Obama Organizing, Browbeating Risky Lending

“Direct Action” by Obama from Saul Alinsky, in Chicago and across the country, browbeat risky lending practices in poor and minority communities. “As ACORN litigation increased, credit standards lowered.” Obama is a proven master of economic disaster. For his prowess in shoehorning Marxian economics, FNMA rewarded Obama with $126,349 during only three years in the Senate. And the economies of the world collapsed.

Attempt after attempt of Republicans to reign in FNMA and FMAC was foolishly blocked by the Democrats, suffering from a fatal compulsion to spread wealth, and home ownership, around – whether the mortgagor could pay or not. Today, Obama and the proponents of risky home loans, dominating congress, blame capitalism.

Obama was in the thick of it, with his ACORN community organizing, and his “Direct Action;” an element of racial and class warfare, used as a blunt instrument against the finance industry. Now we make him President?

The long sordid story of government, and Obama, imposed universal home ownership is here, Why the Mortgage Crisis Happened, by M. Jay Wells:

…..1990s

With the mechanisms in place, the community organizing groups began developing directed strategies to exert more and more pressure on the lending industry in the cloak of complicity with CRA. Community organizer Barack Obama worked closely with ACORN activists. Employing the radical Alinsky intimidation tactics Obama had learned and was teaching — “direct action” — activists crowded bank lobbies, blocked drive-up teller lanes and demonstrated at the homes of bankers to browbeat risky lending in poor and minority communities. Those who resisted were accused of racism to the media and government officials.

The agitators could now stall or hijack bank mergers by filing complaints of non-compliance against the institutions. Lawsuits alleging redlining and racism began flooding the court system. With the prospect of expansions and mergers threatened, banks settled cases and, significantly, increasingly made loans they would not have normally made. The net effect, as ACORN litigation increased, was that credit standards lowered.

Initially the GSEs resisted purchasing these risky mortgages but eventually the Clinton Administration instructed them to substantially increase the percentage of these mortgages in their portfolios. The government-backed Fannie Mae and Freddie Mac of the Clinton reforms became “a feeding trough,” in the phrase of Peter Ferrara.

The poor communities and their exploitive leaders benefited from the capitalization with a surge of homeownership, at least on the surface. Wall Street benefited from increased sales of Fannie Mae and Freddie Mac and guaranteed mortgage-backed securities, as the housing market benefited from new capital channeled from Fannie and Freddie. And the GSE heads profited, with political support in Washington in the form of campaign contributions.

In the period 1989-2008, topping the list of recipients of contributions from Fannie Mae and Freddie Mac is the chairman of the Senate Banking Committee, Sen. Dodd (D-Connecticut), who received $165,400. Second on the list is Sen. Obama (D-Illinois), receiving $126,349 with only three years in the Senate. Rep. Frank (D-Massachusetts), received $42,350.

The story continues here.

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