Key points:

  • Community Reinvestment Act of 1977 created during Carter Administration.
  • Under the Clinton Administration, the Democrat Congress poured fire on it by enacting the Financial Services Modernization Act of 1999.
  • This created the environment for predatory lending by Wall Street and was guaranteed by Fannie and Freddie.
  • Banks were sued if they did not make loans to low-income, minority consumers.
  • John McCain warned Congress about these problems (So did Ron Paul).
  • Congress did not listen.
  • Media did not report.
  • Why would they? Home prices were skyrocketing because of the flood of buyers (re: demand) into market compared to the limited supply of homes.
  • Low-income consumers begain to default on their loans they could not afford.
  • Banks began to foreclose.
  • Housing prices began to tank. The Market began to get nervous.
  • Congress did NOTHING.
  • A veritable snowball of foreclosures continued. Housing prices bottomed out.
  • Fannie/Freddie and Wall Street fat cats jumped ship with “golden parachutes” (one as much as $25 million) because of “accounting inaccuracies.”
  • Henry Paulson firmly plucks a number out of the air (or some other orafice) and tells Congress it will cost $700 Billion to fix this mess.
  • The House does not pass the “Bailout Bill.”
  • The Market dives 777 points.
  • The Senate, ignoring the Constitution, takes a tabled bill about mental health and adds approximately $700 Billion to it with some provisions to bailout the economy. It passes.
  • The House, which narrowly defeated the bill just four days earlier, decides it is a better idea to pass the aformentioned un-Constitutional Bill sent from the Senate, with an additional $110 Billion of bacon attached. (Apparently in the current economic climate of thousands of foreclosures, repossessions, lay-offs and unenployment, not to mention and expensive two-pronged war in the Middle East, it is way more palatable to foist over $810 Billion on the taxpayers of the US and not just $700 Billion). Good idea.
  • With the Bush Administration, Treasury Secretary, Chairman of the Federal Reserve, Democratic Leadership, Republican Leadership and the Mainstream Media (MSM) telling us we “need” this bailout bill, or we will be living in a recession/depression until the next ice age, the Dow drops another 157 points on the great news!
  • The President signs the bill into Law.
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