Monday, October 8, 2012

The Great Recession of 2008: Set the Record Straight

Sometimes you just have to say what the...?  So I wrote to my congressman.

Here is what I asked last Sunday...

Dear Representative Buchanan.

Ref: Democratic Party narrative, i.e., "the failed Policies of the Bush administration caused the recession in 2008." (Here, here, here, here in contrast to this, this & this)

I am trying to understand why you, along with Gov. Romney and the rest of the GOP, are allowing the Democrats to constantly and consistently repeat the lie with no one able or willing to counter it.  Why is that?  Really, I want to know what the problem is.  Or maybe it is true.  If it is true, I want to know that as well.  And I'd like to know before I receive my absentee ballot.

Whenever a Democrat, or Democratic Party supporter in the legacy media, repeats this whopper, there must be a GOP member or supporter to counter the lie with the facts.  You/they would not need to get 'into the weeds' on this, but a few simple facts would go a long way.  Here they are.

1.  Until 2007 after Democrats took control of both houses of the US Congress, there were 52 months of job growth (8.3 million new jobs), unemployment averaged under 5% through 2008, wages were up by 11.8%, GDP was averaging 2.9% annually and inflation was low.  These are the facts.

2.  If you want to know why this problem occurred, you have to look at it honestly.  Derivative securities based on mortgages. The collapse of the derivative market caused the mortgage meltdown: with many mortgages guaranteed by Fannie Mae and Freddie Mac (i.e., the taxpayers).

These two entities are the babies of the Democratic Party.  This crash started building under the policies of Democratic party and their leaders as far back as FDR.  FDR's ill advised meddling in the housing markets lead to the creation of Fannie Mae.  This meddling upset real market forces by taking a large amount of responsibility away from the financial institutions involved. In 1968 LBJ decided making Fannie and Freddie publicly traded commodities; making it a cash cow  In 1999 President Clinton changed the banking laws (Gramm–Leach–Bliley Act), allowing the financial institutions to engage in very risky investing.  Finally, throughout the George W. Bush administration, who repeatedly warned of such a failure and was blocked by Democrats in both houses of Congress; Democrats who pressured banks to make mortgages with little or no credit checks and promoted sub-prime loans. In 2007, the Fed started raising interest rates, Payments doubled and tripled, payments were missed, and the house of cards came down.

3.  It was not Bush policies, Bush tax cuts or the capitalist system that failed.  It was Democratic Party’s sacred cows that caused the mortgage meltdown and subsequent recession.  This president, Barack Obama, is employing the same FDR inspired policies and he will extend the high unemployment and weak economy for a decade or more.

Again, someone has to be out there setting the record straight.

Thank you for your attention to this matter.  I will be looking for your response and will post both on my blog, Move It Right.

Sincerely Yours

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