The Rest of the Meltdown Story

By Neal Boortz

What in the world is going on here?

You've seen the headlines, and you heard of the failures and buyouts. Lehman Brothers, Bear Stearns, Merrill Lynch, AIG; all big names and all in big trouble. Then those mysterious quasi-government agencies with names like Freddie and Fannie become wards of the state and you learn that you and your fellow taxpayers are potentially on the hook for tens of billions of dollars. At the end of the week Washington Mutual is looking for a buyer, and you start to wonder about the security of your own bank and your own savings account. Let's change that ad copy to WaMu -- boo hoo.

Somewhere in the back of your mind you understand that this is all tied somehow to bad mortgages. If you start reading a bit further to enhance your understanding you run into terms like Mortgage Backed Securities (MBS) and credit-default swaps, whatever in the world those are. Read further and you find out that a combination of falling home prices and mortgage defaults have put many investment banks and other financial institutions in deep puddin'. All this reading, all this watching the talking heads on TV, and you still don't really know what in the world is going on here.

Fear not. I'm here to help. I know ... I'm just another talk show host; but the fact is that when the stage was being set for the problems we're seeing today I was making most of my money as a real estate lawyer .. closing loans for some of the very institutions that are the tank today. This rather unique combination - closing lawyer and radio talk show host - gave me a front row seat to the politicization of mortgage loans that led us to today's headlines.

OK .. so we all know that a lot of really bad real estate loans were made. The political class would sure love for us to believe that the blame here rests squarely on "greedy" (try to define that word) mortgage brokers and lenders. The truth is that most of the blame rests on political meddling in the credit decisions of these mortgage lenders.

Twenty years ago the buzz-word in the media was "redlining." Newspapers across the country were filled with hard-hitting investigative reports about evil and racist mortgage lenders refusing to make real estate loans to various minorities and to applicants who lived in lower-income neighborhoods. There I was closing these loans in the afternoons, and in the mornings offering a counter-argument on the radio to these absurd "redlining" claims. Frankly, the claims that evil mortgage lenders were systematically denying loans to blacks and other minorities were a lot sexier on the radio than my claims that when credit histories, job stability, loan-to-value ratios and income levels were considered there was no evident racial discrimination.

Political correctness won the day. Washington made it clear to banks and other lending institutions that if they did not do something .. and fast .. to bring more minorities and low-income Americans into the world of home ownership there would be a heavy price to pay. Congress set up processes (Research the Community Redevelopment Act) whereby community activist groups and organizers could effectively stop a bank's efforts to grow if that bank didn't make loans to unqualified borrowers. Enter, stage left, the "subprime" mortgage. These lenders knew that a very high percentage of these loans would turn to garbage - but it was a price that had to be paid if the bank was to expand and grow. We should note that among the community groups browbeating banks into making these bad loans was an outfit called ACORN. There is one certain presidential candidate that did a lot of community organizing for ACORN. I won't mention his name so as to avoid politicizing this column.

These garbage loans to unqualified borrowers were then bundled up and sold. The expectation was that the loans would be eventually paid off when rising home values led some borrowers to access their equity through re-financing and others to sell and move on up the ladder. Oops.

Right now this crisis is being sold to the American public by the left as evidence the failure of the free market and capitalism. Not so. What we're seeing is the inevitable result of political interference in free market economics. Acme bank didn't want to loan money to Joe Homebuyer because Joe had a spotty job history, owed too much money on his credit cards, and wasn't all that good at making payments on time. The politicians told Acme Bank to figure out a way to make that loan, because, after all, Joe is a bona-fide minority-American, or forget about opening that new branch office on the Southside. The loan was made under politicial pressure; the loan, with millions like it, failed - and now we are left to enjoy today's headlines.

So ... why aren't you reading the whole story in the mainstream media? Come on, are you kidding me? Do you really expect the media to blame this mess on deadbeat borrowers and political interference in the free market when it is so easy to put the blame on greedy lenders and evil capitalists? Remember ... there's an election going on. One candidate is decidedly anti-capitalist. Do the math.

Neal Boortz is a nationally syndicated talk show host and co-author of The FairTax Book.

Presidential Debate 1

The first debate goes to Senator John McCain. 3 reasons:

1. Readiness: Senator McCain came out of the gate a little shaky but soon took control and put Senator Obama on the defensive where he stayed the rest of the debate. Senator McCain knew his facts, cited them frequently, and spoke in concrete terms that American's could appreciate. Senator Obama just harped on about fairness, and socializing the country.

2. "John's absolutely right...": Senator Obama conceded with Senator McCain at just about every opportunity. Over eight times he conceded that Senator McCain was right including on issues like: government waste, taxes, Iraq, and Iran.

3. Arrogance: Calling a sitting U.S. Senator "John" was a sad display of sheer arrogance. Senator McCain was serving the United States before Senator Obama could walk, talk, and much less debate. Senator Obama stood there all night long treating Senator McCain like a moron while flashing his silly grin and shaking his head. In the end he made himself look like a pompous goon.

Economics 101

WWOD?

Dear Mr. Obama...

McCain-Palin Farifax, VA Rally

Day One

Obama the Socialist

I'm reposting part of article from Investors Business Daily that highlights some of the Obama Socialist Agenda (OSA).

Obama is too smart to try to smuggle such hoary collectivist garbage through the front door. He's disguising the wealth transfers as "investments" — "to make America more competitive," he says, or "that give us a fighting chance," whatever that means.

Among his proposed "investments":

• "Universal," "guaranteed" health care.

• "Free" college tuition.

• "Universal national service" (a la Havana).

• "Universal 401(k)s" (in which the government would match contributions made by "low- and moderate-income families").

• "Free" job training (even for criminals).

• "Wage insurance" (to supplement dislocated union workers' old income levels).

• "Free" child care and "universal" preschool.

• More subsidized public housing.

• A fatter earned income tax credit for "working poor."

• And even a Global Poverty Act that amounts to a Marshall Plan for the Third World, first and foremost Africa.

His new New Deal also guarantees a "living wage," with a $10 minimum wage indexed to inflation; and "fair trade" and "fair labor practices," with breaks for "patriot employers" who cow-tow to unions, and sticks for "nonpatriot" companies that don't.

That's just for starters — first-term stuff.

Obama doesn't stop with socialized health care. He wants to socialize your entire human resources department — from payrolls to pensions. His social-microengineering even extends to mandating all employers provide seven paid sick days per year to salary and hourly workers alike.

You can see why Obama was ranked, hands-down, the most liberal member of the Senate by the National Journal. Some, including colleague and presidential challenger John McCain, think he's the most liberal member in Congress.

Election Watch

The following is a list of title about the most read articles on RealClearPolitics (NOTE: they're all linked):




Last 24 Hours:

Giving Credit Where It's Due for Palin
- William Kristol, Weekly Standard
Palin Could Be an Elusive Target for Dems
- Howard Fineman, Newsweek
When the Berserk Media Helped Palin
- Nick Cohen, The Guardian

Last 7 Days:

Palin Has Pushed the Left Over The Edge
- Andrea Tantaros, Fox News
The Palin Problem
- Maureen Dowd, New York Times
Democrats in Trouble
- Dick Morris, New York Post

Notice any trend? Looks like Gov. Palin might have been a brilliant move by McCain.

McCain Acceptance

The McCain speech was exceptional. Well-delivered, and humble (note the lack of Greek columns). The American University Students for McCain and College Republicans celebrated the evening with an energetic viewing party.

My favorite part of his speech: the conclusion. It was so well done and on-spot. Speaking through the crowds cheer, Senator McCain's message metaphorically and literally came through bold and strong.

Climate Change

Palin v. Obama

Here's an article called, "Sarah Palin vs. Barack Obama", that does a head-to-head of Gov. Palin and the Obaminator. It's written by Gerargd baker, US editor for the Times of London.

Political experience

Obama: Worked his way to the top by cultivating, pandering to and stroking the most powerful interest groups in the all-pervasive Chicago political machine, ensuring his views were aligned with the power brokers there.

Palin: Worked her way to the top by challenging, attacking and actively undermining the Republican party establishment in her native Alaska. She ran against incumbent Republicans as a candidate willing and able to clean the Augean Stables of her state's government.

Political Biography

Obama: A classic, if unusually talented, greasy-pole climber. Held a succession of jobs that constitute the standard route to the top in his party's internal politics: "community organizer", law professor, state senator.

Palin:A woman with a wide range of interests in a well-variegated life. Held a succession of jobs - sports journalist, commercial fisherwoman, state oil and gas commissioner, before entering local politics. A resume that suggests something other than burning political ambition from the cradle but rather the sort of experience that enables her to understand the concerns of most Americans..

Political history

Obama: Elected to statewide office only after a disastrous first run for a congressional seat and after his Republican opponent was exposed in a sexual scandal. Won seat eventually in contest against a candidate who didn't even live in the state.

Palin: Elected to statewide office by challenging a long-serving Republican incumbent governor despite intense opposition from the party.

Appeal

Obama: A very attractive speaker whose celebrity has been compared to that of Britney Spears and who sends thrills up Chris Matthews' leg

Palin: A very attractive woman, much better-looking than Britney Spears who speaks rather well too. She sends thrills up the leg of Rush Limbaugh (and me).

Executive experience

Obama: Makes executive decisions every day that affect the lives of his campaign staff and a vast crowd of traveling journalists

Palin:Makes executive decisions every day that affect the lives of 500,000 people in her state, and that impact crucial issues of national economic interest such as the supply and cost of energy to the United States.

Religious influences

Obama: Regards people who "cling" to religion and guns as "bitter" . Spent 20 years being mentored and led spiritually by a man who proclaimed "God damn America" from his pulpit. Mysteriously, this mentor completely disappeared from public sight about four months ago.

Palin: Head of her high school Fellowship of Christian Athletes and for many years a member of the Assemblies of God congregation whose preachers have never been known to accuse the United States of deliberately spreading the AIDS virus. They remain in full public sight and can be seen every Sunday in churches across Alaska. A proud gun owner who has been known to cling only to the carcasses of dead caribou felled by her own aim.

Record of bipartisan achievement

Obama: Speaks movingly of the bipartisanship needed to end the destructive politics of "Red America" and "Blue America", but votes in the Senate as a down-the-line Democrat, with one of the most liberal voting records in congress.

Palin: Ridiculed by liberals such as John Kerry as a crazed, barely human, Dick Cheney-type conservative but worked wit Democrats in the state legislature to secure landmark anti-corruption legislation.

Former state Rep. Ethan Berkowitz - a Democrat - said. "Gov. Palin has made her name fighting corruption within her own party, and I was honored when she stepped across party lines and asked me to co-author her ethics white paper."

On Human Life

Obama: Devoutly pro-choice. Voted against a bill in the Illinois state senate that would have required doctors to save the lives of babies who survived abortion procedures. The implication of this position is that babies born prematurely during abortions would be left alone, unnourished and unmedicated, until they died.

Palin: Devoutly pro-life. Exercised the choice proclaimed by liberals to bring to full term a baby that had been diagnosed in utero with Down Syndrome.

Now it's true there are other crucial differences. Sen Obama has appeared on Meet The Press every other week for the last four years. He has been the subject of hundreds of adoring articles in papers and newsweeklies and TV shows and has written two Emmy-award winning books.

Gov Palin has never appeared on Meet the Press, never been on the cover of Newsweek. She presumably feels that, as a mother of five children married to a snowmobile champion, who also happens to be the first woman and the youngest person ever to be elected governor of her state, she has not really done enough yet to merit an autobiography.

Then again, I'm willing to bet that if she had authored The Grapes of Wrath, sung like Edith Piaf and composed La Traviata , she still wouldn't have won an Emmy.

Fortunately, it will be up to the American people and not their self-appointed leaders in Hollywood and New York to determine who really has the better experience to be president.