According to the president, our current economic issues can be blamed on his predecessor. To say I’m skeptical, is an understatement. This is a very complicated issue, and there are many variables that I am not going to go into here. I do however want to break down a few of the facts that have been reported, albeit not nearly enough by media outlets dedicated to advancing a growth-of-government agenda.
First let me point out, that the economy tanked after the terrorist attacks of 9/11. The White House, USHOR, and Senate at the time were under GOP control. During those 6 years, we enjoyed steady growth of the GDP after those attacks as evidenced here, which didn’t start dropping again until 2008, as Bush completed his term.
In 2006 however, the GOP lost control of both houses of congress. While we so often lay our woes at the President’s feet, many forget that Congress is actually the entity enacting laws and changing our regulatory climate. One of the fundamental differences between the left and the right is the idea of self-reliance versus government assistance. As the right pushed to deregulate, the left pushed to control the marketplace in such a way to promote themselves as the champions of the less fortunate.
The cycle of events, in a nutshell, basically went like this:
Bush recognized that like any industry, there was too much government involvement in mortgage lending and worked with congress to deregulate it, in order to grow our economy after 9/11. As a result, home ownership grew as interest rates fell, and the mortgage industry boomed thanks to a newly freer market.
Democrats took over Congress in 2006 and decided that as mortgage companies became more profitable, they should be required to redistribute the wealth to those less fortunate; a mantra that uniquely separates the modern-day DNC from those of us on the side of liberty. If it worked, not only would the DNC controlled congress look good, Bush would too; which potentially explains his lack of effort in preventing it.
Their intent was to force banks to loan to people who had bad credit, in an effort to increase home ownership among them. While this may seem admirable, it ignores the fact that people are not born with bad credit, but instead no credit. They usually earn that low credit rating by leading a credit risky lifestyle full of wasteful spending and bad career choices. I am not insinuating that there are some people who have bad credit through no fault of their own, but those people barely outnumber the world’s chupacabra population.
Banks, being much more qualified at banking than politicians (something the arrogance of many politicians prevents them from understanding) rightfully objected based on the knowledge that these loans would likely end in default. The left, in order to advance their agenda of helping poor credit risks, insisted banks make these loans lest they face regulatory pressure. To make matters worse, these well-meaning politicians offered to guarantee the loans if they defaulted. When I say they guaranteed them however, let’s be clear that they guaranteed it with OUR money; not their own.
So, banks begrudgingly did what they were compelled to do and made loans they knew were bad. However, this is where it got ugly. Banks have money because they know how to invest. They had a poor investment foisted on them, and the investment had a face value that was clearly much higher than its actual value. Something they understood, but We The People did not.
What happened at this point became the world’s most elaborate and expensive game of “hot potato” as banks scurried to sell these overvalued loans to anyone who would buy them. The banks knew they were junk, and sold them as gold, which is what the left routinely and rightly attack them for; but, can you honestly blame them? The fact is, banks are in business to make money, and they’re damn good at it. If they’re successful, everyone who is either employed by them, owns shares of their stock, or is qualified and needs to borrow money, wins.
While what they did was dishonest, they did what was needed to mitigate a risk that was improperly foisted upon them by Uncle Sam in the first place. If your financial future depended on it, wouldn’t you do it too?
While the left mean well, the issue is that unlike us normal people, many of them don’t actually know the horrible credit risks among us. They assume and behave as if they’re all victims of the rich or just recipients of bad luck. In reality, most are people like my former friend who couldn’t be bothered to show up for work or hold his tongue when disciplined, and wasn’t interested in a reasonable diet or exercise. As a result, he bounced from job to job like a marble in a blender while leaching off anyone who would help him as his health predictably declined. Making an effort to be self-sufficient was of no concern to him as long as he had friends and government assistance who aided and abetted his laziness and irresponsibility.
This behavior is quite common among the many people I know who banks would normally choose to reject. These people do not learn from their mistakes, because do-gooders won’t allow them to fully see the consequences of their actions by letting them hit rock bottom.
If I asked you to walk a tight rope across a couple of 20-story buildings; unless you’re a tightrope artist, you wouldn’t dream of saying yes. If I put a safety net underneath you and take away the risk; all of a sudden, your odds of engaging in such a risky behavior went way WAY up. Something no one should logically do as it is certain death, all of a sudden became something that might be fun. This phenomenon is exemplary of the credit risks among us, walking the credit tight rope because we have a bankruptcy safety net underneath them.
So as the current crop of DNC politicians continue to blame Bush for our economic woes, the fact is he is only guilty of ignorance. He didn’t foresee the impending doom from government compelled lending, and didn’t do something to stop it or warn us. But the villains in this scenario are the government as a whole. They were the impetus as well as being ignorant. Had they listened to the bankers; you know, the people who actually know what they’re doing—none of this would have happened.
To his credit, President Bush did accept his own culpability in not doing something about the storm that was brewing, but predictably, Barney Frank and his ilk continue to blame Bush without a shred of decency to accept their part in this mess. This lack of humility and responsibility sticks to many politicians like cat hair on a sweater.
Since the left-leaning news agencies of today can’t be bothered to assign fault to Democrats and Republicans alike, it’s incumbent upon people like me to do their job for them. Those of us with the knowledge of the events that transpired must not only blame Bush-the-ignorant, but start blaming people like Barney-Frank-The-Complicit. As so often is the case, the problem is, and likely always will be, more government. When they stray away from the duties defined in our Constitution, We the people become We the victims.