with a revision of the housing laws in 1995. Then Chris Dodd, Barnie Frank, and others in Congress stood guard over the garden!

You can google the history of the Community Reinvestment Act and find that, during Clinton’s administration, Henry Cisneros strongly supported expanding government-backed mortgage programs to reach more and more poor. He did so under penalties of law-suits and government fines. See this story, for example: http://www.washingtonpost.com/wpsrv/politics/special/cisneros/stories/cis113096.htm

At the time of Cisneros’ 1996 retirement, this Washington Post article told a highly favorable story about Cisneros’ accomplishments in forcing bankers to lend to the poor, but it reads much differently today! What are the long-run effects of compelling, by force and by fine, bankers to abandon their long-standing rules for sound mortgage lending? We are seeing the disastrous effects now, even while Barack Obama and John McCain call for more regulation. Perhaps investment banking needs to be reined in, but government regulations created much of the sup-prime mortgage mess that fed the housing bubble and created financial chaos (aided and abetted by Bear Stearns’ Collaterlized Debt Obligations and other financial innovations).

How could 1995 polices be at the root of the problem today? It took time for an industry of sub-prime mortgage lending to develop, encouraged by Countrywide, WaMu, IndyMac, as well as by relaxed rules at Fannie Mae and Freddy Mac that allowed them to underwrite the sub-prime loans. Furthermore, the Fed’s easy money policies of 2002 to 2004 fanned the flames of housing fervor, and then the abrupt end to the Fed’s easy money in 2005 and 2006 burst the housing bubble. That was when housing prices began to plummet.

Chris Dodd (D) interviewed on CNBC recently, blamed all this current mess on the “foreclosure” industry, but that is a too-brief and unfair history that blames the bankers for expecting repayment of loans. Those unsound loans had to be written first before they could be called in for non-payment! Again government policy encouraged the lending fury. One half of all the U.S. mortgages and 90% of subprime mortgages in the last few years were passed through to Fannie Mae and Freddy Mac. If local private bankers had still controlled mortgage lending, perhaps more could have arranged workout deals, as they are now. Moreover, with home prices falling and their equity gone, many people simply abandoned their homes voluntarily, not waiting for foreclosure. So Dodd should be concerned with telling a longer history. But how did we get to this point?

An important aspect of the problem was the twin aspects of banking-rule changes. First bankers had to write what they formerly would have considered bad loans. Second, bankers could pass most of these bad loans through to Fannie Mae and Freddy Mac. For a mortgage fee, bankers became simple hucksters, trying to push through as many mortgages as they could, all due to rule changes imposed by the U.S. government. They no longer had the incentive that holding mortgages inside the bank for 30 years would give them: to scrutinize loan customers extremely carefully!

It took time to grow, but this weed is now huge and noxious. And yes Jimmy Carter planted the seeds, Bill Clinton and Henry Cisneros watered and fed the plants, and Chris Dodd and Barnie Frank stood guard over the garden. Were Republicans complicit? Without doubt, they sat idly by, except for certain watchdogs in Bush’s offices and for John McCain. But these housing policies are Democratic creations that have ultimately failed the poor they tried to serve. And the patterns of Fannie Mae and Freddy Mac lobbyist giving (posted on this page) support this claim.

Yeah, that evil Jimmy Carter knew that this would ruin billionaires 30 years later.

This crisis was compounded by the derivitives market, not lending to minorities. It was deregulation and a failure to enforce banking laws that caused this in the last 8 years, not 30 years of programs to erase red lining.

What about McCain’s campaign contributions?

I don’t quite understand why Fannie and Freddy contributions to Obama are being singled out here.

Merrill Lynch $298,413
Citigroup Inc $269,251
Morgan Stanley $233,272
Goldman Sachs $208,395
JPMorgan Chase & Co $179,975
AT&T Inc $174,487
Blank Rome LLP $150,426
Credit Suisse Group $150,025
Greenberg Traurig LLP $146,787
UBS AG $140,165
PricewaterhouseCoopers $140,120
US Government $137,617
Bank of America $129,475
Wachovia Corp $122,846
Lehman Brothers $117,500
FedEx Corp $113,453
Gibson, Dunn & Crutcher $104,250
US Army $103,613
Bear Stearns $99,300
Pinnacle West Capital $97,700

John McCain is also a good politician and he got some good political ideology. i admire John McCain more than Obama.

Barack Obama is not only a charismatic president but he is a very intelligent and smart person too. I congratulate him for winning a Nobel Peace Prize .
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Barack Obama may be a charismatic leader but somehow his economic policies are not that great in my own opinion. But still i am thankful that a Obama is the current president of the unitied states.