Subprime Disaster's High-Value Targets: The Deck

Card twelve.

This is our final card. While Obama may not have the same high visibility direct links that others in the deck have, like Franklin Raines and James Johnson, Chris Dodd and Barney Frank, the breadth of Obama's presence in the varying aspects of the subprime meltdown is disasterously impressive.

Let's return to Stanley Kurtz's NY Post article for his ties to ACORN.

WHAT exactly does a "community organizer" do? Barack Obama's rise has left many Americans asking themselves that question. Here's a big part of the answer: Community organizers intimidate banks into making high-risk loans to customers with poor credit. ...

IN short, to understand the roots of the subprime-mort gage crisis, look to ACORN's Madeline Talbott. And to see how Talbott was able to work her mischief, look to Barack Obama.

Then you'll truly know what community organizers do.

We'll again admonish anyone who hasn't already read the meat of that article to do so.

For another close link between Obama and subprime lending, how about his national campaign finance chair, Penny Pritzker:

White House hopeful Barack Obama talks a lot on the campaign trail about how failing banks have used subprime loans to victimize customers.

"Part of the reason we got a current mortgage crisis has to do with the fact that people got suckered in to loans that they could not pay," he told a crowd in Reading, Pa., last week. "There were a lot of predatory loans that were given out, a lot of teaser rates. Banks and financial institutions making these loans were making money hand over fist."

One of the banks that went under after making a lot of subprime loans -- leaving 1,400 of its customers without part of their savings -- was Chicago's Superior Bank.

At the helm of Superior Bank at least some of the time was Obama's national finance chairwoman, Penny Pritzker, an heiress to the Pritzker fortune.

And if that's not enough, let's judge Obama on his judgement in selecting former CEO of Fannie Mae, James Johnson, to head his VP selection committee.

And finally, let's note that Fannie Mae and Freddie Mac, the epicenter of the subprime disaster, found in Barack Obama a politician worth spending lots of money on. Obama has received over $126,000 from Fannie and Freddie in his not quite four years in the US Senate. To put that into perspective, only Senator Chris Dodd has received more money from Fannie and Freddie than Obama among congressmen -- and the money Dodd has received has come over a period from 1989 to today.

Barack Obama and the subprime disaster? His fingerprints are everywhere.

PREVIOUSLY:
Card one: Ace of Clubs, Christopher Dodd
Card two: King of Clubs, Charles Schumer
Card three: Queen of Clubs, Jamie Gorelick
Card four: Jack of Clubs, Kent Conrad
Card five: Queen of Hearts, Madeline Talbott
Card six: Jack of Hearts, Gregory Meeks
Card seven: King of Hearts, James Johnson
Card eight: Queen of Diamonds, Maxine Waters
Card nine: King of Spades, Harry Reid
Card ten: Ace of Diamonds, Barney Frank
Card eleven: King of Diamonds, Franklin Raines

Subprime Disaster's High-Value Targets: The Deck

Card eleven.

Hot Air on Raines...

PREVIOUSLY:
Card one: Ace of Clubs, Christopher Dodd
Card two: King of Clubs, Charles Schumer
Card three: Queen of Clubs, Jamie Gorelick
Card four: Jack of Clubs, Kent Conrad
Card five: Queen of Hearts, Madeline Talbott
Card six: Jack of Hearts, Gregory Meeks
Card seven: King of Hearts, James Johnson
Card eight: Queen of Diamonds, Maxine Waters
Card nine: King of Spades, Harry Reid
Card ten: Ace of Diamonds, Barney Frank

Subprime Disaster's High-Value Targets: The Deck

Card ten.

Ace asked for it:

He's holding out on Frank because it's such a sweet card, but I think he should post it tonight.

OK, so here you go, our attempt to flatter Barney Frank because he's gay.

And sweet? Hey, Ace said it, not me.

Go see the Ace post for the rest of the details. Go to Hot Air for the Frank video.

PREVIOUSLY:
Card one: Ace of Clubs, Christopher Dodd
Card two: King of Clubs, Charles Schumer
Card three: Queen of Clubs, Jamie Gorelick
Card four: Jack of Clubs, Kent Conrad
Card five: Queen of Hearts, Madeline Talbott
Card six: Jack of Hearts, Gregory Meeks
Card seven: King of Hearts, James Johnson
Card eight: Queen of Diamonds, Maxine Waters
Card nine: King of Spades, Harry Reid

Subprime Disaster's High-Value Targets: The Deck

Card Nine.

Harry Reid, as usual, was a little slow out of the blocks in the execution of the Democrats' role in the subprime mess. So he decided to chip in late in the game with his effort to tank beleagured insurance stocks by predicting a big name was going to fail. Unlike Charles Schumer, he didn't name the name -- but he made sure to state that he knew the name, and that we all did too.

Together, of course, they are the Reid-Schumer Cabal.

PREVIOUSLY:
Card one: Ace of Clubs, Christopher Dodd
Card two: King of Clubs, Charles Schumer
Card three: Queen of Clubs, Jamie Gorelick
Card four: Jack of Clubs, Kent Conrad
Card five: Queen of Hearts, Madeline Talbott
Card six: Jack of Hearts, Gregory Meeks
Card seven: King of Hearts, James Johnson
Card eight: Queen of Diamonds, Maxine Waters

Subprime Disaster's High-Value Targets: The Deck

Card eight.

PREVIOUSLY:

Card one: Ace of Clubs, Christopher Dodd
Card two: King of Clubs, Charles Schumer
Card three: Queen of Clubs, Jamie Gorelick
Card four: Jack of Clubs, Kent Conrad
Card five: Queen of Hearts, Madeline Talbott
Card six: Jack of Hearts, Gregory Meeks
Card seven: King of Hearts, James Johnson

Subprime Disaster's High-Value Targets: The Deck

Card seven.

PREVIOUSLY:
Card one: Ace of Clubs, Christopher Dodd
Card two: King of Clubs, Charles Schumer
Card three: Queen of Clubs, Jamie Gorelick
Card four: Jack of Clubs, Kent Conrad
Card five: Queen of Hearts, Madeline Talbott
Card six: Jack of Hearts, Gregory Meeks

Subprime Disaster's High-Value Targets: The Deck

Card six.

PREVIOUSLY:
Card one: Ace of Clubs, Christopher Dodd
Card two: King of Clubs, Charles Schumer
Card three: Queen of Clubs, Jamie Gorelick
Card four: Jack of Clubs, Kent Conrad
Card five: Queen of Hearts, Madeline Talbott

Subprime Disaster's High-Value Targets: The Deck

Card five.

Madeline Talbott may be the least known person in the deck. So let's get a fairly extensive quote from this Stanley Kurtz article in the NY Post, though you must read the whole thing:

WHAT exactly does a "community organizer" do? Barack Obama's rise has left many Americans asking themselves that question. Here's a big part of the answer: Community organizers intimidate banks into making high-risk loans to customers with poor credit.

In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes - and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers.

In other words, community organizers help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it. ...

ONE key pioneer of ACORN's subprime-loan shakedown racket was Madeline Talbott - an activist with extensive ties to Barack Obama. She was also in on the ground floor of the disastrous turn in Fannie Mae's mortgage policies.

Long the director of Chicago ACORN, Talbott is a specialist in "direct action" - organizers' term for their militant tactics of intimidation and disruption. Perhaps her most famous stunt was leading a group of ACORN protesters breaking into a meeting of the Chicago City Council to push for a "living wage" law, shouting in defiance as she was arrested for mob action and disorderly conduct. But her real legacy may be her drive to push banks into making risky mortgage loans. ...

IT would be tough to find an "on the ground" community organizer more closely tied to the subprime-mortgage fiasco than Madeline Talbott. And no one has been more supportive of Madeline Talbott than Barack Obama. ...

IN short, to understand the roots of the subprime mortgage crisis, look to ACORN's Madeline Talbott. And to see how Talbott was able to work her mischief, look to Barack Obama.

Then you'll truly know what community organizers do.

PREVIOUSLY:

Card one: Ace of Clubs, Christopher Dodd
Card two: King of Clubs, Charles Schumer
Card three: Queen of Clubs, Jamie Gorelick
Card four: Jack of Clubs, Kent Conrad

Subprime Disaster's High-Value Targets: The Deck

Card four.

Countrywide was at the center of the subprime meltdown. And Senator Conrad was at the center of enabling them in that role.

Conde Nast ran an investigation of Countrywide "Friends of Angelo" loans, and of Senator Conrad (and Dodd) they concluded:

Perhaps countrywide’s most troubling V.I.P. loans went to Democratic Senators Dodd and Conrad. As chairman of the Senate Banking Committee, Dodd is at the forefront of efforts to remedy the housing crisis. In May, he introduced a foreclosure-rescue bill that would extend up to $300 billion in government-backed loans to struggling borrowers if lenders forgave a portion of their debt. Conrad chairs the taxation subcommittee of the Senate Finance Committee, which often considers proposals affecting Countrywide, such as tax credits for first-time or low-income homebuyers.

They also gave some of the details:

Senator Conrad borrowed $1.07 million in 2004 to refinance his vacation home with a balcony and large porch in Bethany Beach, Delaware, a block from the ocean. Mozilo instructed a subordinate to “take off 1 point,” or $10,700, according to a March 17, 2004, email.Later that year, Conrad refinanced an eight-unit apartment building that he and his brothers owned in Bismarck, North Dakota. According to the former employee, the loan violated Countrywide’s normal policy of providing loans for buildings of four units or fewer. In an April 23, 2004, email, Mozilo encouraged an employee to “make an exception due to the fact that the borrower is a senator.”

The Wall Street Journal article linked above makes it clear that Conrad personally asked Mozilo for the sweetheart deal over the phone:

Take Senator Kent Conrad, the North Dakota Democrat whose office issued a Friday statement saying that "I never met Angelo Mozilo." What he did not say then but admitted under later questioning by a Journal reporter is that, although he may not have had a face-to-face meeting with the Countrywide CEO, Mr. Conrad had called Mr. Mozilo and asked for a loan. The result was a discounted loan on his million-dollar beach house and a separate commercial loan of a type that residential lender Countrywide did not even offer to other customers, regardless of the rate.

Finally, as only he can, Ed Morrissey sums it up this way:

For those who wonder how Countrywide got away with its mismanagement and its bad lending practices to the point of collapse, all we can say is that they had Friends in high places — or in low places, depending on how you look at it. The most ethical Congress ever put the foxes in charge of the henhouse, and it’s the homeowners who will suffer the consequences.

Thanks, Senator.

PREVIOUSLY:

Card one: Ace of Clubs, Christopher Dodd
Card two: King of Clubs, Charles Schumer
Card three: Queen of Clubs, Jamie Gorelick

Subprime Disaster's High-Value Targets: The Deck

Card three.

(source for quotes one and two)

Jamie Gorelick is tied to the subprime meltdown because of her executive role at Fannie Mae, especially given her specific responsibilities. And beyond the personal enrichment that Gorelick enjoyed as a result, the presence of high powered Democratic appointees to Fannie Mae's board was used to help fend off efforts at oversight that could have earlier detected the problems at the company. Gorelick was one of many (and yes, we will get to them as well), but she was one of high visibility and stature.

ALSO: Gorelick's role at Fannie is certainly not the only source of her infamy. Jim Lindgren notes:

This is the same Jamie Gorelick who was Deputy Attorney General in the mid 1990s and was reported to have been the author of the Clinton Administration’s WALL against sharing intelligence data between foreign and domestic agencies. Without the policies instituted by Gorelick still in place in 2001, officials might have learned more about the 9/11 attacks before the planes hit the buildings.

PREVIOUSLY:

Card one: Ace of Clubs, Christopher Dodd

Card two: King of Clubs, Charles Schumer

Subprime Disaster's High-Value Targets: The Deck

Card two.

Tomorrow's card, today. But remember, keep up with the deck at Ace's.

MORE: Let's go ahead and link a story about the Schumer IndyMac fiasco for background.

And this:

John D. Hawke, the U.S. comptroller of the currency (regulator of national banks) from 1998 to 2004, had more pointed words for Schumer in a story in the American Banker newspaper today.
"If Schumer continues to go public with letters raising questions about the condition of individual institutions, he will cause havoc in the banking system," Hawke said.

"Leaking his IndyMac letter to the press was reckless and grossly irresponsible. I don't see how he can be trusted with confidential information in the future. What this incredibly stupid conduct does is put at risk the willingness of regulators to share any information with the [congressional] oversight committees. After this, you'd be crazy to share information with Schumer."

Subprime Disaster's High-Value Targets: The Deck

Card one.

Thanks to Ace of Spades for the link.

Are you looking for tomorrow's card today?

It's coming.

MORE: Some more on Dodd? OK, how about this:

As recently as last summer, when housing prices had clearly peaked and the mortgage market had started to seize up, Dodd called on Bush to "immediately reconsider his ill-advised" reform proposals. Frank, now chairman of the House Financial Services Committee, said that the president's suggestion for a strong, independent regulator of Fannie and Freddie was "inane."

No. No need for a strong, independent regulator. Not when Fannie and Freddie are "fundamentally strong", as Dodd was saying just this past July:

WASHINGTON (MarketWatch) -- Embattled mortgage finance giants Fannie Mae and Freddie Mac are "fundamentally strong" and questions about their capital are unwarranted, a top U.S. Senate Democrat said Friday afternoon.

"This is not a time to be panicking about this. These are viable, strong institutions," Sen. Christopher Dodd, D-Conn., said at a Capitol Hill press conference.

The comments came as the two government-sponsored enterprises continued to be the focus of growing fears they could be insolvent or could face a capital crunch. ...

"The economics are fine in these institutions and people need to know that," Dodd said. There's no reason "to talk about failure," he added.

Parking the Free Market

We have studiously avoided much comment on the economic crisis on the principle of Proverbs 17:28, “Even a fool is thought wise if he keeps silent, and discerning if he holds his tongue.”

Well. Perhaps closer to the truth is the popular saying, “Better to remain silent and be thought a fool, than to speak and remove all doubt”.

So. A quote and a picture is about all we are going to offer, in an attempt to preserve whatever doubt you may still harbor regarding our foolishness.

From the Wall Street Journal:

The government's rescue plan moved into a new phase Monday night with the announcement that Treasury is injecting $125 billion into the country's nine largest banks. This amount -- as much as $25 billion each for the biggest -- seems to have stopped the financial panic for now by easing fears of insolvency. Another $125 billion is on the table for other banks that need capital on the same terms offered to the big boys.

The good news here is that Treasury Secretary Hank Paulson has at last moved from promises to action, and credit markets have responded positively. But this is also a very dangerous moment. The government has taken ownership stakes in the largest banks in the land. This extraordinary intervention is perilous -- not least to the banks themselves -- unless it is limited in scope and time. Mr. Paulson called the capital injection "distasteful" but unavoidable, and we can't disagree. The trick is to ensure that neither he nor his successors develop a taste for politically directed credit. ...

For those of us who believe in free markets, these interventions are unpleasant. These drastic steps might have been avoided had Treasury and the FDIC acted sooner, yet now they are necessary given the panic that threatens the larger economy. The goal should be to rebuild the financial system so Americans can once again trust their banks enough that government can then recede to its normal supervisory role. We are under no illusions that government will cede its new powers easily, but if it doesn't the economic damage will be far greater than anything we've seen so far.

The intervention is distasteful but unavoidable (Paulson); unpleasant but necessary (the Wall Street Journal).

Perhaps this photo, of a sign on our commute, is illustrative of where we are:

Free Market Parking Ahead

We certainly are in no position to argue against the necessity of the actions being taken. But we will register our worry now – that we are setting into motion the Principle of Government Intervention Inertia: government intervention once set into motion tends to stay in motion and limited government involvement once parked tends to stay parked.

Because asking the federal government to give away power it has gained – no matter how temporary it was supposed to have gained it – is like trying to stop the earth from rotating.

OK, now back to the wisdom of Proverbs...or rather, to observe the wisdom of Ecclesiastes 6:11, "The more the words, the less the meaning, and how does that profit anyone?"