It seems that in order to succeed in politics one has to become a master of the blame game. Politicians have a great talent for causing chaos and disaster, then blaming their political opponents for the damage. Barney Frank, the gender challenged Representative from Massachussetts who is chairman of the House Financial Services Committee, recently said he thinks the people who are responsible for the financial market and economic collapse should be tried as criminals. That is a good idea. Barney Frank and many of his Democratic Party masters of disaster cohorts would be at the top of the list.
Certainly there is plenty of blame to go around. That includes the folks at Fannie Mae, Freddie Mac, Countrywide, AIG, Bear Stearns, Lehman Brothers, Merrill Lynch and other debt crazed financial institutions that created the gratuitous, pointless, toxic investment vehicles that fueled the catastrophic financial pandemic, and then traded among themselves for artificial profits. It includes the intellectually arrogant and common sense challenged quantitative geniuses from elite Ivy League academic institutions who found their way to Wall Street hedge funds and other money management organizations and had the audacity to think they could create complex strategies to control the ever growing risk of massively leveraged financial instruments that served no purpose other than to enrich themselves. And don't forget the patrician, useless, rubber stamping Boards of Directors at financial institutions whose members get paid large sums of money to attend their all expense paid quarterly circle jerks to party and ignore their duties of representing shareholders interests and providing management oversight.
But the whole disaster would never have gotten this out of control without the aid, support and encouragement of our honorable public servants in Congress and those throughout the federal bureaucracies charged with oversight, regulation and control of the financial system. Certainly George Bush bears responsibility in that it happened on his watch. He is responsible in the sense that the Republican Congress in the first six years of his presidency spent money like drunken sailors, or in other words, just like Democrats always have - and George let them do it. He is responsible in that he trusted the competence and abilities of his economic advisers as all presidents do - and that was a mistake. And he is responsible because he expected the financial system regulators at the SEC and FDIC to do their jobs - but they didn't.
Consequently, economic activity around the world has come to an abrupt halt. Global stock markets plunged more than 50% in less than a year and a half. The meltdown of over-leveraged financial institutions started in the good old USA, but the damage has spread like an out of control forest fire. Naturally, Barney Frank and his esteemed Democratic colleagues in Congress are doing their utmost best to convince the public that it is all George Bush's fault.
It has become standard operating procedure for politicians to claim false credit for actions that have a positive outcome, if there ever are any, and deny any responsibility what-so-ever for anything that turns out bad. But in this case they go too far. Barney and his buddies were at the epicenter of forcing lenders to make sub-prime loans to borrowers who had very little prospect of ever paying the money back. Now they want to revise the facts and put George W. Bush in the public's crosshairs rather than take any responsibility for their destructive legislative activities.
But it wasn't George Bush who produced or signed the Community Re-investment Act of 1977 that ordered lenders to ease their lending requirements to make high risk loans to borrowers who normally would not qualify. That was the Democratic Party dominated Congress and President Jimmy Carter. And it wasn't George Bush who relaxed the rules even further in 1995 that led to the creative no-down payment, low initial adjustable rate, balloon, interest only, no income no asset mortgages and liar loans that were at the heart of the meltdown. That would be Bill Clinton.
It wasn't George Bush who was responsible for the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, which repealed part of the Glass-Steagall Act of 1933 and allowed commercial banks, investment banks, brokerage firms, insurance companies and investment advisory firms to combine and create financial institutions that were judged to be "too big to fail." That was Senator Phil Gramm, Representative Jim Leach and Representative Thomas Bliley, all three Republicans, and President Bill Clinton who signed it.
It wasn't George Bush who responded to legislative actions calling for regulatory reforms (Federal Housing Enterprise Regulatory Act of 2005) introduced by Republican members of Congress to recognize and address the high risk nature of the portfolios of Fannie Mae and Freddie Mac by denying these quasi-government institutions were in any kind of trouble right up to the day of implosion, and joining their Democratic colleagues in killing the bill. No, that was Barney Frank and Christopher Dodd, now the Democratic Chairmen of the financial industry oversight committees of the House and Senate, respectively, and each recipients of substantial campaign contributions from the two federal quasi-agencies.
It wasn't George Bush who kept interest rates too low too long and encouraged the credit markets to expand exponentially, creating the superfluous speculative credit based derivative securities that generated home price inflation and caused leverage throughout the financial system to rise to levels that guaranteed disaster at the first sight of economic slowdown. That would be Alan Greenspan, who served over 18 years as Chairman of the Federal Reserve Board, and his successor Ben Bernanke. The Federal Reserve is the central bank of the United States and is subject to oversight by and reports to Congress.
Of course the Democrats are also blaming George Bush for the continuing collapse of the stock market and deteriorating economic conditions that have accompanied the first months of the Obama regime. What they don't want Americans to know is that at first the prospect and then the reality of a government totally under the control of Democrats caused a moderate recession and a serious but containable bear market to turn into an unprecedented disintegration of asset values.
Through September of 2008 the Dow Jones Industrial Average was down 25% from its peak in October, 2007, a typical cyclical drop in a bear market. In late September it became apparent Barack Obama was going to be the next president, and Democrats would be in total control of Congress. From that time on the market plunged another 40%, with the bulk of that drop coming after Obama made it known his redistribution and anti-capitalist policies would be even worse than imagined. But of course the Democrats and their die-hard supporters still want to blame all of this on George Bush.
But it isn't George Bush who keeps throwing even more bail-out money at failing financial institutions and constantly changing the rules so no potential investors can make prudent decisions. That would be the financial stewards appointed by Barack Obama, who in many cases are the friends, former colleagues and lobbying targets of those being bailed out.
It isn't George Bush who announced more government intervention in the financial markets by giving more powers to the Treasury, Fed and FDIC to unilaterally use taxpayer dollars to provide bail-out funding to businesses that should be allowed to reorganize or go out of business under the Chapter 11 and Chapter 7 bankruptcy laws that have been in place for decades, which would let capitalism function as intended without politics, government and taxpayer money being involved. That would be Tim Geithner with the approval of Barack Obama.
It isn't George Bush who plans massive new spending for partisan Democratic Party favorite programs that will drive federal spending to over 28% of GDP (up from the traditional level of around 20%) and quadruple the budget deficit this year, with no end to the rapid expansion in sight. That is Barack Obama.
It wasn't George Bush who directed the Fed to print money by having them buy billions of dollars of Treasury bills, thereby providing the fuel for inflation, killing the dollar and causing major foreign holders of U.S. government debt to question the need for an alternative reserve currency. That was Barack Obama.
It wasn't George Bush who made approval of the ironically "newspeak' named Employee Free Choice Act his top priority, thus denying workers the right to secret ballots in labor union organizing campaigns. This payoff to the Democratic Party's most corrupt supporters is a huge job killer because it restrains companies from hiring new workers, leads to higher costs for maintaining existing ones, produces increased operating inefficiencies and results in a lack of competitiveness for U. S. companies in world markets, encouraging many companies to move manufacturing plants overseas. No, that would be Barack Obama.
It isn't George Bush who plans to raise capital gains taxes on the people who have the money to invest in American industry, taking away incentives to invest and thereby denying productive businesses the capital they need to get the country moving again to restore and maintain our prosperity. That, again, is Barack Obama.
It wasn't George Bush who said he was going to veto every earmark and then ignore a record number of new ones in the first spending bill sent him by Congress. That was Barack Obama.
It isn't George Bush who publicly proclaims the intent to redistribute income by raising taxes on the productive members of our society to give to the unproductive, signalling a move away from the historically successful economic principles of capitalism, private enterprise and free markets to the failed underachieving philosophy of state controlled socialism. Sorry, it is Barack Obama.
It wasn't George Bush who signalled our vulnerable allies in Eastern Europe we are untrustworthy partners in global security pacts by declaring our intention to renege on missile defense systems designed to provide security to these fledgling democracies, allowing the reemerging predator of Russia to reassert its influence and potential domination. That was Barack Obama.
It wasn't George Bush who threatens the security of the more restrained states of the Middle East by proposing to re-engage diplomacy with Iran, providing that feared country and its psychotic ayatollah's the opportunity to gain more power and influence at the expense of the friendlier Sunni dominated moderates.
It isn't George Bush who has signalled an intent to abrogate trade agreements and introduce new restraints against trading partners, raising the spectre of reciprocal actions and protectionist policies that could lead to a devastating contraction in world trade. Again, that is Barack Obama.
No wonder the financial markets and ordinary Americans are scared shitless. This new government is rejecting and completely dismantling an economic and social system that has been successful for over 230 years. The folks now in charge can blame anyone they want for America's current predicament. But they need to look in the mirror to see the real perps.
By the way, does it ever occur to anyone what type of people president's have to deal with when they are trying to get government bureaucracies to function. Generally, conservatives and moderates don't work for government. They believe in free markets and are engaged in productive private enterprise. It is typically the folks who believe government is the answer rather than the problem who comprise the bureaucracy. They are the beneficiaries of government spending, not the providers of the funding. They are political activists rather than producers of goods and services. They are obstacles to the progress that free and open markets generate. It is difficult for capitalism to function effectively when the infrastructure of government is populated by socialists.
