Monday, September 29, 2008

Bailout Teaches Us What A Community Organizer Is

It’s annoying to see Democrat Politicians like Nancy Pelosi spin the bailout circumstances by trying to make the main architects of this disaster, Senator Chris Dodd and Congressman Barney Frank into its heroes. When first addressing the nation Sunday afternoon, ostensibly to explain where Congress stood on this measure, she spent the first ten minutes blaming the famous “failed policies of the Bush Administration” for the mess. Certainly greed and recklessness on Wall Street played a big part, and certainly there is enough blame to go around, but, by far, affirmative action for homebuyers and corruption on the part of Congressional Democrats outweigh all other causes.

These are the people who got huge contributions from Fannie Mae and Freddie Mac; these are the people who stymied all attempts by President Bush, Senator McCain and others to rein in the nonsensical lending practices forced on financial institutions by the Clinton-directed expansion of the Community Reinvestment Act (CRA) and the cronies he appointed to carry out this madness. These are the people we are empowering as never before if we elect the “community organizer”, Obama, to the Presidency. We have learned this week just what a “community organizer” is and just what he does. Notice Reverend Wright’s role.

Financial Affirmative Action

9/29/2008 American Spectator (Excerpts)

"When the history of the Great Economic Meltdown of 2008 is written, in-your-face shakedown groups like the Greenlining Institute will be held to account.

Greenlining, headquartered in Berkeley, California (where else?), is a left-wing pressure group that threatens nasty public relations campaigns against lenders that refuse to kneel before its radical economic agenda. Its principal goal is to push politicians and the business community to facilitate "community reinvestment" in low-income and minority neighborhoods.

The Greenlining name is a play on the unlawful practice of "redlining." That's when financial institutions designate areas, typically those with a high concentration of racial minorities, as bad risks for home and commercial loans. The Institute wants banks to give a green light to loans in these areas instead.

Recently profiled by John Gizzi, Greenlining uses carrot-and-stick tactics to blackmail public agencies, banks, and philanthropists to achieve its objectives. The Institute brags it has threatened banks into making more than $2.4 trillion in loans in low-income communities....

Activist groups were encouraged to agitate by the Carter-era Community Reinvestment Act, which enshrined in law a kind of lending protection racket. Banking regulators were given the power to make trouble for banks that failed to lend enough money to so-called underserved communities. Banks that paid enough -- whatever that means -- got left alone, but banks that didn't, got their legs broken....

After CRA came into effect, Saul Alinsky-inspired "community organizer" groups such as Greenlining, ACORN, and National Council of La Raza got into the shakedown business. They preach the hateful class-warfare rhetoric of their fellow community organizers Jeremiah Wright, Jesse Jackson, Al Sharpton, and Michael Pfleger

They rage against capitalism and demand crushing taxes and aggressive wealth-redistribution programs. They demand more government spending on social programs, a higher minimum wage, and gun control. Depending which way the economic wind is blowing, they demand more subprime lending, or curbs on subprime lending, which through the magic of dysphemism, is linguistically transformed into "predatory lending." American Spectator

Thankfully, although some conservative Republicans just didn’t seem to ‘get’ it, Republicans in Congress managed to force changes in the bailout bill that we hope will be enough to avoid making this measure into a suicide pill for the free-market capitalism that has made this country prosperous and great.
September 29, 2008, Wall Street Journal (Excerpt)

“Thanks to the House GOP's intervention, the Paulson plan is also better than it would have been. Republicans helped to eliminate the Barney Frank-Chris Dodd slush fund for liberal housing lobbies; a plank to let judges shield deadbeat homeowners from bankruptcy laws; and a ploy to stack bank boards with union members.

The details of the taxpayer "protections" in the bill also seem workable, at least based on what we had heard by deadline yesterday evening. Banks that sell more than $300 million in securities to Treasury will only be able to deduct from their taxes $500,000 in compensation for their five most senior executives.

Something like this was inevitable as political cover, and it's hard to argue that the Italian suits at Goldman Sachs or Morgan Stanley don't deserve everything they won't get if they dump their mistakes on the feds. But one unintended consequence will be to drive the most talented financial managers away from these banks and into hedge funds and private equity, where they won't be subject to such compensation caps. Revenge is overrated as a policy design.” Wall Street Journal

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