No matter who you are, the current credit crunch does affect you, even if you don’t have a penny in the bank or a stock.  Never mind (for now) the domino effect of the credit market seizing up, if you vote, it should affect you.

Item 1:  Rep. Barney Frank has called this current crisis two things that are both flat-out lies; a failure of the free market and the result of Bush administration policies.  Frank should, and likely does, know better, since he’s the chair of the House Committee on Financial Services.  There has been video all over the blogosphere, and linked here as well, that show he and his fellow Democrats denying any problems at all with Fannie Mae and Freddy Mac, and now he’s trying to solely blame Republicans.  There’s plenty of blame to go around in both parties, but he’s in a unique position, as committee chair, to pronounce the truth of the matter to us.  Instead, he’s politicizing this huge issue for partisan gain.  If you’re from Massachusetts and you vote, this should affect your vote.

Item 1a: Senator Joe Biden said the same thing about it being all about Bush administration policies.  This should affect your vote.

Item 2:  At the foundation of this crisis is an abandonment of free market principles, not the failure of them.  Republicans have (more often) been the keepers of the free market flame.  (That’s not been a constant by any means, but a good generality.)  The Community Reinvestment Act is a Carter-era program to basically force lenders to give home loans to those who would otherwise not qualify, and the default rate of these loans is higher than normal.  That, along with the Gramm-Leach-Billey act which allowed Fannie Mae and Freddie Mac to write or buy up these loans in a bigger way, released other banks from this higher-risk paper and continued us down the primrose path.  Again, videos highlighted here showed, one of Obama economic advisors Franklin Raines, who at the time of the video was CEO of Fannie Mae, insisted that home prices would always go up.  Now, there is no doubt in my mind that Wall St. greed fueled this as well, but with a government mandate to write high-risk loans, and a (for all intents and purposes) government agency ready and willing to buy them up, this was a recipe for disaster.

The point is, as honorable and as high-minded the intentions were to try to get more people into their own homes, it set more people up for failure.  You can say that the number of foreclosures wasn’t enough to be a problem, yet here we are, the engine of commerce about to seize up over securities backed by mortgages.  This started when Democrats decided that the free market wasn’t working and instituted policies to, in their eyes, fix things.  While it did get many into homes that might not have otherwise been able to, does it really help us in the long run when Congress has to eventually bail us out to try to avoid a recession or worse?  (And the jury’s still out on if the bailout will really do it, or if it’s just a short-term band-aid.) 

Those who think that the free market failed us then, and are now ironically blaming the free market again, are running for President in November.  This should affect your vote. 

It does affect you.  Or it should.

Filed under: DemocratsEconomicsGovernmentPolitics

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