NOVATOWNHALL

Three weeks ago the mortgage securities scandal was not even on the radar of popular culture. Now, it is issue number one and Congress is poised to pass quick legislation to address it. That fact right there should give everyone reason for pause.

By way of comparison, our energy crisis has been brewing in the open for decades, and even seven years after 9-11 Congress is still stalemated: We have no nuclear plants being built, no new oil refineries, no new areas opened for drilling, no new shale oil operations.

When Congress is poised to act quickly, to paraphrase the old maxim, we should all reach for our guns. What sort of lunacy might our federal government be about to introduce?

Case in point: Barney Frank is currently one of the leading legislative figures in the debate. In a sane world, Barney Frank would be sitting in the corner with a dunce cap on his head.

[via The Jawa Report]

Key quote by Barney Frank defending government sponsored entities such as Fannie Mae and Freddie Mac:

The more people in my judgment exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the treasury - which I do not see, I think we see entities that are fundamentally sound financially, and withstand some of the disaster scenarios, and even if there were a problem the federal government doesn’t bail them out - but the more pressure there is there, then the less I think we see in terms of affordable housing.

So the priority has been, above all else, affordable housing. Think about that. Then think of the zeros involved.

Events are progressing so quickly in Washington, D.C. right now that there has been no opportunity to explain the current financial crisis in context. Legislation that has not even been thought through is on the verge of being passed.

Yes, something needs to be done quickly - I understand that. Banks are going to fail. Bad, bad thing.

But here’s where the zeros come in: The basic fact that a movement which began in the 1990s to provide home loans to people who should not have received those loans was suicidal for our economy is being glossed over. When you’re dishing out $200,000+ loans to millions and millions of people who did not qualify for those loans, you are creating a liability figure with a LOT of zeros.

And now that exposure is being offloaded to American taxpayers. The dream of affordable housing has been revealed as taxpayers footing the bill for everyone in the U.S. who could not afford a house.

Maybe a bailout has to happen to secure our economy: I don’t have the expertise to know if that is the only solution. But as the details of the bailout are being debated and incorporated into the pending legislation, we need to keep in mind that at the root of the crisis are loans to a great many people who should not have gotten them, morons in the financial services industry who treated those loans as assets, and government officials who nurtured the hari-kiri economics. It needs to be reported far and wide that that’s why we are in this mess.

If we are about to pass new laws that will fundamentally change the U.S. economy for years to come, we need to be sure the American taxpayers who have played by the rules do not end up footing the bill for those who were chasing ghosts.

And let’s also be sure everyone knows the ghost-chasers, those who made this all happen, include the same Democrats who are now attempting to steer the hastily-crafted legislation.

UPDATE: Check below the fold for informative comment by Blog Fu.

From Greg L.

How else can you possibly secure the “right to housing” that the far-left keeps telling us is sacrosanct, without having the taxpayer fund this?

http://www.hrea.org/index.php?base_id=149

When you reclassify entitlements as “rights”, you can only do so if funding can be allocated in order to provide these entitlements. Congress balked at the idea of funding the purchase of a home for everyone who could not afford one, so they did the end-around of the Community Reinvestment Act that forced lenders to provide mortgages to those who couldn’t afford them. When these loans failed, the taxpayer picks up the pieces. It’s a somewhat bass-ackwards means of creating housing as an entitlement program, but it largely works.

For an added bonus, a rather shocking percentage of these failed loans involve illegal aliens. Amnesty might have been out of reach, but housing programs that the taxpayer ultimately would fund certainly wasn’t. Jose, we can’t give you amnesty, but we can give you a mortgage that you won’t have to pay for so you can have your own boarding house.

If we’re going to give billions of dollars to Wall street, it should only be under the condition that the Community Reinvestment Act is repealed, and the bailout costs are offset by shutting down the Department of Housing and Urban Development.