While Elizabeth “Pocahontas” Warren criticizes Donald Trump for saying he can make money in a down recession – and Trump points out that Sen. Warren is known to do a little bad-market betting of her own – it’s important to understand how the Great Recession even began – and it might not be what you think.
Back in the late 1990s – yes, under Bill Clinton – the feds were pushing mortgage lenders – specifically Fannie Mae – to lower the credit requirements so more minorities and low-income Americans could sell houses. The New York Times reported on this in 1999:
Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.
Even back then, there were skeptics. Specifically, the American Enterprise Institute raised alarms, saying if all these “low-income” mortgages fail, there would be a crisis.
”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”
And Mr. Wallison was right. When these bad mortgages were packaged and repackaged by Wall Street and sold as good investments, it all came apart when people began to default on their loans.
That’s the history and that’s how it all started. Rush Limbaugh was pointing this out on his radio show Wednesday:
What really happened was in the nineties Bill Clinton ordered these loans to be made, and Janet Reno, who was the attorney general at the time, threatened these banks with investigations, open-ended investigations into whatever they might be doing if they didn’t comply. And so they did, just like they were all called into a room during the financial crisis and told they were going to take loans or subsidies or buyouts or whatever, $25 billion, even the banks that didn’t need it. This was TARP.
So that’s what led to the subprime mortgage. It was a disaster brought to you by the United States government as presided over by Bill Clinton at the time. It’s inarguable, this is what happened. Your average Democrat doesn’t know it. They have bought hook, line, and sinker a total different story, including elected Democrats.
Rush points out that these leftist politicians have had cover for their shenanigans for years – but with a plain-talker like Donald Trump as the nominee, they’ll have nowhere to hide:
They are gonna pay a price for all of the cover the media has given them their entire careers. They’re gonna pay a price ’cause this stuff’s gonna get exposed because the media can’t help itself, it’s gonna cover Trump. Now, it’s somewhat related, NBC Nightly News last night, the two lead stories were on the TSA and VA problems. Transportation, whatever it is, authority, and the VA, and they detailed the problems. And it was pretty bad. I mean, they really, really, really spelled out how badly these two units are operating.
But not once in the entire NBC Nightly News newscast was the phrase “Obama administration” uttered. So whoever watches the NBC Nightly News, has no clue. They were not told that the TSA and the VA are part of the Regime. They were not told they’re part of the Obama administration. Therefore Limbaugh Theorem wide open once again, Obama’s ability to totally escape all accountability and responsibility for the bad things happening during his presidency.
Everybody else gets blamed. Obama gets portrayed as the guy trying to fix it. Obama gets portrayed as the guy who’s being sabotaged and screwed with. Here’s a great president, our first African-American president, he’s trying to get health care for everybody, and he’s trying to get jobs for everybody, he’s trying to do everything, and he’s got people at the TSA and the VA undermining him every day. It’s a scandal. It’s a scandal.