Addison Gardner: Always Right
September 23, 2008
Last week Speaker Pelosi and the Senate Majority Cadaver dodged two dangerous admissions: Pelosi denied that Democrats owned any responsibility for the nation’s banking crisis, and Harry Reid arose from his slab long enough to deny the Senate a resolution honoring American troops.
Never in history has partisan petulance flapped so proudly on a flagpole.
Even Obama has come forward ” gritting his porcelain caps ” and congratulated the troops, admitting that his predictions of military failure in Iraq might have been premature.
When Nancy Pelosi was asked, “Do Democrats deserve a share of the blame for the current crisis on Wall Street?”, she blinked around bulging eyes and responded, “No!”
Looking like a fish that’d been hauled up from the depths too fast ” Pelosi prodded Steny Hoyer off her shoulder, and he ejaculated, “The average American is paying the price for the Republicans’ failed economic experiment!”
Good job, Steny. Gather another quarter in your little red cap.
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If Democrats own no measure of responsibility for last week’s exploded banking balloon, then George Bush isn’t responsible for the mess in Iraq; Lindsay Lohan is sober and straight; and Jeffrey Dahmer was a vegetarian divinity student.
Let’s hop into Professor Peabody’s Wayback Machine and set the year to 1977. We leave Madam Speaker gasping for air on the dock, and ” as the mists of deceleration clear ” we witness Democrat Speaker Tip O’Neill presiding over a signing ceremony for legislation grandly christened, “The Community Reinvestment Act.”
Not only was a Democratic president at the helm (Jimmy Carter) when the Community Reinvestment Act set sail for North Atlantic ice floes, but this brittle-hulled legislation was crewed by a Democratic Congress comprised of a veto-proof Senate (61 seats) and a House dominated by a Democratic majority (292 Democrats vs. 143 Republicans).
A similar collaboration between Jimmy Carter and Tip O’Neill launched the USS Department of Education, which ” crewed by her 3 million National Education Association union members ” has been electing Democrats and bouncing off icebergs in the mists of student illiteracy for 30 years, now.
Asked whether the Democrats deserve a share of the blame for the current crisis in American classrooms, Pelosi responded, “No!” and pointed to President Bush’s “failed initiatives.”
The Community Reinvestment Act is as dense as any piece of legislation ever penned, but its aim is easy to understand. Democrats ” and their community organizer “constituencies” ” argued that it was “discriminatory” for banks to deny mortgages and business loans to people with poor collateral, poor credit, and dubious ability to repay their loans.
Legislators replaced common sense with gouts of political oration about “redlining inner city communities,” “racist banking practices,” and other electioneering formulations that protected incumbency, but shoved bank solvency to the end of a bending limb.
The CRA allowed legislators to bully banks into loaning money to people who simply weren’t credit-worthy. The only “collateral” they possessed was electoral: They could repay Democratic lawmakers on Election Day.
Now, let’s fast-forward to 1993, when the Clinton administration further liberalized (a.k.a. “reformed”) the already anemic lending restraints of the CRA and created the President’s Community Development Bank, which “…increased lending efficiencies, reduced paperwork, and guaranteed banking services to inner cities and distressed rural communities around the country.”
With an effective starting date of 1995, the newly liberalized CRA guidelines encouraged now notorious “subprime mortgages.” Subprime lending ” also called “second chance lending” ” is another euphemism for “lending at high risk” to people and/or businesses that wouldn’t ” in a world bereft of politicians ” qualify for loans.
Overnight, agencies like Countrywide Financial sprouted like mushrooms on a rotten log.
The Clinton administration’s calculus weighed the risk to the nation’s banking system against the political rewards accruing to the president and his Democrat Congress, then passed out signing pens to smiling legislators.
As Clinton advisor Paul Begala is famous for observing about executive orders, “Stroke of the pen, law of the land. Kinda cool.”
In 2003, the Bush administration attempted to increase oversight and add a new regulatory arm under the auspices of the Department of the Treasury, with particular emphasis on the monitoring of Fannie Mae and Freddie Mac, the largest holders of CRA subprime paper.
These regulatory changes were opposed by Democrats, with Barney Frank declaring, “These two entities ” Fannie Mae and Freddie Mac ” are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
The ideological impulses that spawned the Community Reinvestment Act were the parent of today’s Wall Street collapse. This is “cause and effect” illustrated in its simplest terms.
Our current blighted economy had its origins in the well-fertilized soil of Jimmy Carter’s peanut farm, and a Democratic Congress drunk on its own unchecked power.
Today’s Wall Street collapse is proof that banking and ideological “Billy Beer” don’t mix.
When Speaker Pelosi was given control of a Democrat Congress two years ago, she promised to “drain the swamp” of corruption, eliminate earmarks, end partisan bickering, and restore public faith in the legislative process.
Instead, Pelosi’s Democrats have produced the second highest earmark expenditures in history, the lowest congressional approval ratings in history, and a Chairman of the House Ways and Means Committee, Charlie Rangel, who’s being investigated for tax evasion, while refusing ” with the Speaker’s full support ” to step down.
Asked whether Rangel was, in part, responsible for his troubles, the Speaker responded, “No!”
Nancy said “no” a lot last week.
“No! No! No!”
Addison Gardner’s column appears every other Tuesday in The Aspen Times.