“What Just Happened?” – 90 Seconds on the US Financial Meltdown

UPDATE: Don’t believe me? How about one of America’s leading economists, who happens to also be African-American, Thomas Sowell: “Do Facts Matter?”

If you want to cut to the chase, and understand the root problem of the current US financial meltdown, watch this 90-second video:

As the sharp drop in US consumer confidence takes its toll on my own business, I’ve had a chance to read quite a bit about what has happened. Here’s my take, in layman’s terms:

Democrat social engineers in US elected office – starting with Jimmy Carter and his Community Reinvestment Act, and Bill Clinton’s radical expansion of government-mandated sub-prime loans through Fannie & Freddie in the late 1990s – created a real-estate bubble fuelled by irresponsible people receiving credit they could never repay unless home prices continued to rise forever. But as the Clinton-era rules created positive fiscal and political incentives to keep the bad loans going, the risks were ignored by the issuing banks. The issuing banks, and their enablers at Fannie & Freddie, assumed that, in the case of a meltdown, they would be bailed out. 

In order to hide the extreme risk of this mass of bad loans, the Mortgage industry conspired with Wall Street investment bankers to hide these loans amongst a variety of better-quality assets in Asset-Backed Commercial Paper, spreading the risk throughout the world.

When the Bush White House, and certain Republican congressional leaders, raised the alarm about this powderkeg of a problem starting in 2001, they were thwarted time-and-again by dissembling, corrupted Freddie & Fanny-connected Democrats (as shown in the video), and possibly some connected Republicans as well, although I’ve never seen names. Said politicians knew the whole ponzi scheme would eventually blow up; but Plan B was always in their back pocket: BAILOUT at the hands of taxpayers.

The bottom line: every penny of this nearly-trillion-dollar bailout is essentially a socialist transfer of wealth, from hard-working American taxpayers and international investors, to irresponsible non-working fools who will continue to be propped up in homes they never should have owned in the first place.

In other words: a massive back-door welfare scheme, who’s bill has finally come due.

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7 Comments

Filed under Economics and Business, Political Corruption, Statism Gone Wild

7 responses to ““What Just Happened?” – 90 Seconds on the US Financial Meltdown

  1. Philanthropist

    The Democratic media machine is successfully pinning this on the Republicans and giving the Dems the edge in the election. If a radical socialist like Obama makes it into the White House at the same time there’s a Dem Congress look out – this economic train wreck will last for years, it’ll feel like the 70’s all over again.

  2. TnT

    So let me get this straight. For 8 years, the Republicans knew about this, and did nothing? You want us to believe, that they’re hands were tied, and couldn’t do a thing, for 8 years.

    For 2 terms we had a right wing government running the US, had full control of the white house, congress, -and- the senate for most of those 8 years, and still, they didn’t act to reverse this great socialist disaster?

    My. Them socialists sure are crafty.

    Either that, or man are we gullible.

  3. At least get your facts straight, friend. Republicans held the House and Senate only for 4 of the 8 years (2003-2006), never had a veto-proof majority in the Senate, and had to deal with liberal Republicans like Lugar, Hagel, and Specter when they did hold the Senate.

    Talk about gullible.

  4. (two comments from someone calling himself “Really” have been deleted. I delete all comments from anonymous posters using fraudulent e-mail addresses. If you want to comment, have the decency to use a valid e-mail address and stand behind your words.)

  5. TnT

    So you are completely letting the republican administration of any fault in this.

    I’m sorry, but you are very, very gullible. I happen to believe there were many people who can be faulted along the way, but your usual ‘right is right and left is bad’ nonsense creeps in and shows how gullible you can be to believe the last 8 years they couldn’t do anything.

    Give me a break.

  6. HawkWatcher

    Why would one be accused of being gullible when the facts are presented? Republicans warned, Democrats pooh-poohed. End of story. Left is bad.

  7. john Smith

    What happened? Maybe a bunch of idiots voted for an idiot, and spent a trillion dollars on a war?

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