Planting Seeds of Disaster

Interesting article. A bit long, but worth it!

Planting Seeds of Disaster
ACORN, Barack Obama, and the Democratic party.

‘You’ve got only a couple thousand bucks in the bank. Your job pays you dog-food wages. Your credit history has been bent, stapled, and mutilated. You declared bankruptcy in 1989. Don’t despair: You can still buy a house.” So began an April 1995 article in the Chicago Sun-Times that went on to direct prospective home-buyers fitting this profile to a group of far-left “community organizers” called ACORN, for assistance. In retrospect, of course, encouraging customers like this to buy homes seems little short of madness.

Militant ACORN
At the time, however, that 1995 Chicago newspaper article represented something of a triumph for Barack Obama. That same year, as a director at Chicago’s Woods Fund, Obama was successfully pushing for a major expansion of assistance to ACORN, and sending still more money ACORN’s way from his post as board chair of the Chicago Annenberg Challenge. Through both funding and personal-leadership training, Obama supported ACORN. And ACORN, far more than we’ve recognized up to now, had a major role in precipitating the subprime crisis.

I’ve already told the story of Obama’s close ties to ACORN leader Madeline Talbott, who personally led Chicago ACORN’s campaign to intimidate banks into making high-risk loans to low-credit customers. Using provisions of a 1977 law called the Community Reinvestment Act (CRA), Chicago ACORN was able to delay and halt the efforts of banks to merge or expand until they had agreed to lower their credit standards — and to fill ACORN’s coffers to finance “counseling” operations like the one touted in that Sun-Times article. This much we’ve known. Yet these local, CRA-based pressure-campaigns fit into a broader, more disturbing, and still under-appreciated national picture. Far more than we’ve recognized, ACORN’s local, CRA-enabled pressure tactics served to entangle the financial system as a whole in the subprime mess. ACORN was no side-show. On the contrary, using CRA and ties to sympathetic congressional Democrats, ACORN succeeded in drawing Fannie Mae and Freddie Mac into the very policies that led to the current disaster.

In one of the first book-length scholarly studies of ACORN, Organizing Urban America, Rutgers University political scientist Heidi Swarts describes this group, so dear to Barack Obama, as “oppositional outlaws.” Swarts, a strong supporter of ACORN, has no qualms about stating that its members think of themselves as “militants unafraid to confront the powers that be.” “This identity as a uniquely militant organization,” says Swarts, “is reinforced by contentious action.” ACORN protesters will break into private offices, show up at a banker’s home to intimidate his family, or pour protesters into bank lobbies to scare away customers, all in an effort to force a lowering of credit standards for poor and minority customers. According to Swarts, long-term ACORN organizers “tend to see the organization as a solitary vanguard of principled leftists...the only truly radical community organization.”

ACORN’s Inside Strategy
Yet ACORN’s entirely deserved reputation for militance is balanced by its less-well-known “inside strategy.” ACORN has long employed Washington-based lobbyists who understand very well how the legislative game is played. ACORN’s national lobbyists may encourage and benefit from the militant tactics of their base, but in the halls of congress they play the game with smooth sophistication. The untold story of ACORN’s central role in the financial meltdown is about the one-two punch to the banking system administered by this outside/inside strategy.

Critics of the notion that CRA had a major impact on the subprime crisis ask how a law passed in 1977 could have caused a crisis in 2008? The answer has a lot to do with ACORN — and the critical years of 1990-1995. While the 1977 Community Reinvestment Act did call on banks to increase lending in poor and minority neighborhoods, its exact requirements were vague, and therefore open to a good deal of regulatory interpretation. Banks merger or expansion plans were rarely held up under CRA until the late 1980s, when ACORN perfected its technique of filing CRA complaints in tandem with the sort of intimidation tactics perfected by that original “community organizer” (and Obama idol), Saul Alinsky.

At first, ACORN’s anti-bank actions were relatively few in number. However, under a provision of the 1989 savings and loan bailout pushed by liberal Democratic legislators, like Massachusetts Congressman Joseph P. Kennedy, lenders were required to compile public records of mortgage applicants by race, gender, and income. Although the statistics produced by these studies were presented in highly misleading ways, groups like ACORN were able to use them to embarrass banks into lowering credit standards. At the same time, a wave of banking mergers in the early 1990's provided an opening for ACORN to use CRA to force lending changes. Any merger could be blocked under CRA, and once ACORN began systematically filing protests over minority lending, a formerly toothless set of regulations began to bite.

ACORN’s efforts to undermine credit standards in the late 1980s taught it a valuable lesson. However much pressure ACORN put on banks to lower credit standards, tough requirements in the “secondary market” run by Fannie Mae and Freddie Mac served as a barrier to change. Fannie Mae and Freddie Mac buy up mortgages en masse, bundle them, and sell them to investors on the world market. Back then, Fannie and Freddie refused to buy loans that failed to meet high credit standards. If, for example, a local bank buckled to ACORN pressure and agreed to offer poor or minority applicants a 5-percent down-payment rate, instead of the normal 10-20 percent, Fannie and Freddie would refuse to buy up those mortgages. That would leave all the risk of these shaky loans with the local bank. So again and again, local banks would tell ACORN that, because of standards imposed by Fannie and Freddie, they could lower their credit standards by only a little.

So the eighties taught ACORN that a high-pressure, Alinskyite outside strategy wouldn’t be enough. Their Washington lobbyists would have to bring inside pressure on the government to undercut credit standards at Fannie Mae and Freddie Mac. Only then would local banks consider making loans available to customers with bad credit histories, low wages, virtually nothing in the bank, and even bankruptcies on record.

Democrats and ACORN
As early as 1987, ACORN began pressuring Fannie and Freddie to review their standards, with modest results. By 1989, ACORN had lured Fannie Mae into the first of many “pilot projects” designed to help local banks lower credit standards. But it was all small potatoes until the serious pressure began in early 1991. At that point, Democratic Senator Allan Dixon convened a Senate subcommittee hearing at which an ACORN representative gave key testimony. It’s probably not a coincidence that Dixon, like Obama, was an Illinois Democrat, since Chicago has long been a stronghold of ACORN influence.

Dixon gave credibility to ACORN’s accusations of loan bias, although these claims of racism were disputed by Missouri Republican, Christopher Bond. ACORN’s spokesman strenuously complained that his organization’s efforts to relax local credit standards were being blocked by requirements set by the secondary market. Dixon responded by pressing Fannie and Freddie to do more to relax those standards — and by promising to introduce legislation that would ensure it. At this early stage, Fannie and Freddie walked a fine line between promising to do more, while protesting any wholesale reduction of credit requirements.

By July of 1991, ACORN’s legislative campaign began to bear fruit. As the Chicago Tribune put it, “Housing activists have been pushing hard to improve housing for the poor by extracting greater financial support from the country’s two highly profitable secondary mortgage-market companies. Thanks to the help of sympathetic lawmakers, it appeared...that they may succeed.” The Tribune went on to explain that House Democrat Henry Gonzales had announced that Fannie and Freddie had agreed to commit $3.5 billion to low-income housing in 1992 and 1993, in addition to a just-announced $10 billion “affordable housing loan program” by Fannie Mae. The article emphasizes ACORN pressure and notes that Fannie and Freddie had been fighting against the plan as recently as a week before agreement was reached. Fannie and Freddie gave in only to stave off even more restrictive legislation floated by congressional Democrats.

A mere month later, ACORN Housing Corporation president, George Butts made news by complaining to a House Banking subcommittee that ACORN’s efforts to pressure banks using CRA were still being hamstrung by Fannie and Freddie. Butts also demanded still more data on the race, gender, and income of loan applicants. Many news reports over the ensuing months point to ACORN as the key source of pressure on congress for a further reduction of credit standards at Fannie Mae and Freddie Mac. As a result of this pressure, ACORN was eventually permitted to redraft many of Fannie Mae and Freddie Mac’s loan guideline.

Clinton and ACORN
ACORN’s progress through 1992 depended on its Democratic allies. Whatever ACORN managed to squeeze out of the George H. W. Bush administration came under congressional pressure. With the advent of the Clinton administration, however, ACORN’s fortunes took a positive turn. Clinton Housing Secretary Henry Cisnersos pledged to meet monthly with ACORN representatives. For ACORN, those meetings bore fruit.

Another factor working in ACORN’s favor was that its increasing success with local banks turned those banks into allies in the battle with Fannie and Freddie. Precisely because ACORN’s local pressure tactics were working, banks themselves now wanted Fannie and Freddie to loosen their standards still further, so as to buy up still more of the high-risk loans they’d made at ACORN’s insistence. So by the 1993, a grand alliance of ACORN, national Democrats, and local bankers looking for someone to lessen the risks imposed on them by CRA and ACORN were uniting to pressure Fannie and Freddie to loosen credit standards still further.

At this point, both ACORN and the Clinton administration were working together to impose large numerical targets or “set asides” (really a sort of poor and minority loan quota system) on Fannie and Freddie. ACORN called for at least half of Fannie and Freddie loans to go to low-income customers. At first the Clinton administration offered a set-aside of 30 percent. But eventually ACORN got what it wanted. In early 1994, the Clinton administration floated plans for committing $1 trillion in loans to low- and moderate-income home-buyers, which would amount to about half of Fannie Mae’s business by the end of the decade. Wall Street Analysts attributed Fannie Mae’s willingness to go along with the change to the need to protect itself against still more severe “congressional attack.” News reports also highlighted praise for the change from ACORN’s head lobbyist, Deepak Bhargava.

This sweeping debasement of credit standards was touted by Fannie Mae’s chairman, chief executive officer, and now prominent Obama adviser James A. Johnson. This is also the period when Fannie Mae ramped up its pilot programs and local partnerships with ACORN, all of which became precedents and models for the pattern of risky subprime mortgages at the root of today’s crisis. During these years, Obama’s Chicago ACORN ally, Madeline Talbott, was at the forefront of participation in those pilot programs, and her activities were consistently supported by Obama through both foundation funding and personal leadership training for her top organizers.

Finally, in June of 1995, President Clinton, Vice President Gore, and Secretary Cisneros announced the administration’s comprehensive new strategy for raising home-ownership in America to an all-time high. Representatives from ACORN were guests of honor at the ceremony. In his remarks, Clinton emphasized that: “Out homeownership strategy will not cost the taxpayers one extra cent. It will not require legislation.” Clinton meant that informal partnerships between Fannie and Freddie and groups like ACORN would make mortgages available to customers “who have historically been excluded from homeownership.”

Disaster
In the end of course, Clinton’s plan cost taxpayers an almost unimaginable amount of money. And it was just around the time of his 1995 announcement that the Chicago papers started encouraging bad-credit customers with “dog-food” wages, little money in the bank, and even histories of bankruptcy to apply for home loans with the help of ACORN. At both the local and national levels, then, ACORN served as the critical catalyst, levering pressure created by the Community Reinvestment Act and pull with Democratic politicians to force Fannie Mae and Freddie Mac into a pattern of high-risk loans.

Up to now, conventional wisdom on the financial meltdown has relegated ACORN and the CRA to bit parts. The real problem, we’ve been told, lay with Fannie Mae and Freddie Mac. In fact, however, ACORN is at the base of the whole mess. ACORN used CRA and Democratic sympathizers to entangle Fannie and Freddie and the entire financial system in a disastrous disregard of the most basic financial standards. And Barack Obama cut his teeth as an organizer and politician backing up ACORN’s economic madness every step of the way.

October 7, 2008 7:00 AM

Planting Seeds of Disaster
ACORN, Barack Obama, and the Democratic party.

By Stanley Kurtz

Do Statistics make a Connection?

Body count. In the last six months 292 killed (murdered) in Chicago, one of the highest crime rates in the country and might be higher than today's Baghdad. Sens. Barack Obama & Dick Durbin, Rep. Jesse Jackson Jr., Gov. Rod Blogojevich, House leader Mike Madigan, Atty. Gen. Lisa Madigan (daughter of Mike), Mayor Richard M. Daley (son of Mayor Richard J. Daley).....our leadership in Illinois.....all Democrats. Thank you for the combat zone in Chicago. Of course they're all blaming each other. Can't blame Republicans, there aren't any! State pension fund $44 Billion in debt, worst in country. Cook County (Chicago) sales tax 10.25% highest in country. Chicago school system one of the worst in country. This is the political culture that Obama comes from in Illinois. He's gonna 'fix' Washington politics?

What do the top ten cities with the highest poverty rates all have in common? A shortage of Republican leaders:

1.Detroit, MI (1st on the poverty rate list) hasn't elected a Republican mayor since 1961.
2.Buffalo, NY (2nd) hasn't elected one since 1954.
3.Cincinnati, OH (3rd)...since 1984.
4.Cleveland, OH (4th)...since 1989.
5.Miami, FL (5th) has never had a Republican mayor.
6.St. Louis, MO (6th)....since 1949.
7.El Paso, TX (7th) has never had a Republican mayor.
8.Milwaukee, WI (8th)...since 1908.
9.Philadelphia, PA (9th)...since 1952.
10.Newark, NJ(10th)...since 1907.


Einstein once said, 'The definition of insanity is doing the same thing over and over again and expecting different results.'

It is the disadvantaged who habitually electing elitist Democrats --- yet they remain disadvantaged.

"Poor People have been voting for Democrats for the last 50 years, .............and they are still poor." Charles Barkley --

EDUCATING THE IDIOTS

So, a leaked memo written for the liberal power-players within the state of Colorado by the nation-wide leftist organization called the “Democracy Alliance” has hit the newswires and in it, the strategy of a campaign to “Educate the Idiots" where they are to target "minorities, GED’s, drop-outs” has been revealed.

http://facethestate.com/downloads/coda-web/strategygroup.pdf

But really, is this anything new?

Isn’t the entire socialist mantra of the left a call out to the minorities, GEDs and drop-outs of our nation? The whole of the Obama platform is exactly that: “Don’t worry idiots, we’ll pay for you, support your kids, pay for your healthcare, increase your minimum wages, and if you fuck all that up, we’ll protect you from evil legislation like 3 Strikes if you go out and start committing crime!”

The uneducated masses have always been the central voting block of the left, mainly due to the knee-jerk response to leftist propaganda. When people are constantly telling you that if you vote for them, you’ll be taken care of and if you don’t, some rich white guy is going to put you on the street, you listen. And when you’re an idiot, you hear these messages over and over again both in the news and in pop-culture (music, tv and movies consistently tell you that there’s nothing more evil in the world than an old white man in a suit), you have no ability to think otherwise. For a moment, erase the majority of the common-sense you were so thankfully given and pretend you too are an idiot. Now, the left tells you this:

“Conservatives want to cut taxes for rich people and take away government programs that you rely on!”

And the Right tells you this:

“Conservatives want to cut all taxes, for the rich included because then more money is invested in business and our economy, increasing jobs, stimulating growth and innovation and improving our nation as a whole.”

Now, as an idiot, who are you more likely to vote for? The kneejerk reaction is to be wary of the conservative and to ignore their point because it requires foresight and is less immediately tangible.

The fact is, the liberal belief system is made up of a false standard of “fairness.” Ask any rich liberal about fairness and he’ll cry to you about the poor but then look at his tax returns and you’ll notice that the bullshitter gives less to charity than any of his conservative counterparts. He’ll cry to you about the inequities of the legal system and how minorities are unfairly profiled, but the bullshitter has never been in a bad neighborhood in his life where he didn’t lock the doors of his Volvo (if he’s ever been at all). The concept of the limousine liberal, crying for the masses from his penthouse condo is nothing new, of course, and this revelation that rich liberals have outright disdain for minorities, the poor and the uneducated shouldn’t be either. Their very policies are the way they are to keep the status quo in tact. Let’s be honest here, why is a liberal so against school choice? First, of course, there’s the fear of the minorities coming in to their kids’ schools and the horrors that would bring, but more importantly they are concerned with keeping the poor in failing public schools so they can keep “them” separate. Remember, it’s not about actually giving a hand up, it’s about giving a hand out. Who cares about teaching a man to fish, the man is poor and smells bad, just give him a fish and tell him to go away while feeling good about yourself for helping.

In a world where the soundbite is more important than the speech, the liberal ideology will always ring more true in the heart of the idiot. “You need a union so you can get paid more,” is much easier to understand than “If the union forces the company to pay you more, the company’s profit margin shrinks, less money is pumped in to the community in which you live, and the company can afford to hire less of your peers and you’re more likely to lose your job in any type of crisis.” Liberal stump speeches about “Free Healthcare!” are much more exciting than conservatives trying to explain why government-controlled healthcare will provide you with considerably less health and shockingly less care. When liberal politics are injected in to the mass media in the form of entertainment, who do you think that is reaching out to? Do you believe that more smart people or more idiots are watching Saturday Night Live? What concept do you think is more easily digested to an idiot: “War is not the answer” or “Peace through strength”? When Barack starts hollering about ending the war, the idiot instantly thinks “Oh, no war would be great!” They can’t really figure out how military action abroad keeps us safer at home. Why? Because they’re idiots, remember?

Conservatism is not knee jerk. It actually takes a bit of thought. It takes a bit of foresight. Most importantly, it takes a lot of faith in a person to be better. Liberalism is emotional. Liberalism is about what’s best for me right now. It’s about trying to solve a problem by throwing money at it as opposed to getting your hands dirty. Most importantly, liberalism believes in government more than people. It believes that people, especially the idiots, can’t possibly get along without the government’s help.

So I’m sure that this memo will get some newsplay on Drudge or talk radio for a day or so, but the MSM will never pick it up and it’ll just disappear. But does it really matter anyway? If it did get out there, liberals will just tell the idiots that the rich white man did it.