Monday, December 29, 2008
A Troubled Economy
Our economy is in trouble. Is there anyone denying that?
If you are denying it now, just wait a few more months, and I can assume you’ll be recognizing the effects of the mortgage crisis, banking and auto bailout, and the increasing employment issues facing our country.
So, who’s fault is it?
I happen to be of the school that believes there is plenty of blame to go around! Both Republicans and Democrats in Congress are responsible for where we are now. Then again, so are millions of Americans who bought into the “easy money” lies that have been “preached” for decades and decades.
However, to no one’s surprise, the name calling has begun!
Just last week, the White House began pushing back hard against a New York Times article that essentially blamed President Bush for the sub-prime mortgage mess and the Wall Street collapse.
In a 5,000-word article in the Times on Sunday, under the headline, “White House Philosophy Stoked Mortgage Bonfire,” said Bush was also encouraging a “hands-off approach” to regulation that encouraged “lax” standards on behalf of lenders. “He pushed hard to expand homeownership, especially among minorities, an initiative that dovetailed with his ambition to expand the Republican tent—and with the business interests of some of his biggest donors,” the article said.
“That’s about as myopic as you can get,” White House spokesman Tony Fratto said in response.White House counselor Ed Gillespie lashed out at the Times for its interpretation of Bush’s housing policies. “They’ve had to mortgage their building in Manhattan to help make ends meet, and they’ve been reduced to junk-bond status. I don’t know if the New York Times’ shoddy reporting is the result of being in junk-bond status, or if their junk-bond status is what’s resulting in their shoddy reporting,” Gillespie said.
In fact, the Times’ article ignored a wealth of its own reporting, dating back to the era of Bill Clinton, whom the article mentioned only once, in passing. For example, in September 1999, the Times noted that, “Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stockholders to maintain its phenomenal growth in profits.” The 1999 piece went even further: “In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.”
Likewise, the Times made no mention over the weekend of President Clinton’s aggressive deregulation of the financial services industry, which empowered banks, brokerage firms, and insurance companies to engage in some of the very practices—such as credit default swaps—that contributed most to the current fiscal crisis.
While the Times mentioned that mortgage bankers and brokers donated almost $850,000 to President Bush's 2004 reelection campaign, the newspaper omitted the fact that the top three recipients of campaign contributions from Fannie Mae and its sister organization Freddie Mac over the last two decades were all Democrats. Connecticut Sen. Chris Dodd, head of the Senate Committee on Banking, Housing and Urban Affairs; President-elect Barack Obama; and Bush’s 2004 opponent John Kerry all benefited from Fannie and Freddie.
I hate shoddy reporting. I hate even worse when people with an agenda write about their opponents.
Let’s face it folks. The current economic situation didn’t happen during President Bush’s term in office. The problems leading to where we currently are began happening in the 1980s and 1990s.
So, writers, editors, and reporters can take the coward’s way out and blame President Bush (if they are more liberal) or President Clinton (if they are conservative). But for me and my house, we’ll go back to what I said at the beginning—there’s plenty of blame to go around!