America’s Real Anxiety
September 26, 2008

The President addressed the nation on Wednesday night to answer Americans’ “good questions” that “deserve clear answers.” He acknowledged Americans “felt anxiety about their finances and their future.” After he was done Americans have great reason to be more anxious than ever.

The President said that “easy credit—combined with the faulty assumption that home values would continue to rise—led to excesses and bad decisions.” What he didn’t say is that the entitlement mentality of America caused this easy credit. He also said that “many mortgage lenders approved loans for borrowers without carefully examining their ability to pay.” That is also a result of a symptom of sickness and a meddling government telling lenders to make these high-risk loans.

The sickness in America that has been bred by a government, primarily the Democratic Party along with many Republicans, was manifested in the President’s further explanation: “Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.” This is simply investment speculation and the government should not be providing top cover for speculators.

The President described “optimism about housing values” that led to a housing boom which also caused a devaluing of homes making many mortgages worth more than the values of the homes and “as a result, many mortgage holder began to default.” Mr. President, it was not optimism but greed that drove the housing boom and taxpayers should not be required to cover this greed. These mortgages were taken with the wrong motives.

The worse of the lenders and purchasers of mortgaged-backed securities were Fannie Mae and Freddie Mac, what the President described as “companies chartered by Congress.” This led many speculators and lenders to believe “they were guaranteed by the federal government.” What does “chartered” mean Mr. President? Does it mean because these two lending companies were “established” by Congress that everyone figured it had the full backing of the government? Is that not a reasonable assumption? This alone gives reason for why the government should intervene in the economy as little as possible.

In 2005 Senate Bill S.190 introduced by Senator Chuck Hagel (R-NE), along with co-sponsor Senators Elizabeth Dole (R-NC), John McCain (R-AZ), and John Sununu (R-NH) was blocked in committee by Senate Banking Committee Chairman Senator Christopher Dodd (D-CT). This bill would have created greater oversight of lending practices.

It is probably a coincidence that Senator Dodd received more campaign contributions from Fannie Mae and Freddie Mac than any other senator. Coming in a close second was none other than Senator Barack Obama. Every legislator who opposed this bill should be publicly called out. Is it not interesting that not one Senate or House investigation has been called for by the Democratic Leadership?

The President told his fellow Americans that we cannot “stand back and allow the irresponsible actions of some to undermine the financial security of all.” Okay Mr. President, fair enough, but will these irresponsible individuals be held accountable? Why is it you failed to address what most Americans would consider fair justice?

The President warned us that “more banks could, fail including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically...” and so on. Okay, so we can’t let that happen but Mr. President not one word from you on how your administration and Congress plan on protecting Americans from this happening again.

The President acknowledged “the frustration of responsible Americans who pay their mortgages on time, file their tax returns every April 15^th, and are reluctant to pay the cost of excesses on Wall Street.”

Sir, with all due respect, you and Congress should be ashamed of yourselves. You were elected to represent We the People. You have failed miserably. Mr. President, you failed to lead and beat the bully pulpit to rally Americans to demand from our Congressmen greater oversight. When you have the Senate Banking Committee Chairman and the Democratic Party’s Presidential nominee the number one and two recipients of political contributions from Fannie Mae and Freddie Mac, something is definitely rotten in Denmark or D.C. more specifically. And what are congressionally chartered financial institutions doing giving political contributions to congressional candidates?

The President promises the rescue plan “would remove the risk posed by the trouble assets—including mortgage-backed securities—now clogging the financial system.” How? That needs to be explained to the American people before the bill is passed and signed into law. The plan also promises to “be designed to ensure that taxpayers are protected.” Again, how?

The plan is to have “the federal government put up $700 billion taxpayer dollars on the line to purchase troubled assets that are clogging the financial system.” What is the plan for these troubled assets? The President believes that “the value of many of these assets will likely be higher than their current price, because the vast majority of Americans will ultimately pay off their mortgages. The government is the one institution with the patience and resources to buy these assets at their current low prices and hold them until markets return to normal.”

So many thoughts come to mind from this statement but space allows for only a few observations:

1) Mr. President, the government does not have “resources” they have “taxpayer dollars”; please never forget that!

2) Who decides when, where, and how the “markets return to normal”?

3) How will the recovered assets be returned to the taxpayers? Taxpayers have a right to fear what Congress might actually do with these recovered assets.

Here’s the epitaph that needs to go on the current rescue plan headstone. The President assures the nation that “once this crisis is resolved, there will be time to update our financial regulatory structures.” Sorry, Mr. President, that dog won’t hunt. How likely is that to happen? Are Americans really to believe that Congress will regulate itself and its donors?

The President rightly states that “in the long run, Americans have good reason to be confident in our economic strength.” Yes, if government gets out of the way we have every reason to be confident. It is the government's meddling that has caused investor jitters.

The President finished his address with this final attempt to reassure the American people: “...history has shown that in times of real trial, elected officials rise to the occasion.”

History indeed shows that but congressional inaction and a lost presidential veto pen in recent years proves contrary to history.