Pelosi on Financial Turmoil:Cannot Afford to Continue Failed Republican Policies

[Wretched Excess]

regulation is what made those risky loans not so risky in the first place.  and what is a "new direction congress", and
what the hell would another a few hundred bucks do solve the fanny mae problem?

and wasn't this chick speaker of the house for the past two years?  to listen to her, you would think she had no more
to do with the federal government than the guy that empties robert byrd's dribble bucket.

Pelosi on Financial Market Turmoil: We Cannot Afford to Continue Failed Republican Economic Policies

Washington, D.C. – Speaker Nancy Pelosi issued the following statement today in response to the troubling news in the financial markets:

“In the midst of a dire economic situation, President Bush this morning characterized recent market developments as an ‘adjustment’ that can be painful for investors and employees of the firms, while Senator McCain said the ‘fundamentals of our economy are strong.’  President Bush, Senator McCain, and their Republican Party are out of touch and apparently ill-equipped to get our economy back on track.

“Millions of Americans are feeling the pain of eight years of disastrous economic policies – job losses, foreclosed homes, reduced home values, eroded pensions, high gas prices and compromised financial futures.  We cannot allow the economic policy failures of the Bush Administration to continue to jeopardize the financial future of millions of Americans.

“Eight years of weakened regulation of our nation’s financial system – including a failure to regulate risky, and often predatory, lending practices – by the Bush Administration and Republicans in Congress have led us to this point, and could further erode our nation’s economic health.

“The New Direction Congress passed a bipartisan economic stimulus package earlier this year, and this summer, we passed the most far-reaching reform of the nation’s housing finance system in a generation.  The House will soon take up another economic package that will create jobs and address some of the most immediate consequences of the Administration’s serious mismanagement of our economy.  I hope the Administration will come to the table to do the hard work of helping address the pain of everyday Americans and begin to stabilize and grow this economy again.”

Link

[DumbAss Tanker]

Although it runs counter to the history of Executive Branch promises of "Two chickens in every pot" and such-like, in reality Congress (which Pelosi and her Dems have controlled for two years) truly controls policy by passing enabling or programmatic laws and then budgeting expenditures for the programs, leaving the President to "Execute" whatever budget authority they choose to grant him, and impotent to carry out any policy he might like but which Congress does not fund.
The main latitude the President has is in response to foreign or domestic emergency situations, for which there are (in effect) slush funds to pay for such contingencies long enough for Congress to decide whether to support the action or pull the rug out from under the President.  The Chief Executive can ASK Congress for the laws to bring his desired programs to life, but Congress and Congress alone has the power to formulate enabling legislation and then fund the programs, so it is Congress which has the power to shape those sought by the President (to the point of distortion if they feel like it), or even initiate entirely contrary programs instead.

[Zeus]

The Government-Created Subprime Mortgage Meltdown
by Thomas J. DiLorenzo

         
The thousands of mortgage defaults and foreclosures in the "subprime" housing market (i.e., mortgage holders with poor credit ratings) is the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers. The policy in question is the 1977 Community Reinvestment Act (CRA), which compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.

The original lobbyists for the CRA were the hardcore leftists who supported the Carter administration and were often rewarded for their support with government grants and programs like the CRA that they benefited from. These included various "neighborhood organizations," as they like to call themselves, such as "ACORN" (Association of Community Organizations for Reform Now). These organizations claim that over $1 trillion in CRA loans have been made, although no one seems to know the magnitude with much certainty. A U.S. Senate Banking Committee staffer told me about ten years ago that at least $100 billion in such loans had been made in the first twenty years of the Act.

So-called "community groups" like ACORN benefit themselves from the CRA through a process that sounds like legalized extortion. The CRA is enforced by four federal government bureaucracies: the Fed, the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation. The law is set up so that any bank merger, branch expansion, or new branch creation can be postponed or prohibited by any of these four bureaucracies if a CRA "protest" is issued by a "community group." This can cost banks great sums of money, and the "community groups" understand this perfectly well. It is their leverage. They use this leverage to get the banks to give them millions of dollars as well as promising to make a certain amount of bad loans in their communities.

A man named Bruce Marks became quite notorious during the last decade for pressuring banks to earmark literally billions of dollars to his organization, the "Neighborhood Assistance Corporation of America." He once boasted to the New York Times that he had "won" loan commitments totaling $3.8 billion from Bank of America, First Union Corporation, and the Fleet Financial Group. And that is just one "community group" operating in one city – Boston.

Banks have been placed in a Catch 22 situation by the CRA: If they comply, they know they will have to suffer from more loan defaults. If they don’t comply, they face financial penalties and, worse yet, their business plans for mergers, branch expansions, etc. can be blocked by CRA protesters, which can cost a large corporation like Bank of America billions of dollars. Like most businesses, they have largely buckled under and have surrendered to their bureaucratic masters.

Consequently, banks in every community in America have been forced to hold a portfolio of bad loans, euphemistically referred to as "subprime" loans. In order to compensate themselves for the added risk of extending these loans, many lenders have increased the lending fees associated with mortgage loans. This is simply an indirect way of doing what banks always do – and what they must do to remain solvent: charging effectively higher rates of interest on riskier loans.

But this is discriminatory!, complained the "community organizations." Thus, if one browses the ACORN web site, one can read of their boasts of having "predatory lending laws" passed in numerous states which outlaw such fees, prohibiting banks from protecting themselves from the added risk involved in making forced loans to "subprime" borrowers.

These are price control laws, and price controls always cause shortages. Normally, banks would respond to such laws by extending fewer riskier loans. But in this case the banks are forced to continue making the marginal loans by their bureaucratic masters at the Fed and the other three federal bureaucracies mentioned above. So-called predatory lending laws therefore force the banks to "eat" the losses. This is undoubtedly a contributing factor to the bankruptcy of dozens of mortgage lenders over the past year.

http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

[DixieBelle]

How's that 9% approval rating working Nancy? That's what? Staff and family members?

[Wretched Excess]

How's that 9% approval rating working Nancy? That's what? Staff and family members?

is it still 9%?  I would have figured that was part "bubble".