OWS Protesters Should Look ToThemselves For Cause of the Crash

Occupier apparently distraught over inability to find job or
government hand out or to find port-o-potty attempts
to defecate on NYPD car

It’s popular to say that the Occupy Wall Street  (OWS) people should be demonstrating in Washington. I don’t entirely agree. If the Occupy Wall Street  people want to protest the people who got us into this economic mess; they should be protesting themselves. The demonstrations have been organized by the same people who were in charge of the now defunct ACORN, as well as Moveon.org, unions and rest of the usual suspects: socialist, communist and anarchist organizations. These very organizations, particularly ACORN, are directly responsible for pushing for the liberalized lending standards that led to the real estate mortgage collapse which in turn caused the current recession that these OWS idiots are protesting.

The recession of 2008 was caused by a burst of the residential real estate bubble. This in turn was triggered by rising default rates among residential mortgage holders which collapsed the value of mortgage backed securities. Wall Street Banks and investment houses held much of this paper and they almost collapsed as a result. When these securities began to collapse, the default swaps, which were a kind of insurance for mortgage backed securities, also began to collapse. Apparently, the argument of the leftists occupying Wall Street is that the banks engaged in a devious and sinister plot to bankrupt themselves by lending to people who could not repay or by buying the crappy loans Fannie Mae and Freddie Mac were making.  

This assumes that they were smart enough to realize that by bankrupting themselves they would convince the Congress and the President to give them a big bailout.   Very sneaky. Of course, the argument goes, the people who got these loans they could not afford were just duped by greedy bankers into borrowing a lot of money, with little or nothing down, and living in houses they could not afford. Poor unfortunates. It was the banks , who were left holding the bag when the loans went bad, who were the real crooks here.  The reality is that the banks were making poor loans because they were being required to do so by regulations passed as a result of pressure from the OWS organizers to make these loans to the "under served."

The collapse of the residential mortgage market was actually caused by too many loans to people who could not pay their mortgages. The OWS organizers, their mindless minions in the streets and their political cousins generally on the radical left, pushed for liberal lending rules which caused massive lending to people who would never otherwise have gotten a loan in the first  place. Incidentally, no one was more involved in pushing for this crazy scheme than our very own Barak Obama, initially as a lawyer for ACORN, and later as a State and then Federal Senator. Senator Barak Obama was the top recipient of campaign contributions from Fannie Mae and Freddie Mac.   

Barak has announced he agrees with OWS, but he's not just some powerless outsider.  He's in charge of the Justice Department.  Where are the investigations let alone charges against the banks and their executives?   There aren't any. Are OWS people protesting Barak's policies?  I don't think so.  Instead this is typical liberal behavior: No facts required.   Just pick out who has the most money and blame them.  Liberals are never at fault for their own situation.

The Community Reinvestment Act signed into law by Bill Clinton coupled with regulations passed under it, liberalized lending parameters of Fannie Mae and Freddie Mac to require low down payments and  no supporting document loans to minorities and the "under served". This was supposedly designed to overcome the unnecessarily conservative lending requirements of the greedy banks which were keeping these otherwise deserving people from getting housing loans. The liberalized  law and regulations led to a massive number of low down payment or no document loans.   Some of these loans were held by Fannie and Freddi and others were bundled and sold as securitized investments on Wall Street.   As a result, the big banks held much of this paper as a high yield supposedly low risk investment.  If the banks were so involved in a fraud, why were they holding so much of the bad paper?

Even now, Fannie and Freddie hold or guarantee 50% of the total outstanding 11 trillion dollars of residential home loans in the United States. The liberal lending requirements did not just apply to Fannie and Freddie. Strict quotas for low income and minority loans were imposed on private banks for home loans that they were required to make. All of this was supposed to eliminate the racism and prejudice allegedly built into the system and keeping minorities from getting enough home loans.  But, in reality it forced banks to make bad loans which were doomed to fail.

The leftists argue that, if there had been better oversight of these loans then bad loans would not have been given. This is nonsense. It was the government itself and the quasi-government entities Fannie and Freddie that were requiring these undocumented loans in the first place. Who in their right mind would not know that there would be fraud in no document loans? Who in their right mind did not know that a person on welfare or disability or workers comp for income would not be a good loan risk?  Government reg's required this type of loan to be made.  Internal correspondence since produced show that managers at Fannie and Freddie recognized that the new lending requirements would result in bad loans that could collapse the real estate market. These warnings were ignored.

George Bush introduced legislation to stop these ultra liberal lending requirements in 2006; but, by then, the Democrats controlled both houses of Congress. Barnie Frank and Maxine Waters in the House and Chris Dodd and Barak Obama in the Senate, among others, squashed the effort. Barnie and Maxine famously claimed that Fannie Mae and Freddie Mac were sound and that the very suggestion that there might be a problem was irresponsible and causing unnecessary uncertainty in the market.

The OWS demonstrations are organized and staffed by the very individuals and organizations who were most responsible for the reckless lending policy that led to the crash. Thus, the perpetrators in a sense are righteously and indignantly protesting that their victims are not repentant enough.  This tactic is directly out of the Saul Alinski and Francis Fox Piven playbooks; i.e. overwhelm the system with more welfare claims than the system can sustain till it crashes and then blame the capitalist system and demand change. Similarly, it complies with the bottom up top down strategy announced by Van Jones, communist agitator and former Obama green jobs czar, to agitate from the bottom up so that the sympathetic people in power at the top can impose a top down solution, i.e. nationalization of industry.

 This is not a spontaneous movement, but a well planned strategy for government to ultimately take over the banking and financial sectors of the economy.  It is no surprise that Obama, Pelosi, Reid and a host of other powerful leftists promptly came out in support of the OWS movement right form the get go.
Amazingly, and sadly, it appears that the great mass of uninformed voters are falling for this deception. Polls show the public is sympathetic to OWS.  Look for increasing violence and ultimate government crack down on the banking and financial industries.  With Obama's popularity flagging and in danger of losing the election, look for this to happen before November 2012.