Predatory Politicians, Destructive Leftwing Policies and the Roots of the Housing Crisis

By Newt Gingrich

In the midst of the economic crisis and the wake of the Paulson bailout, the mainstream media have begun publishing obituaries for the free market.   The elite press has begun to trumpet “the end of American-style capitalism” and “the bankrupt dogma of Reagan-Thatcherism.”

But are free markets at the root of the current economic crisis, or meddling politicians?

In short: Is our problem predatory lenders, or predatory politicians?

Predatory Politicians Use Government to Get What They Want

Predatory politicians are vastly more dangerous then predatory lenders because they bring the full authority and vast resources of the federal government to their attempts to coerce and control the American people.

If predatory lenders seek to take advantage of peoples’ desperation and ignorance to make bad loans, predatory politician take advantage of taxpayers money and the power of the government to advance their leftwing agenda. And as we will see, predatory politicians made the work of predatory lenders much easier by putting the U.S. taxpayers in the role of guaranteeing all the bad paper predatory lenders could produce.

·   Predatory bankers (and there were plenty) exploited a booming housing market to give loans to people who never should have received them. But predatory politicians forced banks to make bad loans.

·   Predatory politicians (and the pursuit of profits) pushed Fannie Mae and Freddie Mac into buying up more and more risky, subprime loans, creating incentives for mortgage providers to issue even more bad loans.

·    “Predatory politicians resisted attempts to reign in Fannie Mae and Freddie Mac as the lenders put the taxpayers on the line for trillions of dollars in bad loans – all while Fannie and Freddie cooked their books to boost their executives’ multi-million dollar compensation packages.

·   Predatory politicians took millions in campaign funds from Fannie Mae and Freddie Mac in exchange for political protection against attempts at reform.

·   Predatory politicians funded radical groups like ACORN which receive millions in taxpayers dollars to extort banks into making risky loans, all the while they work to get out the vote for the liberal politicians that are their benefactors.

Predatory politicians forced banks to make bad loans.

During the Carter Administration Congress passed the Community Reinvestment Act (CRA) with the laudable goal of helping the poor afford homes. It forced banks to prove they weren’t “redlining” inner city neighborhoods by refusing to lend to urban residents while using their deposits to lend to suburban homeowners with better credit.

The CRA, as strengthened under the Clinton Administration, gave leftwing, anti-free market groups (more about them below) veto power over bank mergers unless banks could prove they were making loans to credit risks. Wielding this power, these leftwing so-called “community groups” have extorted hundreds of millions from banks. These community groups, in turn, finance both lending to low income mortgage seekers and get-out-the-vote activity for liberal politicians. As the City Journal reported in 2000, using the power to extort granted in the CRA, the radical, anti-free market group ACORN received $760 million from the Bank of New York, the Boston-based Neighborhood Assistance Corporation of America dragged $3 billion out of the Bank of America and a coalition of “community groups” in New Jersey got an astounding five-year, $13 billion agreement with First Union Bank.

Predatory politicians (and the pursuit of profits) pushed Fannie Mae and Freddie Mac into buying up more and more risky, subprime loans, creating incentives for mortgage providers to issue even more bad loans.

To understand the central role that Fannie Mae and Freddie Mac played in the making of the economic crisis – at the behest of predatory politicians – it is important to first understand what these two government-sponsored enterprises do.

Fannie and Freddie don’t make mortgages to individual home owners. Instead, they purchase mortgages from banks and other mortgage providers. The theory is that, by taking these mortgage obligations off the books of private bankers, Fannie and Freddie would free up capital for these banks to make more loans to other home buyers.

Fannie and Freddie would then take these mortgages and “securitize” them by bundling them together and selling them to investors such as investment banks and pension funds. Investors received returns on their investments as long as home values continued to climb and the underlying mortgages were paid. The risk for the investor, then, is in the quality of the underlying mortgages. And under pressure from predatory politicians and in pursuit of profits, Fannie and Freddie became increasingly involved in risky subprime mortgages in the 1990s. But because Freddie and Fannie are backed by the federal government, investors continued to buy their securities, safe in the knowledge that if there was a problem, the government would bail them out.

In 1999, under pressure from the Clinton Administration to increase home ownership rates among low income borrowers, Fannie Mae CEO Franklin Raines lowered his company’s lending standards to include, “individuals whose credit is generally not good enough to qualify for conventional loans.”
The result, government regulators testified last month, was that by 2008 about 33 percent of Fannie and Freddie’s business involved risky loans. And as of May 2008, Freddie and Fannie had guaranteed $2.2 trillion in mortgages, about 75% of all mortgages in the U.S., and owned a quarter of the all the mortgage back securities issued on the market.

Here’s how a new report from the minority staff of the House Oversight and Government Reform Committee captures Freddie and Fannie’s role in the current crisis:

“As the largest purchasers and securitizers of mortgages and [mortgage-backed securities] in the world, Fannie Mae and Freddie Mac exert a powerful influence on the rest of the mortgage lending market. By signaling their willingness to dip ever deeper into the pool of risky subprime and Alt-A mortgages, they created powerful incentives for non-bank lenders like Countrywide Financial and Lehman Brothers to continue scraping the bottom of the mortgage barrel. This fueled the disastrous housing bubble that collapsed with such dire consequences for the U.S. and global financial system.

Predatory politicians resisted calls to reign-in Fannie Mae and Freddie Mac as they put the taxpayers on the line for trillions of dollars bad loans …

Much of the current crisis could have been prevent if Congressman Barney Frank would have encouraged reform instead of prevented it. As the chairman of the House Financial Services Committee, Barney Frank resisted any regulation of Freddie and Fannie's investment strategies and even sought to increase their portfolios. The mission of Freddie and Fannie - to provide low income housing - became a smoke shield for Frank to reward his buddies from Freddie and Fannie.
Frank had a habit of making public excuses for Freddie and Fannie. In 2000, Franks said that he said concerns about Fannie and Freddie were "overblown." In 2002, Franks categorized them as "great assets." In 2003, he said that the American people did "not face any crisis" with containing the risk in Freddie's and Fannie's portfolios. Frank clearly ignored the obviously unsound investment practices of Freddie, so that he could continue to pass on rewards to industry insiders.

In 2005, Federal Reserve Chairman Alan Greenspan sounded the alarm to the House Financial Service Committee, for the second time in two years, about the undercapitalization of Freddie and Fannie's portfolios. He warned that by "[e]nabling these institutions to increase in size […] we are placing the total financial system of the future at a substantial risk."

Also in 2005, Republican Senators included John McCain, introduced legislation to tighten up regulation of Freddie and Fannie. Senator Chuck Schumer and Senator Chris Dodd and other Democrats resisted, and the legislation lacked the support to get any traction. After the Democrats took over Congress in 2006, all chances of reform were lost.

Senator John McCain has continued to push for reform. He has argued that Freddie and Fannie should be dissolved, and that new regulations should be pass that "limits their ability to borrow, shrinks their size until they are no longer a threat to our economy and privatizes and eliminates their links to the government."

… while Fannie and Freddie cooked their books to boost their executives’ multi-million dollar compensation packages.

In addition to the willful ignorance displayed by the Chairman of the House Financial Services Committee, the executives of Freddie and Fannie were busy gambling away tax payer money on dicey investment products.

Chief Executive of Freddie Mac, Richard F. Syron ignored the warnings from regulators that Freddie Mac's portfolio was built on shaky, financial grounds. According to the New York Times, Syron was warned in 2004 that Freddie Mac needed to cut back on investments in risky loans. New York Times reports that Syron received a memo from the chief risk officer, David A. Andrukonis, raising alarm about questionable loans.

Mr. Andrukonis warned Syron that the company's investment strategies were "an enormous financial and reputational risk to the company and the country." According to Andrukonis, Syron said that government regulators had no right to dictate their investment strategies. Mr. Syron reportedly said in a private meeting with investors that: "This company will bow to no one."

In apparent frustration, Andrukonis eventually left Freddie Mac to take a teaching position in 2005. Over the next three years, Freddie Mac continued buying riskier loans. And last month, in the midst of the crumbling share values, the government took the drastic step to bailout Freddie Mac and Fannie Mae. As taxpayers footed the bill, Syron brought home a reward for his ineptitude. From 2003 to Aug 2008, Syron has collected $38 million in compensation.

Like Syron, the chairs of Fannie Mae have also reaped a profit from the mismanaged endeavors. Amid an Enron-like accounting scandal in 2004, former head of Fannie Mae, Franklin Raines, was forced to resign. Raines still managed to walk out of the door with at least $20 million in compensation. Raines is now a consultant with none other than the Obama campaign.

Replacing Mr. Raines, Daniel H. Mudd became chief executive in 2004. Under his leadership, shareholders of Fannie Mae lost millions of dollars. Nevertheless, he managed to earn at least $42 million in compensation.

Predatory politicians took millions in campaign funds from Fannie Mae and Freddie Mac in exchange for political protection against attempts at reform.
Fannie and Freddie worked hard – and paid millions – to protect themselves from reform efforts in Congress. Between 2000 and 2008, Fannie and Freddie employees contributed nearly $15 million to the campaigns of Members of Congress on key committees responsible for their oversight.

Topping the list in the Senate was Senate Banking Committee Chairman Chris Dodd at $165,400 in contributions. But coming a close second is Barack Obama, despite having been in the Senate only since 2004.

OpenSecrets reports that in just four years in office, Senator Obama has received $126,349 in political donations, whereas Senator McCain, first elected in 1986, has only received $21,550.

Predatory politicians funded radical groups like ACORN which receive millions in taxpayers dollars to extort banks into making risky loans, all the while they work to get out the vote for the liberal politicians that are their benefactors.

As we’ve seen, the radical, anti-free market group ACORN has been one of the most successful of the leftwing “community” groups at working hand-in-glove with predatory politicians to fuel the economic crisis.

Perhaps that’s why last summer’s housing bailout bill, and the Paulson bailout bill after congressional Democrats got done with, contained hundreds of millions in new funds to groups like ACORN.

Whether they’re receiving funds from banks via the Community Reinvestment Act, through contributions from Fannie Mae and Freddie Mac, or direct payments from the taxpayer via Congress, these radical groups have been the shock troops of predatory politicians seeking to advance their leftwing agenda. They disrupt meetings, harass public officials and use other “in your face” tactics to justify their funding. And in return, they work to get out the vote for the liberal politicians who support them.

More than any other single factor, predatory politicians used the weight and power of the federal government to create the market for the subprime loans that are at the heart of our financial melt-down.

And now these same predatory politicians are looking into the cameras and saying:

“The private sector got us into this mess. The government has to get us out of it.”

The truth is, predatory politicians got us into this mess. Now the taxpayers are footing the bill to get us out of it.

It’s not the free market that’s sick, it’s government that’s sick. As P.J. O'Rourke once wrote, "Giving money and power to government is like giving whiskey and car keys to teenage boys."   It’s time to take away the whiskey and the car keys from the predatory politicians.

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Comments

By Dumbhillbilly @ Tuesday, December 30, 2008 11:49 AM

Don't just blame some of our politicans tho. Some were pushing for the easy loans that shouldn't have been made but all of them sat on their donkeyies for years now and done nothing about our energy policy. Go back and look at the increase in cost of living (actual) for the average income family.

By Dumbhillbilly @ Tuesday, December 30, 2008 11:43 AM

Newt, I'm surprised that there isn't more post on this. This is right on. the sub-prime lending and the hit from high energy done all of the sub-prime borrows in along with most everyone who have loss of income. The main reason was to kill any chances for republicans to win.

By Sisko9 @ Monday, October 27, 2008 12:15 AM

WHITE PICKET FENCES: It’s noted that Sen. Obama plans to utilize the 700 billion dollar bailout to convert suburban homes recently acquired by the government (due to failed mortgages) to Section 8 low-income houses for inner-city families. Despite stereotypical fears of crime, school deterioration, and plummeting property values, a low-income relocation program to suburbia enhances social equity for poor inner-city families, integrates the suburbs, and indeed helps spread the wealth.

By zzz_Derek_zzz @ Sunday, October 26, 2008 11:08 AM

Newt Please help!

Someone call Newt and let him read this. Please!.. it's not too late.
Spread this Joke. It's time for the Republican's, Independents & Moderates to have a good laugh, and get some more votes too.

** Drop the Sara Palin Bomb. This joke will knock them dead!

* Please help The Lollipop Guild Elect Sara Palin & John McCain

***********************************************************************

'Now Playing: “That” Wizard of Ours, Staring Senator Barack Obama.

‘That” Wizard of Ours, Staring Senator Barack Obama as: Who's that Man behind the curtain?

“That” Wizard of Ours also Staring John the Real Deal McCain as our Tin Man, Scarecrow, and Lion, all in one. The beautiful, sweet Sara Palin as our beloved Dorothy.

She's one tough act to follow for sure.

Cast:
The 'Wicked Witch of the West' played by Nancy Palosie, and her Evil Flying Monkeys for a special one time appearance the “Democratically controlled House and Senate. “ Boooooooooooooooooooooooooo Booooooo

Also Staring the team at CNN playing the Wicked Witch’s Castle Guard Goons.
OEO OeeeeeeO OeO OeeeeeeeeeeeeO OeO No-HilorEEEEEEEEEEEO OeO
No-HilorEEEEEEEEEEEO OeO vote Obaaaaamo OeO No-HilorEEEEEEEEEEEO Oeeeeeeeeeeeeeeeeeeee O vote Obaaaaaaamo OeO vote Obaaaaaaamo....

Special Appearance by Sean Hannaty, as Toto

Tune into FOX Sunday Night, to see Toto pull back the curtain.

Senator Barack Obama's pitch is the best we've ever seen. He's got more style, and flair to his delivery, than all the other far left liberals we've seen in the past. I give him AAA+ for his delivery. We all do want a better life for ourselves, and our children. It's easy to be attracted to the man Barack Obama His is ability to paint a beautiful picture of OZ in our minds, It is a very special gift of his. But where is the substance to what he's saying? As you know, in the story of the ”Wizard of OZ” if it were not for Toto, even Dorothy would have been fluffed by the Wizard.

The 'Wizard of OZ was a Fluff job too.

Moderates, and Independents are getting Fluffed.

------------- Obama, and CNN 'Have been fluffing us from the far left. --------------------

Fluff back! Vote for John McCain

It’s time to drop the news to America, and the start blowing the Fluff out of Politics.

****************************************************************

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*********** FLASH *********

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********* Barack Obama's been fluffing! *********

******** American people beginning to see its all been Fluff **********

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********** Land slide Victory predicted for McCain **************

*********** American people beginning to see *****************

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************** Land slide Victory predicted for McCain ****************

************* Land slide Victory predicted for McCain *****************

************** Land slide Victory predicted for McCain *****************

****************** From Middle America to CNN *******************

****************** ** Fluff you ***************************

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********************************************************************

This is for all you Hilary voters too, She will get a fair shot in 2012 Don’t
let them Fluff you too. Bi-Polar Politics, Far Right, to Far left is not the
Answer for our economy, and Security. We can’t let Nancy, and the
“Democratically controlled House and Senate” Far left Liberal “Tax &
Spend” will Kill, our Business’s, jobs, and future. John McCain is the only
stop loss we will have in Washington. We need John McCain, now more
than ever.

Stop CNN and, Obama from Fluffing us

Please forward this to all your friends ASAP

http://www.youtube.com/watch?v=YWyCCJ6B2WE

Please Help, I’m fighting for my 6 kids future, as hard as I can. Please help spread the word. We will win; Have faith, we’ve got the right people for the job on our team. Just going to take a little more work. All of America will win With John & Sara.
American can not afford Spread the Wealth. We will all lose

Please help spread the word

By Sisko9 @ Saturday, October 25, 2008 4:51 PM

INNER-CITY RELOCATION: It’s noted that Sen. Obama plans to utilize the 700 billion dollar bailout to convert suburban homes recently acquired by the government (due to failed mortgages) to Section 8 low-income houses for inner-city families. Despite stereotypical fears of crime, school deterioration, and plummeting property values, a suburban relocation program enhances social equity for poor inner-city families and indeed helps spread the wealth.

By Sisko9 @ Thursday, October 23, 2008 1:21 AM

“HOME INVASION?” It’s been discussed that Sen. Obama plans to use part of the 700 billion dollar bailout to convert suburban homes recently acquired by the government (due to failed mortgages) to Section 8 low-income houses for inner-city families. Despite stereotypical fears of crime, school deterioration, and plummeting property values, such a relocation program provides greater social equity for poor inner-city families.

By mmagman @ Monday, October 13, 2008 8:44 AM

EVERYBODY VOTE O'BAMA.

That's the best thing that could happen for the country
Let me Explain,
for years the socialist (forget Liberal, let's call them what they really are) have been cramming their garbage down the throats of the American People. Listen to anything long enough and you start to believe it.

I figure the best way to deal with the situation is to let the Socialist, O'bama, get elected and then coupled with the current congress they will either screw things up real bad or more likely, do what they have been known to do for the last 2 years. Rename Libraries and take vacations.

We can start getting the country back to normal in 2012,
Newt, Please be there when we need you in 2012 !

By PJS @ Sunday, October 12, 2008 6:38 PM

As a former teacher, now living in Costa Rica I want you to know Newt that I am most appreciative of you sharing your insider/researched knowledge with those of us interested in knowing the truth. I love America with all my heart, but could see this crisis coming from a long way off. My son and his family are here with me now, but not until after he lost two homes in this mortgage mess, his entire life savings in various types of accounts and going into debt for thousands more just trying to keep two houses that went up and up in value and then crashed leaving him unable to refinance them. He had to walk away, there simply wasn´t another dime left to him to try and keep them. Countrywide refused to answer any of his phone calls, so they were no help in solving his dilemna. Now, the two houses are up for auction at less than half of what his mortgages were for, yet if Countrywide had simply reduced their price by $100,000 and given him a fixed low 30 year rate, he could have kept them both. And they would come out better than they will now, but then that´s your point; no one really cared what this was doing to the Americans it affected, they were in it just for the billions. No one was interested in a real fix that helped real Americans. Every day working Americans know they´ve been shafted, it´s just a shame that most of them don´t know by whom, but mainly because of my next point. It has bothered me for years how the Republican party is always so reluctant to teach and inform the public about the real causes and stimuli to our situations, whatever they may be. I don´t know if they think they´re taking the high moral road of not ïnforming¨ on someone else, or if they are just elitist and think everyone is too ignorant to want or care to be informed. I am saddened to say that I think it´s the last ascertion. If we lose this election than it´s our own Republican fault. I really believe that the only thing that is going to save it now is for millions of Americans to pray for God´s will to be done in this election and that He mightily move on the hearts and minds of born again Christians in America to get off their lazy, ¨too holy to be involved in politics¨ derriers, register and vote. There´d be no contest if they did. Third point, I´m an old radical from the 60´s so take this into account, but I´ve been asking all my friends for many months what they think about the Dems falling for an Islamic backed Manchurian candidate. And now as more and more people research Obama´s past, affiliations, lack of overt money sources for all his expensive schooling, etc., it´s becoming apparent to not just a few people that this election is for the very heart and life of our freedom and the United States as we know her. Keep up the good work Newt. I´m far in the jungle, living off the land, doing what I can to keep my family alive and healthy in the days and years to come. You´re website is one of the only sources I have to keep up with what´s happening. Thank you. By the way, I´m a missionary here, so if anyone is thinking too harshly of me for living out of country, give it a rest.

By tnaoneil @ Saturday, October 11, 2008 8:57 AM

Of course this crises will require a bipartisan congressional "investigation" lead by an objective liberal democrat.
If McCain wins, this means we have to wait eight years to see a Palin/Gingrich ticket, but if Obama wins, we can see a Gingrich/Palin ticket in only four.

By Gatorwest @ Friday, October 10, 2008 5:56 PM

Let's Convert Calamity to Opportunity

The solution to the housing market requires that we put the buyers back!

Loaning 100-120% of a house value to those who just refinance every two years, pay off the credit cards and re-do it all over again, created false buyers who would buy at any price driving up housing markets. The solution to the mortgage industry requires that we put the buyers back.

If the 700 billion is used primarily to bail out the lenders then the financial markets are able to lend again but the housing market remains a long term problem with a big administrative nightmare for the Feds.

The real reason many who were gaming the system walked from their mortgages is that they had no money down and the markets fell. If the markets were going up then you would have seen much less of an exit.

So here is the solution: STARTING RIGHT NOW TOMORROW, let anyone who wants to buy a house to live in the opportunity to buy with NO MONEY DOWN. At current prices people will be all over these house. Then use the Fed's to facilite this process. So what if some default, we are no worse off than we are now. And if prices rebound you won't see wholesale defaults.

The market starts coming back right away giving us time to develop a long term strategy and policy. It cost much less to do, and stimulates the markets from the right source. THERE ARE GREAT VALUES OUT THERE! Let's find the right buyers for them!

By Kreag @ Thursday, October 09, 2008 8:01 PM

Being a Mortgage Professional for the past twelve years I've seen it all from the infamous 125% to the tremendous Community Programs of Fannie/Freddie.
Few examples..
Subprime:Back end ratios of 50-55%-of gross income...

2-4 Family Investor Homes 100% Financing

Cofi/Cosi family of loans, 2.8% start rates when actual rates are 7.5-9%...causing deferred interest

2/28, 3/27, 15/30 Balloon

NO Documentation Loans

Conf.-Fannie/Freddie
FHA would do is some cases 60% backend ratio..on gross income
Community Access-Based on zip codes and medium income (COULDN'T make over a certain amount for area or were denied)*asking for trouble*

100% owner occ with seller paid closing, many 1st pmt foreclosures

100% investor, more 1st pmt foreclosures

The above are just a small sample of the garbage thats been forced down our throats. I lost millions of dollars over the years because I didn't want blood on my hands. The Libs knew about the adjustables coming due this year, they knew in the election year the foreclosures would kill the Republican nominee and destroy the secondary market. Somebody needs to pound this soon into people's heads!!!

By Voltart @ Thursday, October 09, 2008 4:37 PM

How about McCain calling a press conference to explain to the American people the roots of the current crisis? If he doesn't have the knowledge, the ability or the willingness to do it, he can hire Newt Gingrich.

By AUTigress @ Wednesday, October 08, 2008 12:35 PM

I wish I had confidence that we would be hearing more about ACORN in the coming days. However, those of us enlightened enough to read articles by conservatives or to watch FoxNews are already conservatives and already voting for McCain/Palin. WE HAVE GOT TO GET THIS INFORMATION OUT TO AS MANY PEOPLE AS WE CAN. I am emailing this to everyone in my address book who isn't totally in the tank for Obama (and wouldn't change for ANY reason) and asking them to do the same. I ENCOURAGE ALL OF YOU TO DO THE SAME AND TO DO IT NOW. In the weeks we have left before the election, we can reach millions of people with this information. Some will fall on deaf ears. Others, who already plan to vote McCain/Palin, will send it on. PLEASE DO IT NOW. LETS TRY TO HELP SAVE THIS THING.

By ericjfrench @ Wednesday, October 08, 2008 9:58 AM

I have a feeling we are going to hear a lot about ACORN in the days to come. It's about time!

By main street georgia @ Wednesday, October 08, 2008 9:45 AM

HEADLINE: Industries Seeking Rescue Gave Twice as Much to Senators Who Backed Bailout

Read who got how much from whome here: http://www.opensecrets.org/news/2008/10/industries-seeking-rescue-gave.html

By Mack @ Wednesday, October 08, 2008 9:19 AM

Newt, I agree with all your premise and anyone who gets this information and the Democratic roots of the problem will most likely vote for McCain, problem is that most people will never get this information. How can we save our country from these people who want to destroy it from within. What do they think is going to happen once our way of life is taken from us.

By azpete @ Wednesday, October 08, 2008 4:46 AM

THE MCCAIN CAMPAIGN NEEDS TO MAKE THE POINT THAT I MADE IN MY PREVIOUS COMMENT. THAT POIINT IS THAT THE DEMOCRATS ARE RESPONSIBLE FOR THE ECONOMIC CRISIS WE ARE PRESENTLY IN CAUSED BY SUBPRIME MORTGAGES. The Bush administration is not responsible. The Bush Administration asked for greater regulation of Fannie & Freddie. Sen. McCain tried twice in 2005 & 2006 to get legislation passed to stop Fannie & Freddie from taking bad loans but was blocked by Democrats. Sen Obama was one of the biggest beneficiaries of Fannie & Freddie. Additionally, he worked as an organizer, trainer, and lawyer of ACORN to bully banks into makingsubprime loans.

Now Obama's campaign is benefitting from the mortgage crisis, and he is a main contributor to it. Voters should know this, and they should not turn the economy over to him. That is one of the worst things they can do. They should be made well aware of this by the McCain campaign.

By azpete @ Wednesday, October 08, 2008 3:32 AM

I heard something very similar on FNC at 9:00 pm CT on 10/5/08. The title of that show was "Saving Our Economy." I had heard a few things b4 touching on the subject, but nothing so crystal clear that IT IS THE DEMOCRATS THAT ARE LARGELY RESPONSIBLE FORTHE MORTGAGE CRISIS MESS. What I had heard b4 was he sd, he sd exchanges like tonight at the debate whereby each side blames the other side. But in general, the Democrats lay it on very heavily that the recent economic crisis is the result of failed economic policies of the Bush Administration and McCain is a continuation of Bush. NOTHING IS FURTHER FROM THE TRUTH.

THE DEMOCRATS CAUSED THE MORTGAGE CRISIS starting in 1977 under Jimmy Carter with the CRA, then with the bullying efforts of the Association of COMMUNITY ORGANIZERS for Reform Now (ACORN), featuring Barack Obama as an organizer, trainer, and lawyer. Subprime loans gained strength in 1999 under Pres Clinton. The Bush Administration under Secy Snow called for more regulation of Freddie and Fannie in 2003, but Barney Frank sd no that wld interfere w/ affordable housing. Alan Greenspan called for regulation, but none occurred. Instead Chris Dodd and Barack Obama became the the 2 biggest beneficiaries of Fannie & Freddie in the Senate. In 2005 and 2006 the Republicans in the Senate attempted to pass legislation to prevent Fannie & Freddie from taking bad loans, but they were prevented from dooing so by the Democrats. McCain introduced the bill in 2006.

By POOPLOPPER @ Tuesday, October 07, 2008 8:45 PM

Great writing. Prime example of why we would be so much better off with Newt as President.
NEWT 2012!

By jgatt1 @ Tuesday, October 07, 2008 8:19 PM

Newt… The start of the current banking problem did not start with the liberals….it occurred after you stepped down from speaker of the house with the passage of the Gramm-Leach-Bliley Act on November, 4th 1999.

From Wikipedia, the free encyclopedia:

The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub.L. 106-102, 113 Stat. 1338, enacted November 12, 1999, is an Act of the United States Congress which repealed part of the Glass-Steagall Act, opening up competition among banks, securities companies and insurance companies. The Glass-Steagall Act prohibited a bank from offering investment, commercial banking, and insurance services.
The Gramm-Leach-Bliley Act (GLBA) allowed commercial and investment banks to consolidate. For example, Citibank merged with Travelers Group, an insurance company, and in 1998 formed the conglomerate Citigroup, a corporation combining banking and insurance underwriting services. Other major mergers in the financial sector had already taken place such as the Smith-Barney, Shearson, Primerica and Travelers Insurance Corporation combination in the mid-1990s. This combination, announced in 1993 and finalized in 1994, would have violated the Glass-Steagall Act and the Bank Holding Company Act by combining insurance and securities companies, if not for a temporary waiver process [1]. The law was passed to legalize these mergers on a permanent basis. Historically, the combined industry has been known as the financial services industry.
The bills were introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA). The bills were passed by a 54-44 vote along party lines with Republican support in the Senate and by a 343-86 vote in the House of Representatives.

The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.[10]
The repeal enabled commercial lenders such as Citigroup, the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities. [11] Citigroup played a major part in the repeal. Then called Citicorp, the company merged with Travelers Insurance company the year before using loopholes in Glass-Steagall that allowed for temporary exemptions. With lobbying led by Roger Levy, the "finance, insurance and real estate industries together are regularly the largest campaign contributors and biggest spenders on lobbying of all business sectors [in 1999]. They laid out more than $200 million for lobbying in 1998, according to the Center for Responsive Politics..." These industries succeeded in their two decades long effort to repeal the act.[12]

By johnlary @ Tuesday, October 07, 2008 7:15 PM

Good advice, but is there any good reason to expect that McCain will take it? I have little confidence that he will.

By thetuggs @ Tuesday, October 07, 2008 7:11 PM

If Newt was running for President, he'd have my vote yesterday!

The media and the left wing radicals keep trying to place John McCain and George Bush in the same category. How about John MCain reminding the people how Jimmy Carter and Obama have a lot of the same views. My husband and I were paying 17% interest on our home during the Jimmy Carter era. No one says anything about that! My husband was working 2 jobs and we never relied on the government to bail us out! We are PROUD Americans!

By Anonymous @ Tuesday, October 07, 2008 6:11 PM

Let's hope that John's campaign is letting him know about these great suggestions!
Keep it up, Newt!

By CommonSenseRambler @ Tuesday, October 07, 2008 5:21 PM

Republicans are fighting this about like we fight the Iraq war, with our hands tied behind our back.

I guess it's politically correct to take the high road by playing nice, making weak references and pandering to the media opinion polls.

Meanwhile, our US enemies hold nothing back in their efforts to destroy America. The liberal left simply has no rules and will stop at nothing to get what they want, kill freedom.

We just sit here and take it. Meanwhile, the few leaders willing to tell the truth are not big enough players, Newt, Rush etc.

Our time will only come if we get ourselves organized and attack from the grassroots level. If McCain doesn't want to do, we need about 5 million individuals that are willing to stir up the media.

By Brad Wood @ Tuesday, October 07, 2008 5:10 PM

GET IT!!! IT's Washington at is porkiest. The time for true reform is now! We are fed up with polititions that dont work for America, but for their buddies and own personal reasons.We are fed up with the mismanaging of our money. We are sick and tired of having our money taken from us and squandered by Washington for political gain (Both parties).We should demand an explantion of how this crisis happened, and who was responible for it. If laws were broken, we must want those responcible prosecuted. For those who acted unethically, we want to know who they are and what they did.and we want hearings on this matter, and we should demand they be open, and not behind closed doors.Lastly we hold ALL members of Congress responible to get to the bottom of this so that it will never happen again. Speak out!! time to start cleaning this cesspool out. Lets take our country back!

By bsharpf @ Tuesday, October 07, 2008 4:27 PM

I hope everyone who agrees with Newt will do all they can to encourage everyone they know to vote and vote their values. Too many conservatives did not vote in 2006, thus we have people in Congress who are not governing in the best interest of our country. Work to get out the vote for the McCain/Palin ticket!

By nancybassman @ Tuesday, October 07, 2008 3:35 PM

Why is it that we NEVER have a man like Newt Gingrich running for the Presidency? I am so tired of going to the polls and having the dilemma of deciding which is the lessor of the two evils. In this year's election there is NO way I would vote for Obama, but if John McCain doesn't start bringing up the REAL issues, he is going to go down in flames and we will be stuck with the leftwing nuts in Congress and a Marxist for a President. I am losing sleep at night over what this country will look like in four years.

By Jerry.Starling1 @ Tuesday, October 07, 2008 3:23 PM

Has anyone besides me noticed that when government starts subsidizing something, the price goes up? Fifty years ago, the minimum wage was $1.00 per hour and a year at college cost c. $1,000. I was able, by working summers and a few hours during school, to graduate with a total debt of $150.00. Then in my senior year, the government started offering loans and other "student aid". Since then, tuition and other costs for college have shot up - to the point that the same college now costs nearly (if not more than) twenty-five times what it cost then. In the same time, the minimum wage has gone up at a much slower pace.

Isn't this also what happened in the housing market? When the government began to interfere in the loan process, we got a housing bubble that could not sustain itself! When the bubble burst, partly because of the ARM, no-down payment mortgages, it dragged the entire banking system down with it!

By Bumper595 @ Tuesday, October 07, 2008 3:02 PM

If one particular point of view in our society is a problem, why do we only hear about it from opponents? I feel as if the solutions to the gigantic problems the world (and of course the USA) face are only going to be confronted by a unified force, not a squabbling mass. Even though it seemed there was some type of understanding found concerning the banking/lending problem just averted (for a short time) how can we be sure there will be a unified force to solve problems in the future?

By MMS @ Tuesday, October 07, 2008 3:01 PM

Its seems that a growing irrationallity is pervading everything in the West. One can speak about an enormous breakdown.
The current perversion of our freedom, that has been inoculated by the left (like a narcotic), allows disasters like this. Which will be the next disaster?

By geokstr @ Tuesday, October 07, 2008 12:15 PM

Is anybody looking into the suspiciously convenient timing for this whole crisis? Peolple like Dodd, Frank, and their cronies at Fannie/Freddie, even Henry Paulson, must have known something like this was coming for at least a year. Why did it come to a head just 7 weeks before the presidential campaign featuring a Marxist candidate, and just one week after the introcution of Sarah Palin had put a crimp in Obama's coronation plans?

Just a hugely providential coincidence for Obama? I think not.

I have looked all over the internet without success for some explanation of why this hit the fan precisely when it did, and not months ago, when the situation would have had time to sort itself out before the election. Or even months from now, when it would not affected the election at all.

In my opinion, the dems panicked over Palin and proceeded to play the mother of all October surprises. If they had been able to have the pre-Palin sweep they envisioned without using it, it would have been even better for them. They could have revealed the "crisis" some time shortly after the inauguration and then had absolutely no problem in socializing the entire banking industry.

By hal_reid @ Tuesday, October 07, 2008 8:47 AM

While Newt is "right on", a key subject that no one is asking about is "Where is the Justice Department"? How is it that these people like Barney Frank, etc., are still walking around?

It seems the greater the aroma, the more things are covered up. I'll bet if you look for the guys at the Justice Department, they are all at Dunkin Donuts, slapping each other on the back checking who has the rustier handcuffs.

By Common Sense @ Monday, October 06, 2008 11:21 PM

Absolutely! I feel the DNC and Dem's conspired to undermine our economy the past 2-3 yrs to set the stage for the platform for this Presidential election and seize power... The Soros short selling had a greater impact than they realized ... I pray the fraud and those responsible will be exposed so our country can re-establish trust in our government. Thank you Mr Gingrich for being an agent of truth and a man of integrity.

By main street georgia @ Monday, October 06, 2008 9:22 PM

WOW! Very powerful. Thanks again, Newt.

By frmardi @ Monday, October 06, 2008 7:45 PM

This Articl IS right on. I had to refinance my house three times to get rid of Countrywide and only got away from them when I agreed to pay a higher percentage at Wells Fargo. I also wonder why McCain doesn't bring up Obamas work with Acorn training them on how to set these mortgage companies up for law suites

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