Who are the Hidden Culprits of the Economic Crisis?
By Con George-Kotzabasis
A retort to: Bush Will Address The Nation
By Steve Clemons The Washington Note September 29, 2008
My dear Steve, I’m saying this with great regret that your ‘amok’ propensity and desire to blame the Bush administration “for the reckless stewardship of America’s economic and security portfolios” for the purpose of justifying yourself of your flippant and irresponsible position on the issues of the war and the economy, is blatantly biased and intellectually dishonourable.
In your eagerness to make your case you totally disregard that the roots of the economic crisis lie in Democratic administrations and their caravanserai of Democratic activists, among whom Barak Obama was one who, as Tahoe Editor says correctly, was “suing banks for not taking riskier& riskier loans.” Fannie Mae, Freddie Mac (The most ‘populist’ of names), and The Community Reinvestment Act, that are the cornerstone of the economic crisis, were the offspring of Democratic administrations. It was “the Clinton administration’s resurrection of Jimmy Carter’s 1977 Community Reinvestment Act which appears to have been the major single factor ( My emphasis) in the origins of American high-risk sub-prime loans.” Under Clinton “banks were required to provide loans on an affirmative action basis to poor inner-suburban ghettoes” irrespective of the latter’s insecure financial position. And it was the Republican senator Phil Gramm who denounced Clinton’s program as “a vast extortion scheme.” Indeed, the US Senate finance committee in 2005, after the warning of Federal Reserve chairman Alan Greenspan of an imminent financial collapse if Fannie Mae’s activities were not reined in, proposed a bill that would increase scrutiny of Fannie Mae’s accountancy mechanisms. The bill however was opposed by the Democrats, while Obama kept his silence, and was lost.
I’m sure if you had taken the above facts into consideration you would not have condemned so gratuitously the Bush administration for the current economic crisis. Once again it was ‘peanut’ politicians and the ignorant crowd of good intentions that has cast America into the present hell.
As I’ve said four days ago in a post of mine on The Atlantic.com, if the corporate greed and the insouciant complacency and unimaginative stand of regulators have brought the American economy to the brink, it will be obscurantist democratic populism and its weak politicians that will push the economy over the abyss.
Once again the economically ignorant populace and politicians in their wrath and outrage to punish Wall Street, are raising the psychologist’s demon of “altruistic punishment” by which ironically they will be punishing themselves and most of all America.