Obama's Subprime Corruption

Obama's Subprime Corruption

Can we end the charade that America has a free market economy now? If this financial crisis hasn't proved that we suffer from rampant socialism, nothing will.

The United States is a socialist country, and socialism is collapsing everything around us. Our communist school system fails 50 percent of our children. Our roads are disintegrating because of communist mismanagement. Our system of socialized medicine, where government pays 60 percent of payments, is breaking down. Liberals demand we replace it with communism - euphemistically called a single payer system. It shouldn't surprise anybody that under Bush the Democrat, socialist Republicans, and bigger socialist Democrats, the United States dropped from 2nd to 8th in the index of economic freedom. Our rating fell from 8.55 to 8.04. Only in Zimbabwe, Argentina, Niger, Venezuela, and Guyana has socialism advanced faster. We are transforming America into the Soviet Union and suffering its fate.

America's financial markets are socialist and collapsing too. With all the panic about the problems on Wall Street, it's informative to remember exactly how we got here. The problem is a small percentage of Americans aren't paying their mortgages, creating a crisis of confidence in the markets. 3 socialist policies dovetailed to create this problem.

The tip of the spear is the subprime mortgage crisis. In 1977, Jimmy Carter and the Democrat Congress passed the Community Reinvestment Act (CRA), which forces lenders to make loans to borrowers who are likely to default. This wasn't in the lenders', borrowers', or the public's interest, but Democrats didn't care. They passed the law anyway and initiated the subprime crisis.

Before Barack Obama joined the Illinois Senate, he worked for the Association of Community Organizers for Reform Now (ACORN). ACORN is devoted to promoting Marxism through community organizing techniques. Besides participating in widespread voter fraud, one of ACORN's most effective techniques is attacking mortgage companies for failure to provide loans to low income families.

Crying racism, Barack Obama and ACORN would threaten mortgage companies with lawsuits based on the CRA, forcing companies to make subprime loans. But they knew these borrowers couldn't afford mortgage payments. The goal was not to put people in homes but to attack capitalism by forcing mortgage companies to make subprime loans that would never be repaid. Obama and ACORN must be ecstatic with their success. Now they call the companies they coerced into making subprime loans predatory lenders.

The Clinton administration strengthened the CRA and empowered the biggest scandal of our lifetimes - Fannie Mae and Freddie Mac form the nexus of the subprime crisis. These psuedo-companies bought the protection of powerful Democrats like Senate Finance Chairman Chris Dodd, John Kerry, Barack Obama and Hillary Clinton with millions of dollars in campaign donations. They also donated millions to ACORN. Their CEO's made multiple millions by cooking the books while Democrats blocked attempts to end the corruption. This is organized crime, but because Obama and Democrats are immersed in this corruption, the mainstream media refuses to report it.

Obama is up to his eyeballs in subprime corruption. His Vice-President selection adviser Jim Johnson and Franklin Raines, whom Obama solicited for economic and housing advice, are ex-CEOs of Fannie and Freddie. Both have been implicated in the corruption for the millions they looted. If they had worked for Enron instead of government organizations protected by Democrats, both would be in prison. Many credit Obama's Finance Chair, Penny Pritzker, with inventing the subprime crisis by inventing the bundled mortgage security, a tool designed to diffuse the risk forced on mortgage companies by government and activists like Obama, which were then funneled to the entire finance industry through Fannie and Freddie.

Using Clintonian tactics to distract Americans from his corruption, Obama aggressively attacked John McCain and his finance adviser Phil Gramm for the credit crisis. Obama blamed our non-existent free market, Republicans, and George Bush. He blamed everything but the vast right-wing conspiracy. Democrat concerns about deregulation are laughable since Democrats prevented attempts by Bush and McCain to rein in Fannie and Freddie in 2003 and 2005, respectively. Regulation by corrupt aristocrats is worse than worthless. Like they protected Clinton, Obama's media allies may enable him to get away with this corruption.

The second socialist policy that sparked this crisis is the irresponsibly loose monetary policy of the Federal Reserve under Alan Greenspan. Greenspan took it upon himself to boost the economy through inflationary monetary policy instead of limiting himself to his mandate to control inflation. Cheap money powered the house-flipping craze, creating the housing bubble. Recognizing that bubble was about to burst, Greenspan retired to avoid blame and now sits on the sidelines pronouncing this is by far the worst economy he's ever seen. Thanks, Alan.

The third socialist policy responsible for this problem is the income tax. Our income tax punishes savings and rewards debt. Finance companies trusted Fannie, Freddie and their government masters, saved little cash and assumed massive debt. When investors started withdrawing money, the companies were left holding worthless paper.

The failures of socialism always lead to more socialism. Socialists will take more money from responsible Americans and give it to irresponsible Americans. The largest shareholders in financial giants will be the biggest winners. This guarantees an even worse economic collapse in the future, but I doubt a market-based solution was ever considered. Friedrich Hayek described this downward spiral in his book The Road to Serfdom. The solution is to end our destructive spiral into Soviet socialism and return to the American value of freedom including free markets.