Dodd-Frank, the real culprit according to Robert Tracinski of TIA Daily

 In this article Tracinski blames the Dodd-Frank financial reform act for the uncertainty and confusion in financial quarters that has impeded and virtually stopped the flow of credit necessary for a real recovery to begin.  Tracinski offers no solutions to the implosion on Wall Street that led to our current dilemma but suggests that the Dodd-Frank bill is simply making things worse inasmuch as it blames the financial collapse on venal bankers and proposes bureaucratic means of controlling them in the future.  It is this expansion of the administrative state that democrats so love that keeps the recovery at bay since the rules and regulations required by the new law have yet to be written and agree upon by regulators.  Tracinski sees us as about half way through this process.  But even so once the process is completed, things are not likely to get any better because the rules (already in place in some cases) are so vague as to continue to lead to uncertainty and therefore inaction by the banks to begin extending credit more freely once again.  In Tracinski's view once again the political class has succeeded in shifting the blame for the crises to the private sector and is proceeding to make things worse by further restricting the financial industry from doing its job.  All in all this is a fairly lucid explanation of what's happening now without shedding much light on what would be effective to prevent another such crises in the future short of keeping the government from making things worse, as it always manages to do.

The latest "meltdown" explanation

Mona Charon's review here of "Reckless Endangerment" by Gretchen Morgenson and Joshua Rosner, both NYT reporters, is the latest in a number of books on the cause of the 2007 financial meltdown.  Based on most of the other books out there, Mona and Joshua have got it about right:  the principal cause of the "meltdown" was the politicization of Fannie Mae and Freddie Mac by the Democrat Party over a period of time dating back to the '60's.  Jim Johnson, a democrat political operative for many decades, and all those like Frank Raines, Jamie Gorelick and their supporters in the Congress, including Barney Frank, Chris Dodd and of course Barak Obama. Mona points out the great effort on the part of the MSM to rewrite history in order to cover for these liberals now on going through all their outlets.  Their main distortion is the notion that the greedy Wall Street bankers were the primary cause, entirely overlooking the fact these "greedy" types were merely providing the means to carry out the policies of the political class writing the laws that encouraged and enabled the whole scheme to become reality in the first place.  At this point in time no amount of dissembling by the water carriers for the democrats can cover up this scandal.

Fannie, Freddie and Barney.

Grechen Morgensen and a co writer have produced yet another book on the causes of the financial meltdown.  This story is well known by now but what's most interesting  most disgusting is the lack of interest in the subject on the part of the so-called MSM in this country.  Corruption, when practiced by democrats, is apparently just fine as long as it is in the good cause of,  a) ensuring their idea of fairness, b) sticking it to republicans, c) redistributing wealth, and d) growing the size of government.

IN THE WASHINGTON POST, JOHN TAYLOR REVIEWS Gretchen Morgenson & Joshua Rosner’s Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon. Excerpt:

While many economists — including this reviewer — have argued that government actions caused the crisis, Morgenson and Rosner use their investigative skills to dig down and explain why those actions were taken. To avoid reckless policies in the future, we need to understand their causes, and the authors’ identification of government-industry links deserves careful consideration by anyone interested in improving the economy. . . .

The book then gives examples where Fannie’s executives — Jim Johnson, CEO from 1991 to 1998, is singled out more than anyone else — used the excess profits to support government officials in a variety of ways with plenty left over for large bonuses: They got jobs for friends and relatives of elected officials, including Rep. Barney Frank, who is tagged as “a perpetual protector of Fannie,” and they set up partnership offices around the country which provided more jobs. They financed publications in which writers argued that Fannie’s role in promoting homeownership justified federal support. They commissioned work by famous economists, such as Nobel Prize-winner Joseph Stiglitz, which argued that Fannie was not a serious risk to the taxpayer, countering “critics who argued that both Fannie and Freddie posed significant risks to the taxpayer.” They made campaign contributions and charitable donations to co-opt groups like the community action organization ACORN, which “had been agitating for tighter regulations on Fannie Mae.” They persuaded executive branch officials — such as then Deputy Treasury Secretary Larry Summers — to ask their staffs to rewrite reports critical of Fannie. In the meantime, Countrywide, the mortgage firm led by Angelo Mozilo, partnered with Fannie in originating many of the mortgages Fannie packaged (26 percent in 2004) and gave “sweetheart” loans to politicians with power to affect Fannie, such as Sen. Chris Dodd of Connecticut. The authors write that “Countrywide and Fannie Mae were inextricably bound.”

It’s interesting to me that there has been so little law enforcement — or journalistic — interest in the rampant corruption relating to these institutions’ collapse.

An early (and accurate) summary of the financial meltdown causes

In February of 2009, Peter Wallison carefully presented the real reasons for the financial meltdown in this article in American Spectator Magazine.  Much has been written since about the cause and reason this meltdown occurred, however Wallison's piece has stood the test of time as a definitive explication of the whole sorry event.  Cutting to the chase, the politicization of the housing market and its financing institutions (Fannie/Freddie, etc) clearly was the overriding cause.  As for whom to blame start with all the "progressives" (Barney Frank, et al), in the Congress, Carter and Clinton in the WH, and above all others Andrew Cuomo Secretary of HUD in the Clinton administration, as the prime movers.  Naturally the socialist groups (SEIU, Rainbow Coalition, etc) played major roles, particularly SEIU, Obama's favored grass roots organizing and lobbying pals.  This sorry collection of losers managed to infect the system with their collectivist philosophy, intimidating the normally more conservative bankers into playing along with them to some extent.  The Bush administration tried on numerous occasions to reign in Freddie and Fannie but were stiffed repeatedly by the likes of Frank and friends.  While assessing blame for the disaster,  Greenspan (for his loose monetary policy) and the rating agencies for their failure to properly assess and publicize the risk involved in all the paper (dirivitives and the like) that were issued and passed on by Wall Street, deserve their share.  And while we're at it let's note the complicity of the Wall Street banks who were coining it by producing and selling shabby mortgage backed securities and the rest all over the world. Lotsa guilty parties including all those people who bought in over their heads and the real estate industry that pushed those folks to buy when they surely must have known better.  It was the classic greed driven tulip bubble event of the 21st century.  We never learn.

Gerrymandering --the bane of democracy

There is little doubt that the single biggest problem contributing to the dysfunctional US Congress is the practice of gerrymandering.  This particular anti democratic political shenanigan is practiced by members of both US political parties and is designed to accomplish exactly what it in fact does which is to assure incumbent members of Congress their respective seats.  The practice is the primary reason we have representatives like Maxine Waters and Sheila Lee, two of the more racists members of the Congressional Black Caucus CBC), itself a racist group within Congress committed to furthering the interests of blacks before the interests of the country.  Sheila Lee, BTW, is a graduate of Yale College.  Nice. Makes a grad proud. A recent analysis pointed out that in any normal House vote, typically 80% of the races are considered safe for the incumbent.  Such is the effect of gerrymandering.  Gerrymandering does more to divide the country along racial lines that any of the other unconstitutional and divisive programs like Affirmative Action and the now infamous Community Redevelopment Act.  The latter program in its various permutations over the years was largely responsible for the sub prime mortgage fiasco which led to the near collapse of the entire financial system in the US. There have been several books on this subject, notably ones by Thomas Sowell and Peter Schweitzer that clearly catalogue and explain how this political event, led by the Black Caucus and other liberal politicians, (Barney Frank, Chris Dodd, Barak Obama, Cuomo and others) mostly in the Carter and Clinton administrations, brought all this about.  If enough people read these books and others and came to understand how it al happened we might just be able to make a few course corrections, eliminate all the racist, divisive government programs including gerrymandering, and return to a functioning democracy true to the principles of the founding fathers and the constitution.  Not in my lifetime.  Here is a proposal to reform the current gerrymandering system.

McCain's Early Recognition of Fannie/Freddie Crisis

It is beyond distressing that the democrats have essentially avoided responsibility for the financial meltdown caused by their complicity in preventing the reforming of these GSEs over the years.  The record is right here for everyone to see.  No media weighed in on this scandal except Fox News and perhaps even they could be faulted for not making an even bigger deal out of this issue on an ongoing basis.  What's to be done if clowns like Barney Frank and Chuck Schumer continue to get reelected (which they did) and wield great influence in the Congress (which they still do) even after evidence of their horribly bad judgement and outright incompetent leadership?  Until people like this are expunged from key decision making positions in our government, we are all doomed.