Facts of the recession. The truth you need to counter the liberal talking points.

The Real Cause of the Recession. Who "drove the economy into the ditch". 

   At the very beginning of the recession, it was universally called the "Sub-prime mortgage meltdown". The reason being that the collapse of the housing market and associated "derivatives" were responsible for the recession and the banking crisis. The press stopped calling it the sub-prime mortgage meltdown as soon as they realized the real fault behind the collapse.
   The real cause of the recession was banks were forced, by law, to make sub-prime loans to low income people with little or no chance of being able to repay the loans. It was not a lack of regulation as the democrats said. It was a single regulation called the 'Community Reinvestment Act'. It was originally signed into law by Jimmy Carter in 1977. It was a bad law then, but did not lead to this mess we are in till 1995, when Bill Clinton revised the law. After this, virtually anyone with a pulse could get a loan.
   The law of supply and demand, and the law of unintended consequences, caused the cost of homes to raise at rates of 25% and more per year. This runaway increase in the cost of housing would become known as the "Housing Bubble". Keep in mind that many of the Sub-prime loans were no money down. Housing became a fast income commodity. This created the flipping market. They even had shows like "Flip This House."
   Banks, while forced to make the loans, were not required to keep them. After collecting the third good payment, banks could sell the loan to a GSE (Government Subsidized Enterprise). Fannie Mae and Freddie Mack are GSE's. This meant that we the taxpayers are on the hook for all of these bad loans. It gets worse. Fannie Mae and Freddie Mack come up with the idea of bundling the bad loans together and selling them to other banks. These were called 'guarenteed mortgage securities' or GMS's. They were traded like bonds to other banks world wide.
   By 2001, it was becoming pretty clear that this was a dangerous and unsustainable trend. President George W. Bush warned that a collapse of either Fannie Mae or Freddie Mack would have devastating consequences to the economy and to the stock market. Even John McCain warned of the problems ahead.    

McCain’s statement from the Congressional  Record.

Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.

   One of the first things Obama did as a Senator was to block this legislation. Given the warnings by Republicans, the legislation they tried to put in place to stop the disaster, and the full court press by Obama D-IL, Dodd D-CT, Schummer D-NY and the rest of the democrats, I am forced to wonder. How can they be so dishonest as to blame President Bush for what was clearly the fault of the democrats? This was more Obama's fault than President Bush's. Particularly considering his involvment with ACORN and the Community Reinvestment act suit against CITI Group in Chicago, which gave the CRA court binding precidence, and in effect started the housing bubble on it's way.
    The entire time line is laid out in the following video, which the liberals have waged a non-stop war on since the day it came out.
                                 http://www.youtube.com/watch?v=1RZVw3no2A4 
    In 2004, the House Republicans tried to pass legislation to stop the collapse. This was vigorously blocked by the Democrats, with Barney Frank D-MA, Maxine Waters D-CA and Gregory Meeks D-NY, leading the way. They were even nice enough to do it on video;
                                 http://www.youtube.com/watch?v=_MGT_cSi7Rs
Gregory Meeks was the only Democrat with enough integrity to admit it was their fault, but it does not negate the fact it was THE DEMOCRATS WHO DROVE THE ECONOMY INTO THE DITCH. 
   It was not "The Bush taxcuts for the rich" which they admit now, only 2 % were for the rich. The rich meaning more than 1/3 of all small business owners, and the largest source of jobs in the nation. It was not a lack of banking regulations. In fact the new banking regulations once again exempt both Fannie Mae and Freddie Mac. The war on derivitives did not include the derivitives that drove the economy of the entire planet into the ditch.  
   

Reagan on Health Care
http://www.youtube.com/watch?v=fRdLpem-AAs
This should be viewed by everyone before they vote in November.