Thomas Sowell puts blame where it belongs: 

It was liberal Democrats, led by Senator Christopher Dodd and Congressman Barney Frank, who for years– including the present year– denied that Fannie Mae and Freddie Mac were taking big risks that could lead to a financial crisis.

It was Senator Dodd, Congressman Frank and other liberal Democrats who for years refused requests from the Bush administration to set up an agency to regulate Fannie Mae and Freddie Mac.

It was liberal Democrats, again led by Dodd and Frank, who for years pushed for Fannie Mae and Freddie Mac to go even further in promoting subprime mortgage loans, which are at the heart of today’s financial crisis.

Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush’s Secretary of the Treasury, five years ago.

Yet, today, what are we hearing? That it was the Bush administration "right-wing ideology" of "de-regulation" that set the stage for the financial crisis. Do facts matter?

We also hear that it is the free market that is to blame. But the facts show that it was the government that pressured financial institutions in general to lend to subprime borrowers, with such things as the Community Reinvestment Act and, later, threats of legal action by then Attorney General Janet Reno if the feds did not like the statistics on who was getting loans and who wasn’t.

Is that the free market? Or do facts not matter?

His article also deals with how Obama benefited from Fannie Mae. He concludes: 

The country does not deserve to be put in the hands of a glib and cocky know-it-all, who has accomplished absolutely nothing beyond the advancement of his own career with rhetoric, and who has for years allied himself with a succession of people who have openly expressed their hatred of America.

 In addition to all his other mistakes or careless lies, Biden misrepresented facts about the constitution, which he seems not to know much about despite his decades in the Senate. 

This from Power Liine:

This isn’t what’s conventionally described as a gaffe, and it won’t swing any votes, but last night Joe Biden garbled the Constitutional role of the Vice President. I wanted to read the transcript before commenting; here was Gwen Ifill’s question:

Governor, you mentioned a moment ago the constitution might give the vice president more power than it has in the past. Do you believe as Vice President Cheney does, that the Executive Branch does not hold complete sway over the office of the vice presidency, that it it is also a member of the Legislative Branch?

Here is Biden’s answer, in full:

Vice President Cheney has been the most dangerous vice president we’ve had probably in American history. The idea he doesn’t realize that Article I of the Constitution defines the role of the vice president of the United States, that’s the Executive Branch. He works in the Executive Branch. He should understand that. Everyone should understand that.

And the primary role of the vice president of the United States of America is to support the president of the United States of America, give that president his or her best judgment when sought, and as vice president, to preside over the Senate, only in a time when in fact there’s a tie vote. The Constitution is explicit.

The only authority the vice president has from the legislative standpoint is the vote, only when there is a tie vote. He has no authority relative to the Congress. The idea he’s part of the Legislative Branch is a bizarre notion invented by Cheney to aggrandize the power of a unitary executive and look where it has gotten us. It has been very dangerous.

 For a man of Biden’s experience, this is a surprising series of misstatements. First of all, he gets wrong one of the most basic facts about the Constitution: Article 1 establishes the legislative branch, not, as Biden said, the executive branch. This is not exactly an obscure fact… 

Second, it simply isn’t true that the Constitution treats the Vice President only as a member of the executive branch. The Vice President is mentioned in Article II as part of the executive branch, but he is also given legislative powers by Section 3 of Article 1, which establishes the Senate:

The Vice President of the United States shall be President of the Senate, but shall have no Vote, unless they be equally divided.

Vice President Cheney’s "bizarre notion" is in keeping with the plain text of the Constitution.

Finally, Biden misstated the Vice President’s role in the Senate. It isn’t true that he "preside[s] over the Senate, only in a time when in fact there’s a tie vote." The Constitution contemplates that the Vice President will be the full-time President of the Senate, replaced by a President pro tempore "in the absence of the Vice President." It’s true that the Vice President only gets to vote in case of a tie; but, of course, that’s the only time it matters.

If Joe Biden were a high school student taking a test on the Constitution in a government course, he would get a C or a D. Some would say his mistakes were minor, and, as I said, they certainly won’t swing any votes. But it is distinctly odd that a man who has been in the Senate for more than three decades doesn’t understand the Constitutional role of the Vice President with respect to that body.

 

 From the National Review:  (It would be nice to know who the emailer to ‘the corner’ was who apparently carried out such an important military mission.)

Joe Biden threw out a lot of bunk on foreign policy tonight, too bad Gov Palin didn’t have the foreign policy wonkishness to call him on it.  Most ridiculous and downright strange was his contention that the Bush administration let Hezbollah into Lebanon, and then when “we threw them out” – whatever that means, he and Obama said NATO should go in but nobody took them up on it and now Hezbollah was all over Lebanon and that’s a problem.  What?

Well, Hezbollah’s been there since the early 1980’s of course, blossoming throughout the 1990’s to become now over a third of the population of Lebanon with 2 cabinet members, a host of parliamentarians, and schools, clinics, and basically an entirely separate governance infrastructure in all of southern Lebanon and elsewhere.  I suppose the throwing out of Hezbollah was the dismal and failed Israeli campaign of 2006 which dislodged nothing?  Or was it Israeli’s occupation of Southern Lebanon from 1982 – 1999?  Don’t remember an Obama position on NATO replacing Israeli occupation then.  As for NATO going in after the 2006 debacle, well, I’m the one who rounded up 8,000 French and Italians and a few thousand other Euros to go into Southern Lebanon along with an assortment of others in August 2006 and while working that issue for about 40 straight days I don’t remember a peep from Biden or Obama about NATO – which wouldn’t be budged despite our intense pressure in Mons.  So, we went straight to Rome and Paris.  Que sera, sera.

 From Little Green Footballs:

Another absurdly wrong statement from Joe “Foreign Policy Expert” Biden, who very obviously does not know the difference between the Gaza Strip and the West Bank:

Here’s what the president said when we said no. He insisted on elections on the West Bank, when I said, and others said, and Barack Obama said, “Big mistake. Hamas will win. You’ll legitimize them.” What happened? Hamas won.

 Joseph Calhoun writes in Real Clear Markets (read the whole thing here):

Now markets are waiting on pins and needles as the politicians haggle over the details of the latest bailout attempt by the Fed and Treasury. This has introduced another roadblock to the re-capitalization and reorganization of the financial industry. Companies that are in need of capital are waiting to see if the plan will bail them out of their difficulties. If Hank Paulson is willing to pay an above market price for their bad loans, why should they dilute their equity now? Why not wait until they can offload the bad paper on the taxpayer and raise capital at a better price? Why take Tony Soprano terms when Uncle Sam is willing to let the taxpayer take the hit for you?

If this bailout goes ahead in its current form and the Treasury pays a high enough price to recapitalize the troubled banks, what has been accomplished? The plan may be enough to induce the banking sector to start lending again, although frankly, I don’t know why we would want institutions who have shown such poor judgment in the past to stay in that business. This plan short circuits the capitalist model which would allow the stronger, well-run institutions to gain market share and/or expand profit margins. The long-term effect will be to lower the overall return on capital in the financial services industry. The government apparently believes that the key to economic recovery is to allocate limited resources in an inefficient manner. Does that make sense?

Paulson and Bernanke have testified to Congress that the market for the mortgage paper rotting on the balance sheets of bad banks is not working. They have not offered an explanation of why that market is not functioning except to blame the complicated nature of some of the securities. That explanation begs the question of how exactly the Treasury believes it will be any better at deciphering the mortgage market. A more logical explanation is not a lack of willing buyers, but a lack of willing sellers. The Fed has allowed institutions to use collateral of ever falling quality to secure loans from the Fed. If a bank can finance its activities through the Fed and keep the bad loans on the balance sheet, what incentive does it have to sell? Selling will reveal the true condition of the company and will also force other institutions to do the same under mark- to-market accounting. The Fed is the one keeping the market from functioning. The Treasury does not need to enter the market for it to start functioning; the Fed needs to leave the market.

Paulson has said that the cause of the current problems is the housing deflation, but that ignores the elephant in the living room. The housing bubble, which was concentrated in a relatively small number of states, was caused by the reckless actions of the Greenspan Fed. The consequences of that bubble have been exacerbated by the Bernanke Fed. The market is functioning as it should. It is the Fed that is not functioning correctly. There is no reason we had to go through either the bubble or the aftermath. We got into this mess because we tried to avoid the consequences of the Internet bubble. We will only make things worse by trying to avoid the consequences of the housing bubble.

We are not on the verge of a new depression. The housing bubble collapse in California, Florida and a few other states is not enough to bring down the entire banking system. Investors who made mistakes in these markets should be held responsible and those who navigated the Fed-distorted market should be rewarded for their wisdom and prudence. Enacting the Paulson plan will not allow that to happen and our economy will suffer for it in the long run. The Japanese tried to prop up failed banks in the aftermath of the bursting of their twin bubbles and the result was 15 years of stagnation. Why are we emulating a strategy that is a demonstrable failure? A better alternative would be to allow capitalism to work as it should and stop the interventions of the Fed in the money market. Trust capitalism. It works.

 

 From an editorial in Investor’s Business Daily:

Why does Obama pay homage to the middle class now? Presidential votes. He’s using the middle class as a means to an end — the end being the power to enact his radical agenda. In this, he’s following his hero Saul "The Red" Alinsky’s playbook.

Alinsky, the socialist street agitator who wrote "Rules for Radicals," detested the bourgeois "materialism" of the American middle class. But he advised his student radicals to court the middle class, even radicalize them when possible in favor of the cause.

Don’t be like 1960s revolutionaries who made fun of the bourgeoisie, he warned. Learn the language of the middle class; share their experience. "Start them easy," he said. "Don’t scare them off."

Alinsky revolutionaries don’t flaunt their radicalism. They keep their hair trimmed and wear suits and ties. They’re never outwardly rude. They don’t use vulgar language in public. They show respect for authorities. Some even have mortgages and families.

But don’t be fooled. Obama is an elitist who skipped the middle class and went straight to his Georgian mansion. He doesn’t share your values, but he wants you to share your earnings to pay for his radical social experiment.

As McCain accurately argued during the debate, Obama this March voted for a Senate measure raising taxes on workers making $42,000 a year. So who’s really on the side of the middle class?

 

 From today’s Investor’s Business Daily:

Here’s how James B. Lockhart III, head of the Office of Federal Housing Enterprise Oversight, described the two companies back in 2006, before the meltdown occurred:

"The result of (Fannie’s and Freddie’s) rapid growth unconstrained by market forces and a weak regulator was years of mismanagement, flagrant earnings manipulation, and systems-and-controls problems. Managements of both companies were forced out, earnings were misstated by an estimated $16 billion, fines exceeding one-half billion dollars were imposed, and remedial costs will exceed $2 billion."

Yet Congress did nothing. Fannie and Freddie continued to enjoy a virtual monopoly of the housing finance market, holding nearly half the nation’s $12 trillion in mortgage assets in 2007.

And what happened to Fannie’s and Freddie’s top executives, almost all with deep ties to the Democratic Party? Did they get perp-walked to prison like WorldCom’s Bernie Ebbers, Tyco’s Dennis Koslowski, Adelphia’s John Rigas, ImClone’s Sam Waksal, or any of the others who did time for corporate misdeeds in the early 2000s?

No. Jim Johnson, former Walter Mondale aide, became head of Barack Obama’s vice presidential search committee. Franklin Raines, who headed Fannie from 1998 to 2004, the years of its worst excesses, pocketed nearly $100 million in pay and bonuses from Fannie. He, too, became an adviser to Obama.

Other Fannie-Freddie alumni did equally well. Rep. Rahm Emanuel has been front and center in crafting a new rescue bill. Ex-Clinton Justice official Jamie Gorelick careens from career catastrophe to catastrophe, and still gets top jobs. It pays to have ties.

Meanwhile, as previously documented, Rep. Barney Frank and Sen. Chris Dodd repeatedly thwarted reforms. Yet today they stand front-and-center as Democrats try to "fix" a problem they created.

As such, any investigation into Fannie and Freddie must include Congress, both current and past.

There’s lots of evidence that the two mortgage giants had become little more than taxpayer-guaranteed front companies for Democrats, who used them to reward supporters with cheap loans and to provide jobs for out-of-work politicians.

 Thanks to our commentator Dan W. for directing us to this series of cartoons. 

It tells the sorry tale of ‘why the collapse?’ for bitter laughs, and we think accurately enough (though it doesn’t deal with how the ideology of the left made it all possible).

 Ken Timmerman writes about secret foreign funds being donated to the Obama campaign. 

Look who want Obama to be elected – and consider why they do:

In June, Libyan leader Moammar Gadhafi gave a public speech praising Obama, claiming foreign nationals were donating to his campaign.

“All the people in the Arab and Islamic world and in Africa applauded this man,” the Libyan leader said. “They welcomed him and prayed for him and for his success, and they may have even been involved in legitimate contribution campaigns to enable him to win the American presidency…"

 Though Gadhafi asserted that fundraising from Arab and African nations were “legitimate,” the fact is that U.S. federal law bans any foreigner from donating to a U.S. election campaign.

 What do ‘community organizers’ do? What did Obama do as a ‘community organizer’? What is ACORN? How has it been funded?

Stanley Kurtz  writes in a must-read article in the New York Post:

To understand the roots of the subprime-mortgage crisis, look to ACORN’s Madeline Talbott. And to see how Talbott was able to work her mischief, look to Barack Obama.

Then you’ll truly know what community organizers do.