There is no room for rational thinking anymore. Lies, lies and more lies have infected our lives and it’s only a matter of time before the web of deceit becomes so entangled and burdensome that is falls apart—And it will fall hard if we don’t recognize what is at the core of US corruption.
Everything in politics is black and white, based on gut reactions to issues. We’ve all seen the Republican candidates and their 15,000th circus debate of foolish ideas—They are a mess. Herman Cain doesn’t know what’s going on in Libya except that whatever Obama is doing is wrong, Governor Rick Perry (R-Texas) can’t even name the three federal agencies he wants to eliminate and Bachmann (R-Minn.) wants to continue to torture suspected terrorists giving the executive unlimited and unchecked power in times of war. The idea of abiding by international law, US law and the idea of “checks and balances” is now something that is radical to Republican (and Democratic) candidates these days.
I want to focus on Bachmann because she has a lot of momentum behind her and she knows what she is doing. She’s not ignorant by any means and does an excellent job at deceiving her audience with half-truths. She is the most intelligent candidate and has a “backbone of steel.”
Bachmann said in her early October debate that under the Obama administration, the ACLU has been running the CIA. She says this because she feels as though there should be no oversight when it comes to the FBI, CIA or the executive, especially in times of war. She’s anti-government, yet she supports unlimited, monarchical power to the executive and the military industrial complex. She’s a constitutionalist, but she refuse to call Obama out for bypassing Congress to go to war with Libya.
Here is what she said (or didn’t say) about Wall Street in that debate:
[…] it was the federal government that demanded that banks and mortgage companies lower platinum-level lending standards to new lows. It was the federal government that pushed the subprime loans. It was the federal government that pushed the Community Reinvestment Act. It was Congressman Barney Frank and also Senator Chris Dodd that continued to push government-directed housing goals; They pushed the banks to meet these rules. And if banks failed to meet those rules, then the federal government said, ‘We won’t let you merge. We won’t let you grow.’ There’s a real problem. It began with the federal government and it began with Freddie and Fannie […] They put American mortgages in a very difficult place […] The fault goes back to the federal government […] Dodd Frank institutionalized all of these problems […] It’s the Jobs and Housing Destruction Act.
So Wall Street bares none of the blame in this debacle. She says it was the federal government that pushed for lowering the platinum-level standards on mortgages. I respond to that by asking who pushed for these housing acts? Also, if Wall Street is the victim, how did they get out of the situation with bailouts and billions in bonuses? They must really be hurting.
And saying that if the banks didn’t comply, they wouldn’t be able to merge is as big of a lie as you can utter. Under the Gramm-Leach-Biley Act of 1999, they were able to do so. And they did.
Bachmann said that the Community Reinvestment Act of 1977 somehow led to Wall Street taking risky bets, but never mentioned Bush’s American Dream Downpayment Assistance Act of 2003 that was aimed at helping 40,000 families per year pay for their mortgages. By the way, the Community Reinvestment Act never forced banks to lend to subprime borrowers, it was aimed at stopping a practice in which banks did not lend to qualified borrowers because of their community. This is also known as racial discrimination.
And how can she say that the Dodd-Frank Act of 2010 institutionalized the financial crisis when it was created after the crash as a way to prevent a double-dip? It was created in 2010, three years after the collapse of the financial system. She makes no sense.
Let’s not forget about the Gramm-Leach-BIley Act of 1999 (which was overwhelmingly supported by Democrats and Republicans) that deregulated Wall Street and allowed them to gamble with investors’ money instead of their own. Wall Street is smart, they knew that they wouldn’t make money through lowering their loan standards, so they found money elsewhere. They, insurance firms, found money and circumvented this issue through receiving premiums for insuring an investor’s (i.e., a bank or a trust with mortgage-backed security) loans to a borrower with a bad credit rating. A bad credit rating means that you are less likely to pay your loan, so you have a higher chance of defaulting.
This exchange of premiums for insurance in case a borrower defaults on their loan is a financial instrument known as a credit default swap (CDS). In 2008, the derivatives market was worth $596 trillion, but the value of the world’s financial assets were only $167 trillion. How can this be? It’s because the money was created out of thin air and there was more money to be made through trading, not through collecting interest based on sensible loans and business practices. Money was made through thousands of risky trades in exchange for premiums. And many of the insurance firms didn’t have the money to pay investors if a borrower defaulted on their loan. Brokers were making hundreds of millions of dollars, sometimes in one trade. Basically, Wall Street was betting against the well-being of the financial market for short-term gain.
To sum it up, Wall Street created money through complicated financial instruments and by betting against the nation’s future. But these guys are to be deregulated, right?
The Dodd-Frank Act is a joke because it doesn’t even touch what really brought down this economy: the derivatives market.
None of the Republicans will every talk about this because they have no interest in upsetting the people who fund their campaigns. Democrats won’t touch this issue because they are too busy defending their actions against the Republicans who are always on the attack. It’s a shame that the public is left to choose between the two.