There is plenty of blame to go around for the subprime crisis
By Leslie Marshall
Posted October 16, 2009
Published in US NEWS & WORLD REPORT
As a guest on Jay Leno’s new show recently, Rush Limbaugh stated that the subprime mortgage crisis can be blamed on: Barney Frank, Chris Dodd, Bill Clinton and … ACORN!?! As my son would say—wow, wow wubsy! Now I thought it was crazy that former President Bill Clinton was blamed for September 11. I thought it was nuts that Saddam Hussein was blamed for September 11. And now, I truly feel Mr. Limbaugh had better put down his OxyContin, and fast! To blame a community action organization for the subprime mortgage crisis?!? Even conservative listeners to my radio talk show agree that is ridiculous. As I said on my program: The financial crisis, subprime housing included, is a worldwide problem. And hasn’t the right wing been telling us that being a community organizer isn’t a job, rather a joke?
This crisis is not the fault of Clinton or Obama. How about the lenders? Homebuyers? Underwriters? Credit approval ratings agencies? The reality is that the economy was at risk of a deep recession after the dot-com bubble burst in early 2000. September 11 only made things worse. So how did the world respond? Banks tried to stimulate the economy not just here in the United States but throughout the world. That is what pushed lenders to take greater risks; like approving subprime mortgage loans to borrowers with poor credit or even some who had no jobs. Businesses like banks, real estate firms, and construction companies went out of their way to give mortgages to people who clearly did not have the means to pay them back. It was the consumer’s demand that drove the housing bubble to its all-time high; and that didn’t give us a happy ending, that gave us an incredibly high foreclosure rate.
What Mr. Limbaugh forgets is that the Republicans did their part too. As much as I like to blame G.W., the reality is President Bush did not do this alone; but he did contribute heavily. In the 1990s, President Bush was pushing his “ownership” society, encouraging everybody to purchase homes. On Oct. 15, 2002, at Georgetown University, President Bush said that there was a home ownership gap for minorities. He spoke of helping 5½ million more people to own their own home within the next five years. He called the program “American Dream Down Payment Fund.” G.W. Bush was president during the time of this financial fallout. He was the captain of the ship. He cannot be absolved of his responsibility or in this case, blame for this problem, and neither can the top dogs at the Treasury under his command. The theory was that if Americans were homeowners, they would more likely vote Republican.
So how does ACORN get blamed? It is just a community service organization helping poor people to live the American dream. How does President Clinton get blamed? Or Barney Frank? In the six years from 2001 to 2007 that the GOP controlled the White House and Congress, there was no way that Congressman Frank’s attempts to regulate the housing market would go anywhere.
Back to ACORN: Individuals go to ACORN when they’re faced with foreclosure, or after they’ve lost their home; so how would ACORN and its members benefit from a subprime mortgage circus? Wouldn’t they basically be screwing themselves to profit from something like this? Most of us had never heard of ACORN until about a year ago; before then, an ACORN was a nut a squirrel snacked on.
Lastly, why can’t we ever look in the mirror and blame ourselves? Or in this case the borrowers’ and the lenders’ greed? In short, our greed? Nothing too good to be true is. Too much money too fast isn’t a sure thing, it’s a bad thing; just ask those who borrowed from Bernie Madoff. Not to be religious here, but the Bible doesn’t say its money that is the root of all evil, it is the “love” of money that is. The lenders love their money, so do we. That’s how we got here. What’s the Shakespeare line about the fault not lying in the stars but in ourselves?