President Obama has told everyone that we need to quit harping about health insurance and focus on creating jobs. Everything he does, according to him, is about creating jobs. Health care reform will create jobs, the financial market reforms will create jobs, cap and trade will create jobs, card check will create jobs. He’s never said how, he just says it will and anyone opposing him doesn’t support creating jobs. Then we get statement like this literally in the same paragraph:
That was in response to the student loan takeover. Sallie Mae has been the largest student loan processor, but not the only one. Their immediate response to the takeover?
“This legislation will force Sallie Mae to reduce our 8,600-person workforce by 2,500,” Conwey Casillas, Vice President of Sallie Mae Public Affairs, said in a statement to Fox News.
Now, the bait for socializing yet another public sector industry is that more students will be able to get cheaper loans.
I don’t buy that for one second. Obama has repeatedly illustrated that he either does not understand basic banking principles, or more dangerously, doesn’t care or holds them in contempt.
In 1979 Freddie Mac was expanded to near unlimited capacity as a vehicle to make high-risk inner-city loans that the private sector would not touch with a ten foot stick. Less than three decades later Freddie Mac collapsed, nearly taking down the entire credit market in the United States with it. It wasn’t the private sector taking it down, it was a quasi-governmental agency/bank that made no efforts whatsoever to mitigate its risk. It made illogical practices simply to bolster its revenues. It perverted the entire mortgage industry by buying not only the high risk loans, but the perfectly normal ones as well leaving banks with inadequate reserves. When the Freddie/Fannie bubble burst, it took down banks all over the country within months. We’re still pretending we’re over that one. But we’re not.
So, what does Obama propose? Make student loans just like Freddie Mac. It’ll be a government program that won’t have to answer to logical lending practices, just like Freddie. People will get high-risk loans at too-cheap rates, for a while. At some point, and I’d imagine in the very near future, it will go bankrupt due to those illogical lending practices. Then, just like Freddie, the taxpayor will be stuck keeping it up.
In the meantime, the current largest lendor is laying off 2,500 existing jobs. That’s not a promise, that’s a reality. That’s ONE lendor. Multiply that all over the country and I’m sure the figure will wind up around 10,000 ( Sallie is about 23% of all loans ).
Then, of course, Obama will ask for another stimulus plan to get those people jobs working for the government.
That folks is socialism. Obama has flat out stated he’s not working for banks. He’s working for himself. He’s working to eliminate the private sector and then everyone will be unionized and subservient to the federal government of which he’s the boss.
Disgusting.
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