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President Obama is often described as an orator. Whether great or good or above average the description in its various forms is widely used after Mr Obama speaks in public. Not taking those speeches or public statements at face value is the task. It is of course not uncommon for politicians to use speeches to further their agendas. The President’s recent speech is no exception. How one interprets a politician’s speech is the task.

What Mr Obama’s words suggest is who is at fault although he states from time to time that is not the purpose. Without supporting details on how we arrived at the situation we are in now his words in this, the second look at his speech, one could get the idea he is pointing blame on his political opposition. Here is the next excerpt from his speech being offered here with some supporting details.

‘In other words, we have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.’
(source: publicly available transcript of President Obama’s 02/24/2009 speech before a joint session of Congress.)

The excerpt and link below features Franklin Raines and some others involved with Fannie or Freddie’s meltdown. Could these be some of the people of which President Obama speaks?

The executives said Congress pressured the companies to finance lower-income borrowers while regulators did little to curb the increasing risk that ultimately led to a government takeover that wiped out most shareholders and potentially saddles taxpayers with a $200 billion tab. James Lockhart, the companies’ regulator, said in September that exerting greater control over Fannie and Freddie was impeded by “their lobbying power.”

Maybe Mr Obama missed the ‘transfer of wealth’ being created in the story below which includes those who were not wealthy. They were so ‘not wealthy’ a subprime loan was their only option and some were only too happy to oblige. At the beginning that may not have included banks or regulators.

In a recent meeting with the Council on Foreign Relations, Barney Frank–the chair of the House Financial Services Committee and a longtime supporter of Fannie and Freddie–admitted that it had been a mistake to force homeownership on people who could not afford it. Renting, he said, would have been preferable. Now he tells us.

Long-term pressure from Frank and his colleagues to expand home ownership connects government housing policies to both the housing bubble and the poor quality of the mortgages on which it is based. In 1992, Congress gave a new affordable housing “mission” to Fannie and Freddie, and authorized the Department of Housing and Urban Development to define its scope through regulations.

Shortly thereafter, Fannie Mae, under Chairman Jim Johnson, made its first “trillion-dollar commitment” to increase financing for affordable housing. What this meant for the quality of the mortgages that Fannie–and later Freddie–would buy has not become clear until now.

On a parallel track was the Community Reinvestment Act. New CRA regulations in 1995 required banks to demonstrate that they were making mortgage loans to underserved communities, which inevitably included borrowers whose credit standing did not qualify them for a conventional mortgage loan.

To meet this new requirement, insured banks–like the GSEs–had to reduce the quality of the mortgages they would make or acquire. As the enforcers of CRA, the regulators themselves were co-opted into this process, approving lending practices that they would otherwise have scorned. The erosion of traditional mortgage standards had begun.

Like most debates with partisan influence those who support one party or the other line up with the evidence which favor their argument. It is likely there are culprits on both sides of the aisle in this case also. But if Mr Obama wants to present his version of reality the rest of us must present ours. And perhaps if that is done for a long enough time the truth will prevail, we can fix what’s wrong and move forward to more successful times.

So please Mr President, stop the insanity. You have made many claims including reaching across the aisle, transparency, accountability, no lobbyists in your administration, doing the people’s business and on and on. Yet all you have done to date suggests otherwise. Instead of changing Washington and eliminating politics as usual it appears we are in for more of the same. If you expect to charm your way into continuing politics as we know it we will not be fooled. Put another way, if you are going to do what most suspect have the common courtesy to kiss us first, figuratively speaking of course.

Stanford Matthews
MoreWhat.com

Oh, where is the omni-pork in your neighborhood? (Michelle Malkin) 

This entry was posted on Thursday, February 26th, 2009 at 7:32 am and is filed under Public Affairs, wordpress, Politics, obama, Opinion, Congress. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.