Bryan Fischer
RSC: The last best hope for America
By Bryan Fischer
Pop quiz: Two quotes follow. See if you can guess the party affiliation of the man who made each statement.
Statement A: "There must be no blank check when American taxpayers are on the hook for this much money."
Statement B: "We got into this mess because of the failure of government oversight. Consequently, I think there's a role for government to play in trying to get us out of this."
If you guessed Statement A came from a Republican and Statement B from a Democrat, you would be exactly wrong. Statement B came from Idaho's Republican Congressman Mike Simpson, while Statement A came from the Democratic nominee for president, Barack Obama. Go figure.
The current crisis in America's financial industries has been created by the federal government. At its root is a Clinton-era directive to mortgage lenders to make race-based loans to non-credit-worthy customers under threat of punishment from the federal government.
The federal government directed banks to ignore historic yardsticks such as credit history ("Lack of credit history should not be seen as a negative factor"), sources of income (they were told to count welfare and unemployment benefits as income) and amount of down payment, and ordered them to underwrite risky loans or face potentially crippling class action discrimination lawsuits, on top of which they would be publicly castigated as racists.
Quite explicitly, the Fed warned, "Failure to comply with the Equal Credit Opportunity Act ... can subject a financial institution to civil liability for actual and punitive damages in individual or class actions. Liability for punitive damages can be as much as $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor's net worth in class actions."
No less than four federal agencies are charged with monitoring compliance, and banks are actually given ratings measuring how "diverse" their lending portfolios are. Banks not in compliance can find their ability to grow their business, open new branches, or merge with other banks restricted or prevented altogether.
Countrywide, which subsequently collapsed, was praised by the federal government for its "flexible underwriting criteria," and Bear Stearns, which also collapsed, made the following sales pitch in 1998: "Do we automatically exclude or severely discount ... loans [with poor credit scores]? Absolutely not."
Loans made under these circumstances defied common sense, fiscal prudence and every time-honored banking practice. Artificially low interest rates, created by the Federal Reserve, added to the problem by giving lenders another incentive to make logic-defying loans.
The Bush administration shares the blame. As recently as 2005, a top administration official crowed that "once-marginal applicants" were now being granted loans, which he called "improvements" that "have led to rapid growth in subprime mortgage lending." "Subprime" loans are the very loans that have precipitated this crisis.
It is thus no surprise that defaults are occurring in alarming numbers.
Now, President Bush and Congress are planning to bail out America's financial industry for these foolhardy loans by placing a $1 trillion brick in the backpack of America's families, a bailout that will mortgage your future, your children's future, and your grandchildren's future.
Even presidential candidate Sen. Barack Obama, a longtime friend of big government, says the size of the bailout is "staggering."
It will, in one fell swoop, triple this year's federal deficit, already at a record $500 billion, and balloon the already stupendous total federal debt to a stratospheric $11,000,000,000,000, which represents $36,667 in debt for every man, woman and child in America.
Unbelievably, Treasury Secretary Paulson said over the weekend that he wants American taxpayers not just to bail out American banks but foreign banks who do business in the U.S. as well. Yep, you read that right — he wants you and me to bail out foreign banks.
On top of all this, word is leaking out that Lehman Brothers, which collapsed into bankruptcy two weeks ago, will, despite the total collapse of the company, pay its top level executives $2.5 billion in bonuses, money which was set aside and held in reserve prior to the bankruptcy.
It is time for the America's taxpayers to rise up as one and say, "No, no, a thousand times no!"
In Friday's Idaho Statesman, Rep. Mike Simpson said the problem in all this is a "failure of government oversight." With all due respect to the Congressman, he has this exactly wrong. It is the imposition of "government oversight" and federal regulations that forced banks to make loans they otherwise would never have made, loans which have plunged the nation into its current crisis.
At last word, Rep. Simpson is planning to vote for this bailout, and Sen. Mike Crapo is tilting toward it as well. Of Idaho's congressional delegation, only Rep. Bill Sali is holding the line to protect Idaho families from this effort by federal officials to force you to fix the problems of their own making.
Rep. Sali is a member of the Republican Study Committee, a group of about 100 members of the House of Representatives who are staunchly committed to fiscal conservatism and are often the only voices of reason and restraint in the halls of Congress. On Friday, Rep. Sali sent a letter signed by 30 members of the RSC to the Treasury Secretary and the chairman of the Federal Reserve.
Said the letter, "[W]e urge you in the strongest terms possible to refrain from conducting any additional government-financed bailouts for large financial firms. Regardless of precautions taken, the risk to taxpayers and to the long-term future health of our economy remain just too great to justify."
A poll on KIVI.com (Channel 6, Boise's ABC affiliate) has viewers favoring Rep. Sali's position over Rep. Simpson's position by a 65%-35% margin as this Update goes to internet press.
If America represents "the last best hope of mankind," as Ronald Reagan said, then I would suggest the Republican Study Committee represents the last best hope of America.
© Bryan Fischer
Pop quiz: Two quotes follow. See if you can guess the party affiliation of the man who made each statement.
Statement A: "There must be no blank check when American taxpayers are on the hook for this much money."
Statement B: "We got into this mess because of the failure of government oversight. Consequently, I think there's a role for government to play in trying to get us out of this."
If you guessed Statement A came from a Republican and Statement B from a Democrat, you would be exactly wrong. Statement B came from Idaho's Republican Congressman Mike Simpson, while Statement A came from the Democratic nominee for president, Barack Obama. Go figure.
The current crisis in America's financial industries has been created by the federal government. At its root is a Clinton-era directive to mortgage lenders to make race-based loans to non-credit-worthy customers under threat of punishment from the federal government.
The federal government directed banks to ignore historic yardsticks such as credit history ("Lack of credit history should not be seen as a negative factor"), sources of income (they were told to count welfare and unemployment benefits as income) and amount of down payment, and ordered them to underwrite risky loans or face potentially crippling class action discrimination lawsuits, on top of which they would be publicly castigated as racists.
Quite explicitly, the Fed warned, "Failure to comply with the Equal Credit Opportunity Act ... can subject a financial institution to civil liability for actual and punitive damages in individual or class actions. Liability for punitive damages can be as much as $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor's net worth in class actions."
No less than four federal agencies are charged with monitoring compliance, and banks are actually given ratings measuring how "diverse" their lending portfolios are. Banks not in compliance can find their ability to grow their business, open new branches, or merge with other banks restricted or prevented altogether.
Countrywide, which subsequently collapsed, was praised by the federal government for its "flexible underwriting criteria," and Bear Stearns, which also collapsed, made the following sales pitch in 1998: "Do we automatically exclude or severely discount ... loans [with poor credit scores]? Absolutely not."
Loans made under these circumstances defied common sense, fiscal prudence and every time-honored banking practice. Artificially low interest rates, created by the Federal Reserve, added to the problem by giving lenders another incentive to make logic-defying loans.
The Bush administration shares the blame. As recently as 2005, a top administration official crowed that "once-marginal applicants" were now being granted loans, which he called "improvements" that "have led to rapid growth in subprime mortgage lending." "Subprime" loans are the very loans that have precipitated this crisis.
It is thus no surprise that defaults are occurring in alarming numbers.
Now, President Bush and Congress are planning to bail out America's financial industry for these foolhardy loans by placing a $1 trillion brick in the backpack of America's families, a bailout that will mortgage your future, your children's future, and your grandchildren's future.
Even presidential candidate Sen. Barack Obama, a longtime friend of big government, says the size of the bailout is "staggering."
It will, in one fell swoop, triple this year's federal deficit, already at a record $500 billion, and balloon the already stupendous total federal debt to a stratospheric $11,000,000,000,000, which represents $36,667 in debt for every man, woman and child in America.
Unbelievably, Treasury Secretary Paulson said over the weekend that he wants American taxpayers not just to bail out American banks but foreign banks who do business in the U.S. as well. Yep, you read that right — he wants you and me to bail out foreign banks.
On top of all this, word is leaking out that Lehman Brothers, which collapsed into bankruptcy two weeks ago, will, despite the total collapse of the company, pay its top level executives $2.5 billion in bonuses, money which was set aside and held in reserve prior to the bankruptcy.
It is time for the America's taxpayers to rise up as one and say, "No, no, a thousand times no!"
In Friday's Idaho Statesman, Rep. Mike Simpson said the problem in all this is a "failure of government oversight." With all due respect to the Congressman, he has this exactly wrong. It is the imposition of "government oversight" and federal regulations that forced banks to make loans they otherwise would never have made, loans which have plunged the nation into its current crisis.
At last word, Rep. Simpson is planning to vote for this bailout, and Sen. Mike Crapo is tilting toward it as well. Of Idaho's congressional delegation, only Rep. Bill Sali is holding the line to protect Idaho families from this effort by federal officials to force you to fix the problems of their own making.
Rep. Sali is a member of the Republican Study Committee, a group of about 100 members of the House of Representatives who are staunchly committed to fiscal conservatism and are often the only voices of reason and restraint in the halls of Congress. On Friday, Rep. Sali sent a letter signed by 30 members of the RSC to the Treasury Secretary and the chairman of the Federal Reserve.
Said the letter, "[W]e urge you in the strongest terms possible to refrain from conducting any additional government-financed bailouts for large financial firms. Regardless of precautions taken, the risk to taxpayers and to the long-term future health of our economy remain just too great to justify."
A poll on KIVI.com (Channel 6, Boise's ABC affiliate) has viewers favoring Rep. Sali's position over Rep. Simpson's position by a 65%-35% margin as this Update goes to internet press.
If America represents "the last best hope of mankind," as Ronald Reagan said, then I would suggest the Republican Study Committee represents the last best hope of America.
© Bryan Fischer
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