The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Archive for September 21st, 2008

Bush Administration Warned Congress Almost 20 Times Reforms Were Needed

Posted by iusbvision on September 21, 2008

UPDATE IV – April 7, 2009 More evidence of how Barney Frank and the Democrats blocked mortgage industry policing reform HERE.

Think the elite media will cover the story? I am taking bets. – Editor  Update: Nothing on NYT or Washpost web sites yet 11:08 AM eastern time Sept 23.

UPDATE III: Fox updated the story and has a devastating new report. The Report mirrors the investigation IUSB Vision Published  HERE, HERE, HERE, HERE, HEREHERE, HEREHERE and HERE. comments on this new report from Fox HERE.

UPDATE II: Bloomberg News covered the story and gives similar information.
Fox is not a part of the elite media but Brit Hume covered this story on Sept 23.

UPDATE I: The Republicans, in a bill co-sponsored by John McCain (see HERE), tried to change the Fannie Mae and Freddie Mac oversight regulations to those that are used by bank regulators (now they answer to the banking committee’s in Congress that set up a small agency to report to the committee’s so Congress KNEW this was coming and have for years). The bill to change the oversight rules was killed in a party line vote with Democrats against it. Alan Greenspan testified in favor of the bill (transcript HERE) and warned:

If we fail to strengthen GSE regulation, we increase the possibility of insolvency and crisis. … As I concluded last year, the GSEs need a regulator with authority on a par with banking regulators, with a free hand to set appropriate capital standards, and with a clear and credible process sanctioned by the Congress for placing a GSE in receivership, where the conditions under which debt holders take losses are made clear. has the following commentary:

By special request of Ace. Nothing here you haven’t read and/or heard before, but Fox deserves a little publicity for being willing to challenge the narrative. Especially now that we’re about to be told it’s McCain’s campaign manager and his lobbyist pals, not the Democrats they lobbied who actually cast the votes, who are the real culprits in all this. The FBI: Doing the (after-the-fact) oversight job Congress wouldn’t.

*********Original Story*********


April:The Administration’s FY02 budget declares that the size of Fannie Mae and Freddie Mac is “a potential problem,” because “financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity.”


May:The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac.  (OMB Prompt Letter to OFHEO, 5/29/02)


January: Freddie Mac announces it has to restate financial results for the previous three years. 

February:The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that “although investors perceive an implicit Federal guarantee of [GSE] obligations,” “the government has provided no explicit legal backing for them.”  As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market.  (“Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO,” OFHEO Report, 2/4/03) 

September:Fannie Mae discloses SEC investigation and acknowledges OFHEO’s review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact “legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises” and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November:  Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any “legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk.”  To reduce the potential for systemic instability, the regulator would have “broad authority to set both risk-based and minimum capital standards” and “receivership powers necessary to wind down the affairs of a troubled GSE.”  (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)


February:The President’s FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator:  “The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator.”  (2005 Budget Analytic Perspectives, pg. 83)

February:CEA Chairman Mankiw cautions Congress to “not take [the financial market’s] strength for granted.”  Again, the call from the Administration was to reduce this risk by “ensuring that the housing GSEs are overseen by an effective regulator.”  (N. Gregory Mankiw, Op-Ed, “Keeping Fannie And Freddie’s House In Order,” Financial Times, 2/24/04)

June:Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying “We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system.  Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs:  Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System.”  (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)


April:Treasury Secretary John Snow repeats his call for GSE reform, saying “Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system.”  (Secretary John W. Snow, “Testimony Before The U.S. House Financial Services Committee,” 4/13/05)

…..And the list goes on HERE. (update, the Obama administration has removed this briefing from the website – anyone surprised?)     Hat Tip Gateway Pundit

Posted in Campaign 2008, Chuck Norton, Journalism Is Dead, Mortgage Crisis, Palin Truth Squad | 2 Comments »

Fact-Check Issues Double Whammy on Obama’s Ads

Posted by iusbvision on September 21, 2008

Obama’s Social Security Whopper
September 20, 2008
He tells Social Security recipients their money would now be in the stock market under McCain’s plan. False.

Scaring Seniors
September 19, 2008
Updated: September 20, 2008
An Obama-Biden ad says McCain supports “cutting benefits in half” for Social Security recipients. False gets it right about 85% of the time, I am glad to see that they got these two correct.

Posted in Campaign 2008, Chuck Norton | Leave a Comment »

More Unions Breaking for McCain

Posted by iusbvision on September 21, 2008

It is a simple economic reality. If McCain/Palin get their way there will be a huge rush towards energy independence. Drilling, wind, natural gas, clean coal all of it; the result will be tens of thousands new union jobs that wont happen if the Democrats get their way.

Posted in Campaign 2008, Chuck Norton, Other Links | Leave a Comment »

MORE CENSORSHIP: Dems Threaten Charity’s Tax Exampt Status if They Let Palin Speak, Dems Threaten ABC’s Broadcast License, Obama Threaten’s WGN for not censoring for him, Universities & leftist bloggers going censor happy…

Posted by iusbvision on September 21, 2008


This site, and others such as the Foundation for Individual Rights in Education, and the Alliance Defense Fund, have demonstrated that there is no shortage of political activists and academics who are eager to censor people, even illegally and are quite bold in their attempts to get away with it. Take a look at the category called “Campus Freedom” on this page and you will see 100 articles with most of them dealing with illegal censorship dome by state employees or professors. Nearly all of the people who engage in the behavior are leftists. I use the word leftist because liberal does not describe these people as there is nothing liberal about them.

Democrats working to censor talk radio –

Attempts to silence talk radio is a big deal among Congressional Democrats. They have something called a “fairness doctrine” that they only wish to apply to radio and not TV or Newsprint. The “fairness doctrine” isn’t about fairness at all. It is designed to silence talk radio and Nancy Pelosi, Harry Reid and Barack Obama have all voiced support for it. Right now I do not believe the Supreme Court would stand for it so things are safe for the immediate future.

Democrat threats censor ABC –

The ABC documentary based on the 9/11 Commission Report was not welcomed by the Clintons. Democrats put massive pressure on ABC to censor the documentary in favor of the Clintons. After ABC’s broadcast license was threatened by Democrats in Washington ABC caved and has since refused to release the unedited DVD of the movie. It cost ABC $40 million to make the film and they refuse to sell it because they are frightened. Now a documentary has been made about thie Censorship called “Blocking the Path to 9/11”.

I wrote a fully sourced article about this subject two years ago and you can view it HERE.

Far left academics go censor happy –

Right here at IUSB I have had to fight censorship at the American Democracy Project, the proposed (and defeated) bulletin board policy, attempts to sensor the Preface (student newspaper), and attempts to punish students for constitutionally protected speech and guess what political ideology the perpetrators had in common?

Obama threatens WGN if they won’t censor for him –

According to collegues Obama worked with at the University of Chicago, Obama was not someone who could tolerate people who would dare disagree with him:

Dr. Lott also commented on Barack Obama and the years they spent together at the University of Chicago:

Hopefully, Biden will balance off Barack Obama’s partisan tendencies. The Obama that I knew while we were both at the University of Chicago Law School during the 1990s was someone who disliked talking to people with whom he disagreed. Possibly it was just his extreme dislike of gun ownership, but I had more than one occasion when my attempts to talk to him ended in him turning his back and walking away.

The media’s portrayal of Obama as willing to work with those who disagree with him is not the person that I remember from a decade ago.

Barack Obama is someone who has shown his appreciation of strong arm censorship tactics as well. Obama has been pressuring WGN Radio with harassment, threats to use the FCC and asked the Justice Department to look into to a criminal probe of WGN and host Stanley Kurtz all because Obama did not like the research a guest on the show was doing into Obama’s work as Chair of the Annenberg Challenge project that had goals including:

During Obama’s tenure as Annenberg chairman, Ayers’ own education projects received substantial funding. As we’ve noted in our series, “The Audacity of Socialism,” Ayers, now a tenured distinguished professor of education at UIC, works to educate teachers in socialist revolutionary ideology, urging that it be passed on to impressionable students.

One of Ayer’s descriptions for a course called “Improving Learning Environments” says prospective K-12 teachers need to “be aware of the social and moral universe we inhabit and . . . be a teacher capable of hope and struggle, outrage and action, teaching for social justice and liberation.”

The Annenberg papers are quite extensive – 132 boxes containing 947 file folders with 70 linear feet of material. They undoubtedly contain more surprises regarding Obama’s relationship with Ayers, one of many relationships Obama has sought to hide.

Democrats threaten charity’s tax exempt status if they let Palin speak at Iran protest –

Ad has been reported, both Hillary Clinton and Sarah Palin were invited to speak at an anti-nukes for Iran rally. Both had accepted, unconfirmed reports say that the Obama campaign leaned on Hillary to cancel. Hillary did cancel and refuses to talk to reporters about it.

The charity invited other Democrats including Joe Biden and in the past has enjoyed bi-partisan support at these protests. Confrmed reports (with video) from WCBS say that the Democrats threatened the tax exempt status of the charity if they did not disinvite Palin. The story and the video report are HERE.

Excerpt from WCBS:

Sources tell CBS 2 HD that a decision to disinvite Palin from the high profile rally after Clinton pulled out in a huff came as the result of intense pressure from Democrats.

“This is insulting. This is embarrassing, especially to Gov. Palin, to me and I think it should be to every single New Yorker,” Assemblyman Dov Hikind, D-Brooklyn, told CBS 2 HD.

The groups sponsoring the rally against Iranian President Mahmoud Ahmadinejad speaking at the UN were reportedly told, “it could jeopardize their tax exempt status” if they had Palin and not Clinton or Democratic VP candidate Joe Biden on hand.

So all politicians were disinvited, most prominently, Palin.

“It’s an absolute shame that this has happened,” Hikind said. “To threaten organizations … to threaten the Conference of Presidents that if you don’t withdraw the invitation to Gov. Palin we’re going to look into your tax exempt status … that’s McCarthyism.”

Another Jewish group tried to step into the breach by inviting Palin to a different protest a day earlier.

“I’m absolutely appalled at the behavior of the Democrats,” said Bob Kunst of “I’m a Democrat and for the first time in my life I’m going to vote Republican. I can’t take it anymore.”

As for Sen. Clinton, she brushed right past CBS 2 HD’s Lou Young when he tried to ask her about the issue on Thursday night. comments:

NBC wrote about the tax-exemption issue two days ago but they made it sound like something the organizers had taken up of their own accord. Quote from an unnamed official involved: “The IRS is very clear, Hillary Clinton does not equal Sarah Palin… You have to have equal representation of candidates.” You do? Here’s the speaker list from last year’s anti-Iran rally at the UN. Scott Garrett is a Republican congressman; as far as I know, every other pol on the list is a Democrat.

Unhinged leftist bloggers censor happy –

It is no secret that if you aren’t a leftist and you make a good argument, they delete your post at places like ‘Think Progress’ and other blog sites. What I find so amusing when when leftist bloggers come here and post a comment. Most just drop a bomb in the comment’s section and do not wish to engage in a real conversation (that they are almost sure to lose). Sometimes I return the favor and drop a little inconvenient evidence in a very nice way on their blogs; most of the time they delete or alter the evidence out of the post (of course they would be outraged if I did the same thing to them).

Leftist blogger Archcrone is an example of a hateful, unhinged, leftist blogger that sent me some traffic so I popped on over to see what was going on. What I found was a cuss word sprinkled post saying essentially that the then Mayor Palin and her police and administration were pro-rape and wanted to victimize rape victims again by making them pay for the rape kit and other parts of the investigation. This silliness has been debunked all over the blogosphere including HERE. So after posting my link “Archcrone” continued to post some outrageous spin so I followed up with this little comment:

Archcrone, I hate to spoil the fun but you are misinformed.

The federal bill you are referring to ( it updates the violence against women act to force states to pay for rape kits if they cannot recover the cost from perps) was sponsored by James Sensenbrenner. It was introduced in the House and passed before it got to the Senate.

Since Joe Biden is a ranking member on the Judiciary Committee in the Senate, all crime bills will be co-sponsored by him, as his committee position will allow him to stop any crime bill cold. The federal law does not take effect till 2009 on this issue.

Also if you bothered to read the Alaska bill first, you would see that Chief Fannon in Wasilla opposed the Alaska Bill because it made NO provision for obtaining restitution from a perpetrator and that is why he opposed it. Not because anyone wanted to stick women with the bill.

When you came to the conclusion that the administration in Wasilla were some kind of monsters, didn’t you stop to ask yourself “why would a police chief want to make sure women paid” and think twice, before you started posting these silly accusations?

At least the 2000 Illinois bill made a provision for the perp to pay if he was found guilty. But the bottom line is that many women still ended up with paying for the kit in the 2000 Illinois law. The 2000 Illinois law makes it clear why AND the recent US News & World Report article demonstrate it.

Of course if you wanted to show some consistency, how many poor women in Illinois were stuck with the bill even before the new law passed?  Was every mayor and police chief in the State of Illinois some craven jerk out to make women pay? To be consistent you would have to take that position.

Women who aren’t near destitute and who’s insurance would not cover it could still be stuck with the bill under the 2000 Illinois law.

Of course, if ideological nuts weren’t so obsessed with trying to make Palin into some craven figure, they could just read the evidence and see what was going on, but such people have no interest in the facts.

Why do you think that the Obama campaign hasn’t touched this at all…… think and get facts BEFORE you post… the order of those things IS important.

Comment deleted. Now said blogger claims that the comment above violated his comment policy…. laughable. This is the status of the left folks, in Canada they have these so-called “Human Rights Commissions” who have made it their sole purpose to silence dissent from leftism by calling it “hate speech” and a violation of “law” and don’t worry the truth is no defense. After all I have witnessed, I am sure the far left in this country would like to have a similar program.

Posted in Campaign 2008, Campus Freedom, Indoctrination & Censorship, Chuck Norton, Journalism Is Dead, Palin Truth Squad, True Talking Points | Leave a Comment »

More Media Bias to the Point of Laughable Stupidity

Posted by iusbvision on September 21, 2008

This time it is CNN.

This article from CNN criticizes Sarah Palin because one of her top advisors is ….drum roll please…. her husband Todd.

Elenoar Roosevelt is revered as a great political figure, Jackie had influence in foreign policy, Lady Bird Johnson made her husbands early political career possible, Bill & Hillary Clinton it was two heads in one, Michelle Obama the bright lawyer and partner of Barack Obama who adds so much substance to everything Barack does…and Todd Palin… the evil SHADOW GOVERNOR that CNN and the critics object to….

Give me a break.

UPDATE: Now the Washington Post has the “unaccountable husband” piece. The double standard here is amazing. Spouses of government executives oftem play a role in things. Of course this is about what I expect from the WashPost any more.

Posted in Campaign 2008, Chuck Norton, Journalism Is Dead, Palin Truth Squad | Leave a Comment »

The Wilkow Guide to Media Perception

Posted by iusbvision on September 21, 2008

Thanks to Beltway Snark for the heads up on this.

The Wilkow guide to media perception

If you have spent time in Washington:

Conservative…you are part of the problem.
Liberal…you have experience.

If you don’t have time in Washington:

Conservative….you have no experience.
Liberal….you represent change.

If you have wealth:

Conservative …you are greedy and a cheat who had advantages in life.
Liberal…you are successful and your life story is an inspiration.

If you don’t have wealth:

Conservative…you are low class.
Liberal…you are disadvantaged.

If you went to college:

Conservative…your academic pedigree is scrutinized.
Liberal….your degree speaks for itself.

If you didn’t go to college:

Conservative…you are un-educated.
Liberal…you are an artist/activist.

If you own a business:

Conservative…you are a profiteer.
Liberal…you provide jobs to the community.

If you are working class:

Conservative….you’re just a (insert job title or trade).
Liberal…you are a proletariat who finds strength in numbers.

If you believe in the wisdom of the constitution:

Conservative…you are narrow minded.
Liberal…you are a civil libertarian.

If you believe in individual freedoms:

Conservative….you have made peace with inequality.
Liberal….you are for choice.

If you take to the streets to voice your opinions:

Conservative…you are a thug.
Liberal…you are a demonstrator.

If you are religious:

Conservative….you are a fundamentalist.
Liberal…you are spiritual.

If you are serving in the military:

Conservative…you are a mindless killer.
Liberal…you wear the uniform of your country.

If you are popular:

Conservative….you have blind sheep followers.
Liberal…you are leading a movement.

If you are attractive:

Conservative…you are shallow and empty.
Liberal…you are stunning and a trend setter.

If you are un-attractive:

Conservative…you are just ugly.
Liberal…you are too intellectual to be concerned with your appearance.

If you enjoy an outdoors lifestyle:

Conservative…you are a hick.
Liberal…you are earthy.

Posted in Chuck Norton, Journalism Is Dead, Other Links | 3 Comments »

In Plain English: How Did The Biggest Financial Scandal in History Happen? – UPDATED!

Posted by iusbvision on September 21, 2008

This article is a bit long for a blog post, but if you wish to truly understand, this article is a great place to start. – Editor

First a little perspective…..

Enron generated huge press when it failed, lots of money went “POOF”, and the elite media and the Democrats had a great time “blaming Bush” for it until the investigations started and they realized that it was Democrats that worked in the Clinton administration that had set up their “accounting system” when those people worked in the private sector. It proved to be a bi-partisan scandal so it vanished from the front pages just like that.

Global Crossing was another huge one, it got even less press because just before they went belly up they gave $18 million to Democratic National Committee Chair Terre McAuliffe.

Halliburton just had a few accounting errors and the occasional overcharge, which is to be expected in an operation the size of a country in a war zone. The reported accounting and billing errors were all caught by the inspectors and it was settled easily. The press pounded it and pounded it because Vice-President Cheney used to be the CEO of Halliburton. Of course when it was learned that Bill Clinton gave Halliburton no bid contracts and Al Gore had given Halliburton an award that press went away too.

The next big one was the UN Oil for Food Program. It was supposed to administer Iraq’s oil revenues so they could be used for food, medical supplies, and infrastructure instead of weapons programs. The UN handlers managed to bilk (read rob) up to $26 billion from the program. Until Fannie Mae and Freddie Mac went belly up, this was the biggest financial scandal in world history.

The media and politicians have had a cow over $30 billion in profits from oil companies. Of course they don’t tell you that they often pay more in taxes than they make in profit, but why would politicians who demagogued the issue and a leftist press want to tell you that?

Now we have the current scams, which is approaching a $1Trillion and will go into the trillions of dollars more if these countless home mortgages do not get covered or sold in the future. This is the biggest financial scandal in the history of the world and is so big that it likely is bigger than most previous scandals combined.

Congress yanked the oil company CEO’s in front of a committee to grill them so why not Fannie Mae? Answer: Franklin Raines, James Johnson, Jamie Gorelick etc… they are all Clinton political appointees.

So now that you have some perspective, let’s start to look at how this all happened.

Before the stock market crash of 1929 and before the great depression, commercial banks and investment banks either worked closely together or in many cases were one. A single bank could do both roles. An investment bank did investments and securities and all those things associated with it and commercial banks would do home loans, savings accounts, checking, CDs etc.

One of the elements that led to the stock market crash and the depression is that the investment banks were counting the saving accounts (& deposits), mortgages (good and bad) and all they had as assets that they could use for trading in the market. When the market gets out of control and people cook the books to ensure that on paper it looks like you have a growing quarterly profits so people could get paid more things get shaky. They ended up having a lot of “bad paper” mortgages and investments and eventually it all came crashing down.

Laws were passed such as the Glass-Steagal Act. Among other things Glass-Steagal divided commercial banks and investment banks so that people’s savings would not be put at such investment risk. This law weakened the banks but disproportionately weakened the Morgan Bank which pleased the Rockefeller Bank (Yup influence peddling back then too).

Over the years other countries unified banks had an advantage over American banks so Congress moved to even things up and re-unify the banks and set up a regulation and monitoring system to make sure that what happened to help lead up to the Crash of 1929 did not happen again. The first vote in the Senate went along party lines but after compromises with Democrats and the Clinton Administration it passed the Senate 90 votes to 8. The law is called the Gramm-Leach-Bliley Act.

Clinton Signs Legislation Overhauling Banking Laws
New York Times Published: November 13, 1999

President Clinton signed into law today a sweeping overhaul of Depression-era banking laws. The measure lifts barriers in the industry and allows banks, securities firms and insurance companies to merge and to sell each other’s products.

”This legislation is truly historic,” President Clinton told a packed audience of lawmakers and top financial regulators. ”We have done right by the American people.”

The bill repeals parts of the 1933 Glass-Steagall Act and the 1956 Bank Holding Company Act to level the domestic playing field for United States financial companies and allow them to compete better in the evolving global financial marketplace.

Analysts and industry leaders say the measure will probably fuel a wave of mergers as companies compete to build financial supermarkets offering all the services customers need under one roof.

Financial stocks were winners on Wall Street today, with J. P. Morgan & Company, Citigroup, American Express and Merrill Lynch all posting big gains. That helped the Dow Jones industrial average end up 174.02 points, at 10,769.32.

The Senate approved the final bill by 90 to 8 on Nov. 4 and the House followed suit by a vote of 362 to 57. Congress had previously made almost a dozen unsuccessful attempts over the last 25 years to revise the statutes, which had increasingly come to be viewed as anachronisms.

The Obama campaign and far left web sites are blaming this law for the current economic problems. They are pointing to the first vote which was mostly along party lines but ignore the second vote which was almost unanimous. If you examine the wikipedia entry on the Gramm-Leach-Bliley Act it tells how one of the compromises that Democrats insisted upon was a strengthening of the Community Reinvestment Act (CRA).

The CRA was the first step to this crisis because even with unified banks, if sound and ethical financial practices were used all would have been fine. The Obama campaign says that re-unifying the banks and “deregulating” is what caused this and capitalism is what caused the economic problems of today, yet other countries have unified banks and don’t get these problems so what is the real problem?

The Community Reinvestment Act likely started out with good intentions. It made it illegal to engage in what is known as “redlining” or singling out loan applicants by race. The problem is that there are enough minorities in poverty stricken inner city areas that banks who simply use standard good credit practices would leave out most anyone in those regardless of race. This created a loophole for groups such as ACORN to file a long series of harassment lawsuits charging redlining. ACORN also engaged in physical harassment of bank employees and other tactics to get them to lower credit standards.

Under the Clinton administration, federal regulators began using the act to combat “red-lining,” a practice by which banks loaned money to some communities but not to others, based on economic status. “No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”

In the name of fighting “racism”  and “redlining” ACORN and the government forced banks to make riskier loans in areas less economically feasable and to customers who had a low and/or unstable income, e.g. those who are a high credit risk. Banks said it was risk management, Democrats said it was racism.

Abuse of the CRA was the first step in what became the mortgage crisis. For a more detailed article on ACORN and the abuse of the CRA, and Barack Obama’s role in ACORN please visit this link HERE.

April 3, 1998. After announcing billions in fines via CRA Andrew Cuomo is bold in pride that CRA would be abused to force banks to give bad loans.

CUOMO: To take a greater risk on these mortgages, yes. To give families mortgages that they would not have given otherwise, yes.

Q: [unintellible] … that they would not have given the loans at all?

CUOMO: They would not have qualified but for this affirmative action on the part of the bank, yes.

Q: Are minorities represented in that low and moderate income group?

CUOMO: It is by income, and is it also by minorities? Yes.

CUOMO: With the 2.1 billion, lending that amount in mortgages — which will be a higher risk, and I’m sure there will be a higher default rate on those mortgages than on the rest of the portfolio

This risk banks were subjected to was amplified because loan customers wanted fixed rates and depositors wanted a variable rate. The banks had to keep enough liquid assets to cover loans. This limited the number of loans that a bank could issue. Banks were being pushed into more lending by the political and regulatory environment. The government tracked every loan and the banks were issued a “CRA rating” by the government. So how did they get around these problems and buffer the risk?

Government Sponsored Enterprises (GSE) Fannie Mae and Freddie Mac were created as a partially private corporation backed by the US Government to buy loan bonds or buy the mortgages outright from banks. Congress created a regulation and monitoring agency called the OFHEO that reported to the Banking Committee’s in the Congress and exempted them from reporting to the Securities Exchange Commission (SEC).

OFHEO has two missions.

An affordable housing mission that reports to HUD, but has no real enforcement power and a mortgage finance mission that has almost no enforcement power and reports to the finance committee’s in Congress.

OFHEO is paid for by Fannie Mae and Freddie Mac and is not paid for by the tax payer.

Sounds odd you say? It is. Separation of powers would be true for a real constitutional agency, but Fannie Mae, Freddie Mac and OFHEO are a part of the GSE system and are not real constitutional agencies as authorized by Congress under Article I Section VIII.

Most of the mortgage industry debt is managed by GSE’s which are unique animals in government being part government and part private. That is why GSE’s do not follow the standard separation of powers as they were set up. It is no surprise that their monitoring and enforcement are not typical as well.

OFHEO has begged Congress year after year to have itself replaced by REAL banking regulators with REAL enforcement power either under the Federal Reserve or the Treasury Department. Here is an example from their 2007 Report:

OFHEO has continued to strongly support enactment of legislative reform to strengthen GSE oversight. During the past year, the agency worked with the Bush Administration, Congress and interested parties on legislation that will provide bank regulator-like powers to a newGSE regulator overseeing Fannie Mae, Freddie Mac and the Federal Home Loan Banks.The House of Representatives passed, on a bipartisan basis, GSE regulatory reform legislation (H.R. 1427) in May 2007 [Barney Frank and Finance Committee Democrat members in both houses of Congress opposed it year after year till 2007 – Editor]. It is a balanced bill that will strengthen the nation’s housing finance system by enhancing oversight of Fannie Mae, Freddie Mac and the Federal Home Loan Banks. It is my hope that the Senate will complete its work on this important legislation soon.

Democrats blocked that legislation year after year and below we posted the youtube VIDEO of members of the Finance Committee’s in Congress showing Democrats like Chris Dodd and Barney Frank and Maxine Waters all saying that Fannie Mae and Freddie Mac and the mortgage industry was in just dandy financial shape.

This was step two that led to this crisis. The abuse of CRA as we described above forced banks to make more loans available that carried more risk, so banks were eager to sell these higher risk loans to Fannie Mae and Freddie Mac. With the housing boom the inflated value of the houses it had as collateral for the loans on paper made it look like Fannie and Freddie had more collateral assets than reality could bear. With the housing market inflating due to easy loans and low interest rates making it TOO EASY to get a loan for a new home, demand for loans went up. Fannie and Freddie started buying loans at a furious rate. The more loans they bought, the more income on paper they could claim, but more and more people were defaulting on the bad loans….

Political appointees (not financial guru’s) were placed in charge of Fannie Mae and Freddie Mac; people like Franklin Raines, Jeff Johnson and former Clinton Deputy Attorney General Jamie Gorelick. It was the policy of the Clinton Administration and Congressional Democrats to lean on banks, and Freddie and Fannie to get loans to low income people so that “everyone could have a home” (besides all that loan money out there propped up and somewhat inflated the economy so it helped make the numbers look good).

So let’s add up the cards we have now, the government and Fannie and Freddie, are encouraging banks to give bad loans and Freddie and Fannie would buy them up to help absolve the banks from the risk by buying the high risk loans up. Political appointees with political motivations, rather than sound financial motivations were in charge, and the people the regulators and Fannie and Freddie reported to, was not the SEC, which demands sound accounting practices, but the congressional committees that as policy wanted more loans given out as well, mostly Democrats. Here is step three.

Corruption and influence peddling begin to infect the entire system. While the law made it clear that sound financial principles were to be practiced, political pressure caused people to look the other way. The political cronies running Fannie and Freddie realized that they could make themselves rich with tens of millions of dollars in bonuses by buying more loans to make it seem on paper that they had all this money coming in from people’s house payments as if the loans they owned were good, but they weren’t. Too many of the loans were high risk, they had bought “bad paper”. The bonuses were spread around, but they wanted to keep the cash train flowing and help their fellow political friends so Fannie and Freddie gave $200 million away in political donations, to candidates and partisan organizations, a majority of those being Democrats. Barack Obama and Banking Committee Chairman Chris Dodd were the two biggest recipients of this money in the Senate. Fannie and Freddie had become the money train for the corrupt. The regulators who reported to Congress warned what was going on but members of the banking committee who were getting paid didn’t want to hear it.

And that was step four folks.

President Bush tried to put an end to this in 2003 along with a group of Republican Senators (Dole, Sununu, Chafee, McCain). Congressional Banking leaders Chris Dodd and Barney Frank said that everything was just fine and no reforms were needed.

Before you accuse us of just trying to be partisan and making it all up here is some of the evidence. These attempts to fix the system were blocked by Democrats.

New York Times Excerpt:

September 11, 2003
New Agency Proposed to Oversee Freddie Mac and Fannie Mae

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,” Mr. Oxley said at the hearing. ”We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,” the independent agency that now regulates the companies.

”These irregularities, which have been going on for several years, should have been detected earlier by the regulator,” he added.

“These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

Here is an OFHEO report form 2006 that warned of what was coming. McCain mentions this report (in a pre-release version) in his remarks. Here is a summary from the OFHEO saying:

The report details an arrogant and unethical corporate culture where Fannie Mae employees manipulated accounting and earnings to trigger bonuses for senior executives from 1998 to 2004.

A large number of Fannie Mae’s accounting policies and practices did not comply with Generally Accepted Accounting Principles (GAAP). The Enterprise also had serious problems of internal control, financial reporting, and corporate governance. Those errors resulted in Fannie Mae overstating reported income and capital by a currently estimated $10.6 billion.

Here is McCain’s Bill and Statements:

S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005
A bill to address the regulation of secondary mortgage market enterprises, and for other purposes. Here is the text of the bill. HERE is the link to McCain’s remarks on the floor of the Senate. The bottom line, Bush and McCain, who Obama accuses of knowing nothing about the economy and putting us in this mess, predicted it and tried to fix it, while Obama and Dodd and others were taking the largest sums of money from these people. They should have gone public and made a big stink in the press, but Republicans since Nixon have been awful at communications strategy.

The House version of S.190 was H.R. 1461

In fact Senators Sununnu, Hagel, and Dole introduced this legislation repeatedly (link HERE).

While I do not like quoting party sources THIS LINK (now taken down) from has some good information, fully sourced, that is pretty spot on. It leaves out that some Republicans were a part of this influence peddling scandal though.

You can also read quotes of what Senators and Representatives said about Fannie Mae and Freddie Mac HERE.

Here is a video of McCain lecturing on the issue:

Step 5 … After the Enron scandal the Congress passed a new regulatory law called Sarbanes-Oxley. This law had a major flaw. It changed the accounting rules laws so that a non-indexed mark to market rule was used.

What it does, according to federal accounting rules, is artificially lower the value of an asset or security that has lost value and artificially inflates an asset’s or security’s value when the market is going up. So when these mortgage securities crashed companies had to say they were worth nothing (because no one wanted to buy them) in spite of the fact that there is a house there that has some value. This problem was a real factor in why things crashed so quickly because it lowered the liquidity rating and solvency rating of those assets artificially.

When the housing market was going up the companies holding them had their rating inflated by them, making it all look dandy on paper and when they crashed they had their rating set artificially low and the company fell below solvency standards.

Former House Speaker Newt Gingrich and many business leaders and economists asked to have this rule fixed; no one in government listened.

Fast forward to today.

Three events in the economy greatly accelerated the rate of default on the loans. Energy prices skyrocketed because of increased global demand and OPEC learned that it could gouge us and we had no immediate way of stopping them. This caused food, transportation, etc. prices to skyrocket and slowed the economy. Many states were raising property taxes and as time went on housing had become so inflated that the market values had to make an adjustment. If the value of homes just went up and up eventually people could not afford to buy a home so the market had to adjust.

Step 6: The number of home loan defaults skyrockets and it all crashes down to the mess we have now.

As you can see, the banking unification of Gramm-Leach-Bliley Act would have been fine if the system was not filled with corruption, cronies, politics, and regulated by Congress. A system could have been set up where high risk loans were made cautiously and generally accepted accounting and finance practices were used. If that was done, we would not be in the spot we are in. This is not and was never a problem with bank unification, it was a problem with influence peddling and political cronyism. What we need are ethics laws that have jail time teeth and regulatory laws that help to protect the regulators from political pressures. For more details on the influence peddling part of this scandal and the political consequences click HERE.

The left and the Obama campaign are saying essentially, “Oh so you Republicans are the big regulators now…what happened to low regulation and free markets” This article is a common example

Those who make such arguments are counting on people’s ignorance. While conservatives believe in less government they do not believe in NO government. It is a proper constitutional role of government to protect people from fraud and theft. A proper policing structure to help ensure safety and stability to prevent fraud and promote ethics is a proper role of government that no conservative would object to. This kind of criticism is just designed to deflect attention away from the real issue here; corruption and influence peddling in Congress.

UPDATE: Famed author and legal scholar Mark Levin gives a highly charged yet factually accurate lecture on how this all came about. Levin is a partisan guy, but the facts he gives are verifiable and the analysis is sound. Levin is furiousabout this scandal so there is some adult language. People should be carted off for influence peddling and bank fraud. Barney Frank and Chris Dodd should be removed from the Banking Committee’s in Congress immediately. Hat Tip for the link, we love you guys.

UPDATE II:Bloomberg Financial News gives a similar analysis to ours today (Monday Sept.22)

UPDATE III: comments

UPDATE IV: FBI investigates fraud at Fannie Mae and Freddie Mac… thanks W it’s about freakin’ time.

UPDATE V: Brit Hume covered this story on Sept 23 and came to many of the same facts we did here at IUSB Vision

The Republicans, in a bill co-sponsored by John McCain (see HERE), tried to change the Fannie Mae and Freddie Mac oversight regulations to those that are used by bank regulators (now they answer to the banking committee’s in Congress that set up a small agency to report to the committee’s so Congress KNEW this was coming and have for years). The bill to change the oversight rules was killed in a party line vote with Democrats against it. Alan Greenspan testified in favor of the bill (transcript HERE and HERE) and warned:

If we fail to strengthen GSE regulation, we increase the possibility of insolvency and crisis. … As I concluded last year, the GSEs need a regulator with authority on a par with banking regulators, with a free hand to set appropriate capital standards, and with a clear and credible process sanctioned by the Congress for placing a GSE in receivership, where the conditions under which debt holders take losses are made clear. has the following commentary:

By special request of Ace. Nothing here you haven’t read and/or heard before, but Fox deserves a little publicity for being willing to challenge the narrative. Especially now that we’re about to be told it’s McCain’s campaign manager and his lobbyist pals, not the Democrats they lobbied who actually cast the votes, who are the real culprits in all this. The FBI: Doing the (after-the-fact) oversight job Congress wouldn’t.

UPDATE VI: Bloomberg News covered the story and gives similar information.

UPDATE VII:Fox updated the story and has a devastating new report. The Report mirrors the investigation IUSB Vision Published HERE, HERE, HERE and HERE. comments on this new report from Fox HERE.

UPDATE VIII: Bill Clinton sets the record straight on the Gramm Leach Bliley Act. It was not the deregulation Obama said it was, and it had little to do with the mess we see ourselves in now.

A running cliché of the political left and the press corps these days is that our current financial problems all flow from Congress’s 1999 decision to repeal the Glass-Steagall Act of 1933 that separated commercial and investment banking. Barack Obama has been selling this line every day. Bill Clinton signed that “deregulation” bill into law, and he knows better.

In, Maria Bartiromo reports that she asked the former President last week whether he regretted signing that legislation. Mr. Clinton’s reply: “No, because it wasn’t a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter.

“But I have really thought about this a lot. I don’t see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn’t signed that bill.”

One of the writers of that legislation was then-Senator Phil Gramm, who is now advising John McCain, and who Mr. Obama described last week as “the architect in the United States Senate of the deregulatory steps that helped cause this mess.” Ms. Bartiromo asked Mr. Clinton if he felt Mr. Gramm had sold him “a bill of goods”?

Mr. Clinton: “Not on this bill I don’t think he did. You know, Phil Gramm and I disagreed on a lot of things, but he can’t possibly be wrong about everything. On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I’d be glad to look at the evidence.

“But I can’t blame [the Republicans]. This wasn’t something they forced me into. I really believed that given the level of oversight of banks and their ability to have more patient capital, if you made it possible for [commercial banks] to go into the investment banking business as Continental European investment banks could always do, that it might give us a more stable source of long-term investment.”

We agree that Mr. Clinton isn’t wrong about everything. The Gramm-Leach-Bliley Act passed the Senate on a 90-8 vote, including 38 Democrats and such notable Obama supporters as Chuck Schumer, John Kerry, Chris Dodd, John Edwards, Dick Durbin, Tom Daschle — oh, and Joe Biden. Mr. Schumer was especially fulsome in his endorsement. commented on this issue HERE

UPDATE IX: Investors Business Daily and Human Events Magazine came out with a similar analysis (albeit they are a bit more strident in their partisanship) on September 30th, nine days after the IUSB Vision. Once again we beat the big guys. These two articles, especially the one from Human Events, has much evidence we demonstrated or linked too.

UPDATE X: Dennis Prager Explains how this happened on his radio show and famed author and economist Dr. Thomas Sowell’s explanation mirrors our analysis HERE

UPDATE XI – There are two other factors that aided to magnify the crisis. The main thing that is missing in my series of articles is a piece that explains the role of the Federal Reserve. In keeping interest rates artificially below market levels for political reasons, they encouraged bad lending and the housing market bubble. Dr. Hayek wrote a paper on this subject that helped him get the Nobel Prize for Economics.

Another factor that I left out because it gets too much into the weeds of financial technospeak is the “credit default swaps” or CDS. A credit default swap (CDS) is like an insurance policy on an investment. You by the CDS and if your investment tanks the CDS pays you a portion of what you lost. As the housing market became more inflated, and along with it the issued mortgage securities, more people bought this type of insurance. When it all crashed the CDS insurance had to be paid to those who lost and as a result in helped bring down Lehman Brothers, AIG etc.

Every facet of the mortgage crisis story, who benefited and who is lying can be found HERE, HERE, HERE, HERE, HERE, HERE, HERE, HERE and HERE. – Editor

Chuck Norton

Posted in Campaign 2008, Chuck Norton, Mortgage Crisis, Other Links, Palin Truth Squad | 16 Comments »

Profiles in Journalism – Time Magazine: McCain’s Franklin Raines ad is racist because, um, he released it before the Jim Johnson one

Posted by iusbvision on September 21, 2008

2008 is truly the year Journalism died. As has been demonstrated time and time again, Journalists are making more biased attacks on Republicans than Democrats are. These attacks as we have shown, as well as other smart blogs, do not even pass a basic public records fact check. Literally they invent lies and publish them as truth and when called on it rarely is there a retraction.

Today it is Time Magazine, who was jumping at the chance to say that the McCain ad about former Fannie Mae CEO, thief and con artist, who has been an economic advisor to the Obama campaign, Franklin Raines, is a racist ad because Raines is Black & that it did not mention the OTHER former Fannie Mae CEO, thief and con artist, who has been an economic advisor to the Obama campaign, who happens to be white James Johnson wa snot in the ad. Well the Johnson ad came out hours after the Raines ad did so Time was eating crow….enjoy how they tried to weasel their way out of this one….

Cuffy Meigs is all over it. This started last night with Karen Tumulty asserting, on the basis of zero evidence except her own Gergenesque “I know it when I see it” secret racial decoder ring, that McCain’s ad was racist for showing a white victim being exploited by former Fannie Mae CEO turned Obama advisor Raines, who’s black, but not former Fannie Mae CEO turned Obama advisor Jim Johnson, who’s white. Come the morning and what do you know: Here’s that Johnson ad now. Was it rushed into production to head Tumulty and the racial paranoiacs off at the pass? Nope — according to Ana Marie Cox, it’s been in the works for days.

The facts are pointing one way and her secret racial decoder ring’s pointing in the other. What’s an honest reporter to do? This, of course:

Yes, Ana. The ad pointing out the Jim Johnson connection to Obama’s campaign is fair, which raises the question of why the campaign didn’t air that one in the first place.

Really? Why does it raise that question? What significance lies in the fact that one ad dropped 12 hours before the other? No word yet from Time HQ. But if you think I’m kidding that her argument boils down to “I know it when I see it,” here’s Tumulty explaining her “logic” in the comments:

I have been a political reporter long enough to have lived through Willie Horton, the Jesse Helms infamous “hands” ad and to have covered races in the South where people have used the slogan “one of us.” I know what this stuff looks like. In this case, the McCain campaign chose NOT to draw attention to the very real connections between Fannie Mae and the campaign (Jim Johnson and campaign contributions), and instead, focused on this one. If Raines had been included in an ad that mentioned the others, that would have been well within the bounds of fairness as well.

QED. Karen Tumulty knows, and that’s that [LOL – click the links for more info].

Posted in Campaign 2008, Chuck Norton, Palin Truth Squad | 1 Comment »

The Man Obama Wants to Chat With

Posted by iusbvision on September 21, 2008

Warning adult language.

Is this the man we should talk with at the Presidential level without precondition? If so please explain what good would come of it.

The One reiterated his willingness to meet with Chavez as recently as May,just a day before he turned around and called for the isolation of regimes that support FARC — like, um, Hugo Chavez’s. A gaffe like that would destroy McCain or Palin, but in Obama’s case it’s merely further evidence of how supple and nuanced his intellect is [just ask the elite media].

Posted in Other Links | Leave a Comment »