Also serving the communities of De Luz, Rainbow, Camp Pendleton, Pala and Pauma

RE: 'Privatized profits, socialized risk' [Village News, 9/25/08]

Mr. Monday’s comments caused research on my part. It shows “de-regulation” isn’t the culprit; it’s the overbearing hand of government. Our woes started with the Community Re-investment Act, when the Liberal philosophy of “helping” society resulted in force-feeding mortgage funds into the hands of those who did not deserve access to the money because they had no way of paying it back.

The tried and true “20 percent down and prove your financial worth” was discarded in favor of loaning to unqualified borrowers. During Clinton, the Federal Reserve even threatened the banking community with lawsuits if they didn’t include Unemployment and Welfare payments as “valid income sources” in the qualification process.

In 2001, Bush’s first year, warnings about the impending crisis were issued by the White House. In response, Barney Frank (D) denounced the warnings as having “no concern about housing.” Fast forward to 2005, Greenspan weighs in, “If F-Mae and F-Mac continue to grow…we are placing the total financial system of the future at a substantial risk.”

A growing body of economists was saying the same; however, the Democrat controlled Financial Committees, Senate and House, insisted on continuing the process. The Federal Housing Enterprise Regulatory Reform Act of 2005, co-sponsored by McCain, would have put the brakes on the runaway lending but it never became law because of a straight party-line Democrat vote opposing it in Committee. The Dems have put up many “red herring” arguments to the contrary but the record is clear and the “blame” resides with them.

Robert C. Johnson


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