First it was Senator Reed, who lied last week by saying that Social Security was in good financial health and had a surplus. But more disturbing this past week was the lying that came out of the Financial Crisis Inquiry Commission, which was charged with identifying the true cause of our economic meltdown. Instead, they were groomed to blame the housing and financial crises on a lack of proper regulations.
The commission lied about the real cause of the meltdown because the truth would reflect negatively upon them and on Congress. By setting up their witnesses to lie, resulting in a cover-up, it cost the American taxpayers $10 million.
The cause of the financial crisis was the mandate put into place by former president Clinton to force banks to provide home mortgages to low and moderate income people who could not afford them. He and then Housing Secretary Cuomo knew that these Americans wouldn’t be able to keep up with their payments.
The crisis, where millions of people have either lost their homes or are upside down on their mortgages, was the direct fault of Clinton, Barney Frank, and Chris Dodd. Frank and Dodd, the chairmen of the Senate and House Finance Committees, respectively, forced Fannie and Freddie to buy sub-prime mortgages, which then gave our banks a green light to compromise their credit rating and lending practices. Through reckless lending and by selling toxic mortgages, the banks raked in windfall profits.
Because of the Fannie and Freddie debacle, the door opened for a new cottage industry of subprime lenders, who targeted low and moderate income families with little or no credit; basically lending to anyone who could breathe. What’s even more absurd is that these low and moderate income “qualifiers” could choose their own payments! And worst of all, Fannie and Freddie became a huge piggy bank for Frank, Dodd, and both political parties to use as their personal slush fund. What, are you nuts?
Ever the opportunists, our five largest banks (Goldman Sachs, Wells Fargo, JP Morgan, Bank of America, Citigroup) decided to capitalize on the subprime industry, buying bad mortgages from smaller banks and cottage industry lenders whom they were funding. By re-packaging the bad mortgages with some good mortgages, these bonds were sold to pension funds and other institutions around the country. But one problem existed. In order for bad mortgages to be sold as good bonds, the mortgages needed to be rated “AAA.” Otherwise, the fraudulent scheme wouldn’t work.
Through the influence of Hank Paulson and Berkshire Hathaway’s Warren Buffett, the bonds were given an “AAA” rating by Moody’s. Not coincidentally, Buffett had an enormous stake and influence with the renowned rating agency.
As chairmen of their respective committees, Frank and Dodd were supposed to protect the consumer and his investments, ensuring our countries economic security and the security of working families. Instead, they stonewalled the American working middle class by selling out to the elitist ‘banksters,’ and by framing Fannie and Freddie to be used as their personal piggy banks.
The Financial Crisis Inquiry Commission was created not to examine the causes of our current economic crisis, but rather to deflect the blame away from those directly responsible, including Dodd, Frank, Paulson, Buffett, and Moody’s. And the purpose behind the Stability Oversight Commission was to make themselves look responsible while they created a third bubble, the “non-earnings bubble,” which we are currently in. These are the same bubble masters that created the “tech bubble” and the “lending bubble.” Like all prior bubbles, this one will break; and when it does, the banksters will be flush with $4.5 billion of bailout money, again.