This is not my original but was sent by a friend who teaches economics....

I like to deal in facts. Researchable, provable, facts. You may elect to bury your collective heads in the sand and ignore the actual cause of what actually happened here, but I can’t because facts are very stubborn things and this crisis just happens to tick me off royally. Make no mistake about it. We are experiencing the current state of affairs due exclusively to politically liberal social engineering,

This current financial crisis all started with the Community Reinvestment Act of 1977. Look it up. This was social engineering at its worst, brought to us by Jimmy Carter. And then, as if it weren’t bad enough already, Bill Clinton in 1995 had to stick his liberal 2-cents into it as well by mandating that people who could not afford to buy a house, would be entitled to own one anyway. (Look it up).

Never mind that those persons were not able to re-pay their mortgage loans. Again, Social Engineering at its worst.

Because of the Clinton revisions, Fannie Mae and Freddie Mac were allowed to hold just 2.5% of capital to back investments, verses the standard 10% for banks. Fannie Mae and Freddie Mac were charged with promoting that lenders (that they were backing), should make money easier to come by, specifically so that under-qualified borrowers could buy houses that they simply could not afford. Fact: Barney Frank and Chris Dodd were two of the prominent politicians who forced the issue. For over 40 years, house prices closely tracked inflation, until Barney & Chris and Bubba socially engineered things. Then money got cheap, and house prices spiked.

Like it or not, seeing the writing on the wall by 2003, FACT: George W. Bush tried to change it in 2003. (Look it up). Bush’s attempted imposition of oversight over Fannie & Freddie would have been timely considering when the actual bubble started to inflate. Even the New York Times (no friend to the Bush administration), wrote on Sept. 11, 2003, “The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.”

Guess who stopped the Bush plan…. Barney Frank and Chris Dodd. Oh, now there’s a surprise. Barney Frank then had the go-nads to publically state: “the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” (That’s a quote – you can look that up too). Today, ‘ole Barney is quick to proclaim that the sky is falling, but he is equally quick to state that he was nowhere near the cause of the problem. Bull____!

But the Bush attempt to fix the problem was not the last.

Another fact: (look it up) On May 25, 2006, John McCain stood up on the floor of the Senate and said: “For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report solidifies my view that the GSEs need to be reformed without delay. I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole. I urge my colleagues to support swift action on this GSE reform legislation. Like it or not, this guy had it nailed in 2006.

Ok, so if the Bush plan wasn’t enough to alert the population that this time-bomb was coming, then John McCain’s urging should have. But what happened in 2006? The Federal Housing Enterprise Regulatory Reform Act of 2005 was killed by the democrats.

I’m not making this stuff up, folks, I’m just reporting it. You can look all this stuff up.

So when we sit around and hold George Bush at a 28% approval rating … and when we even have to pause to consider whether we should vote for

John McCain or Barack Obama, I have to question our collective sanity. This shouldn’t even be a horse race.

How long are we going to allow this politically correct bull____ to govern our lives? Make no mistake about it we are where we are today because the bleeding hearts who want everything to be good and kind and fair and strong and proper basic and equal, have attempted to “shame” us into

thinking that if we do not take part in the political correct fanfare, we are not among the enlightened thinkers. Well, listen; with a college degree behind me, I’m about as “enlightened” as I need to be. But even so, I can still

know deep, messy bulls___ when I see it, and I am not afraid to call it what it is. It stinks like hell, and I for one am not going to shut up about it any longer.

Community Reinvestment Act

The CRA was passed into law by the 95th United States Congress in 1977 as a result of national grassroots pressure for affordable housing, and despite considerable opposition from the mainstream banking community. Only one banker, Ron Grzywinski from Shore Bank in Chicago, testified in favor of the act The CRA mandates that each banking institution be evaluated to determine if it has met the credit needs of its entire community. That record is taken into account when the federal government considers an institution's application for deposit facilities, including mergers and acquisitions. The CRA is enforced by the financial regulators (FDIC, OCC, OTS, and FRB).

The bill encouraged the Federal National Mortgage Association, commonly known as Fannie Mae, to enable mortgage companies, savings and loans, commercial banks, credit unions, and state and local housing finance agencies to lend to home buyers. It also encouraged the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, to buy mortgages on the secondary market and sell them as mortgage-backed securities on the open market. Due to massive financial losses, on September 7, 2008 the Federal Housing Finance Agency (FHFA) put Fannie Mae and Freddie Mac under the conservatorship of the FHFA

Clinton Administration Changes of 1995

In 1995, as a result of interest from President Bill Clinton's administration, the implementing regulations for the CRA were strengthened by focusing the financial regulators' attention on institutions' performance in helping to meet community credit needs.

These revisions with an effective starting date of January 31, 1995 were credited with substantially increasing the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans.

These changes were very controversial and as a result, the regulators agreed to revisit the rule after it had been fully implemented for seven years. Thus in 2002, the regulators opened up the regulation for review and potential revision.

Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997 by Bear Stearns. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.

Other rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for

banks. By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market.

George W. Bush Administration Proposed Changes of 2003.

In 2003, the Bush Administration recommended what the NY Times called 'the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.' [10] This change was to move governmental supervision of two of the primary agents guaranteeing subprime loans, Fannie Mae and Freddie Mac under a new agency created within the Department of the Treasury. However, it did not alter the implicit guarantee that Washington will bail the companies out if they run

into financial difficulty; that perception enabled them to issue debt at significantly lower rates than their competitors. The changes were generally opposed along Party lines and eventually failed to happen. Representative Barney Frank (D-MA) claimed of the thrifts 'These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'Representative Mel Watt (D-NC) added 'I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing.'