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

W Ketchup Company Demands Obama Return Fannie Mae Contributions

Posted by iusbvision on October 7, 2008

FOR IMMEDIATE RELEASE
For media inquiries contact Bill Zachary (917) 733-3038
 

W Ketchup Demands Obama Return Fannie Mae Contributions

Eagle Bridge, NY — October 7, 2008 — In 1977, President Jimmy Carter signed the Community Reinvestment Act to force banks to lend money to low income communities. In 1995, President Clinton dramatically expanded the Act, requiring greater lending to low income, inner city populations, and allowing radical community groups to exact fees from banks for marketing these risky loans. The quasi-government institutions Fannie Mae and Freddie Mac bought many of these loans from local banks, repackaged them, and sold them to Wall Street firms.

In 1999, after the Clinton expansion of the Act had taken effect, Steven A. Holmes wrote: “In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.” Last month Congress bailed out Fannie and Freddie at a potential taxpayer cost of $200 billion.

Bill Zachary, Chairman of W Ketchup, commented: “It should not be any wonder that a housing bubble occurred as Congress forced banks to make risky loans and Greenspan lowered interest rates to 1.25%. Politicians have blamed Wall Street greed for this financial crisis, but on Wall Street greed is balanced by fear, and the market soon erases excesses. For Washington politicians, greed has no restraint since Congress can confiscate money from taxpayers at will.”

President Bush twice tried to restrict the dangerous lending banks were required to make under the Act, and in 2005 Senator John McCain proposed reform legislation. Democrats blocked the reform efforts. The New York Times defended the Act saying: “Since its inception, the law has prompted banks to channel more than $1 trillion into [low income areas] — without requiring a single dollar of Congressional spending.” Last Friday Congress passed a $700 billion rescue measure to bail out financial markets hurt by the housing mess.

Dan Oliver, CEO of W Ketchup, reacted: “Modern socialists believe government need not own the commanding heights of enterprise, but instead should direct them through tax incentives and regulatory requirements. This is the ‘Third Way’ championed by President Clinton and the UK’s Tony Blair. But socialism in any form produces the same results: poverty and misery. Leftists like Big Tuna Pelosi blame the current financial panic on free markets. In reality, while markets are not perfect and there exist individual cases of predatory fraud, market distortions perpetrated by liberals created the magnitude of this crisis.”

In the 1990’s Presidential candidate Barack Obama worked for a Chicago law firm that sued banks for not issuing enough subprime loans to low income applicants. Obama also worked and raised money for ACORN, a radical, left-wing community group that coerced banks to make risky loans by intimidating the families of bankers at their homes. The Senate Banking Committee has estimated that $9.5 billion in “commissions” have gone to groups like ACORN under the Community Reinvestment Act. Since he began his run for Congress, Barack Obama has received $126,349 in campaign contributions from Fannie Mae and Freddie Mac, becoming the second highest recipient of any Congressman in three short years.

Obama’s closest advisors include Jim Johnson, former Fannie Mae CEO who misreported his $21 million bonus as $6 million, and Franklin Raines, another former CEO of Fannie Mae who faced civil charges for overstating the company’s earnings in order to receive $52 million in bonus, in addition to his $38 million in pay.

Dan Oliver added: “We call on the government to recover the multi-million dollar payments to Obama’s advisors under the principles of common law fraud and breach of fiduciary duty. We further call on Obama to return the contributions from Freddie and Fannie, money that rightfully belongs to American taxpayers. Finally, we call for the repeal of the Community Reinvestment Act so markets can return to their function of efficiently allocating capital.”

During the ten years after the market crash of 1929, a Democratic Congress and President created the regulatory state, tripled federal spending, and sharply restricted trade, turning a short-term financial panic into the Great Depression. Senator Obama has promised to expand regulations on large sections of the American economy, has promised nearly $1 trillion in new government spending, and has proposed renegotiating trade agreements, if elected President.

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