Gary Hubbell: The Redneck Tree-hugger
The catalyst for the credit crisis is a combination of political correctness, greed and power. Do you recall how the Clinton administration boasted about increasing home ownership in the 1990s? Google it and see how many results come up. Theres a Sept. 30, 1999 article by Steven A. Holmes in The New York Times that is particularly telling. Mr. Holmes writes about the Clinton administrations goal of minority home ownership, and how credit requirements were relaxed so that blacks, Hispanics and other minorities could buy homes.To hell with FICO scores if you were living and breathing, and a different color than white, you deserved your own home. By that definition, it was a spectacular success. The number of mortgages extended to Hispanic applicants jumped by 87.2 percent from 1993 to 1998, according to Harvard Universitys Joint Center for Housing Studies, the article states. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 percent and the number of Asian Americans by 46.3 percent. Fannie Mae and Freddie Mac backed all the mortgages. Who the hell are Fannie Mac and Freddie Mae? These are acronyms for the quasi-governmental organizations Federal National Mortgage Association (Fannie Mae) and the Federal Home Mortgage Corporation (Freddie Mac). The definition of quasi-governmental means license to steal, and steal they did.Would someone please explain to me why a quasi-governmental organization paid salaries of more than $90 million in six years to its director, and was allowed to spend millions of dollars in lobbying congressmen? Fannie Maes chairman, Franklin D. Raines, beneficiary of the $90 million, is now a major advisor to the Barack Obama campaign. Democrats pushed ahead for more and more minority and subprime lending as a matter of government policy.You see, if people who live at the bottom of the pay scale suddenly are able to qualify for drumroll Show em what theyve won, Bob! A BRAND NEW HOME!! they tend to vote Democratic. In fact, several major banks such as Wells Fargo and Citibank began offering subprime loans for illegal aliens. At the same time, lenders were prohibited from asking the citizenship status of their loan applicants. After all, whos checking citizenship status at the voter registration office, anyway? Why do you think the Democrats fought so hard against the idea of a photo ID for voter registration?The notorious NINJA loans no income, no job, no assets were the nadir of the cycle. Thats where ACORN comes in. Street activists such as Barack Obama were teaching tactics of radicalism to further their cause of spreading the wealth. So whitey banker boy wont loan a poor black janitor $300,000 to buy a new house? Picket whitey banker boys house with a jeering crowd of black folk chanting for justice. Threaten a boycott. See how long it takes him to fold, facing charges of racism and preferential treatment. Suddenly a 720 FICO score wasnt what it used to be.Enter greed. Wall Street tends to hire really bright kids from Harvard Business School, Wharton, Duke and other schools who churn out ambitious, greedy people by the thousands but they dont teach morals, and the punks rarely have much life experience. The operative principle is called OPM Other Peoples Money. When you contribute to your IRA, 401K, or PERA pension fund, youre feeding the beast, giving them capital to fund their schemes. The scheme of the 1990s was called derivatives. The idea was to take all those subprime mortgages and bundle them into a package to spread the risk. You rub elbows with the guys at Standard & Poors at a cocktail party and explain your brilliant new scheme, and presto-bango, these subprime mortgages are suddenly AAA-rated securities.So, New York being the trusted financial capital of the world, the pool of investors deepened and widened, until we had pension funds for teachers in Finland, chicken growers in Thailand, and German autoworkers buying our derivatives. Midlevel account executives at New York investment banks were making $20 million annual bonuses, mostly in stock options at the companies where they worked.When George Bush came into office in 2000, his advisors told him that the derivatives and subprime lending were potentially disastrous problems. Republican congressmen and senators are on record as warning of the shaky nature of these investments. The problem was that Wall Street executives were making a huge payday, day after day, and anyone who has ever been on Wall Street will affirm that they hate to lose. Its get paid big, every day, and cut the nuts off anyone who stands in your way, because youre not on Wall Street to lose. Its a huge ego trip and testosterone rush, and greed is king.George Bush was beholden to Wall Street. His Harvard Business School chums were making a killing and wanted to keep it that way. Any reduction in obscene profits would be seen as a betrayal. So W. went on record with a few tepid warnings about the subprime mess and several influential Republicans sounded stronger warnings, but they were shouted down in the feeding frenzy. Democrats wanted votes and greedmongers wanted profits. It was a beautiful thing until it collapsed.If youve ever filled out a loan application and wondered whose business is it what race you are, just know the Feds are keeping track so that they can trumpet their advances in minority home ownership. A couple of years ago, my friend Dave Alvarez recalls getting a call from FHA asking if hed like to switch his mortgage over to an FHA loan. Puzzled, he wondered why and then realized, My name ends with a Z. They want to get me off the books. Two years ago, someone in the federal government realized this thing was going under. I wonder if theyre keeping track of how many blacks, Latinos, and Asians (not to mention illegal aliens ) have defaulted on their subprime loans. Will they ever trumpet those statistics in The New York Times? Listen, people, its not about race. Its not about gender or anything else. Its about ability to repay a debt. In the meanwhile, in the name of political correctness, power grabbing and greed, we have squandered our international reputation as the financial center of the world. It is a status that we may never regain. Me, Ive sometimes checked Pacific Islander. Ive been to Hawaii. Its where my spiritual heart is sometimes. They dont have a box for mountain man.
Gary Hubbell is rancher, hay grower, horseman, hunter, and ranch real estate broker. He lives in Crawford, Colo. Gary can be reached through his website: http://www.aspenranchrealestate.com.
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The future of the Aspen-Pitkin County airport took a significant step forward Thursday. Pitkin County commissioners decided 4-1 to accept the recommendation of a community-based committee and leave the runway where it is, a bedrock decision in the long process toward a new terminal and airfield.