Sunday, February 08, 2009

Who Built the Financial Mess

The people that built it are the people now in charge.

Profile In Incompetence

Jimmy Carter became our 39th president at the young age
of 52. He was a one-term governor from Plains, GA, where he
managed the family peanut farm and taught Sunday school. He
was also a graduate of the Naval Academy and served seven
years in the Navy, leaving as a lieutenant.

He came to power in the aftermath of the Vietnam War and
the resignation of President Nixon. The public wanted change
and someone new, and Carter was an ambitious, hands-on
politician who promised better days. As good as his
intentions were, however, the things he tried were not
successful. In fact, he created far more serious problems
than he ever solved.

The centerpiece of Carter's foreign policy was human
rights, and he did achieve one noble success - a peace
treaty between Egypt 's Anwar Sadat and Israel 's
Menachem Begin.

Unfortunately, that later led to Sadat's assassination
at the hands of Muslim radicals.

Many people felt Carter was a good man who worked hard
and meant well. But he was naive and incompetent in handling
the enormous burdens and complex challenges of being

He wrongly believed Americans had an 'inordinate fear
of communism', so he lifted travel bans to Cuba, North
Vietnam and Cambodia and pardoned draft evaders. He also
stopped B-1 bomber production and gave away our
strategically located Panamá Canal .

His most damaging miscalculation was the withdrawal of
U.S. support for the Shah of Iran , a strong and longtime
military ally. Carter objected to the Shah's alleged
mistreatment of imprisoned Soviet spies who were working to
overthrow Iran 's government. He thought the exiled
Ayatollah Khomeini, being a religious man, would make a
fairer leader.

Having lost U.S. support, the Shah was overthrown, the
Ayatollah returned, Iran was declared an Islamic nation and
Palestinian hit men were hired to eliminate opposition.

The Ayatollah then introduced the idea of suicide bombers
to the Palestine Liberation Organization, paying $35,000 to
PLO families whose young people were brainwashed to kill as
many Israelis as possible by blowing themselves up in
crowded shopping areas. Next, the Ayatollah used Iran 's
oil wealth to create, train and finance a new terrorist
organization, Hezbollah, which later would attack Israel in

In November 1979, Mahmoud Ahmadinejad and other Iranians
stormed the U.S. embassy in Tehran and took 52 Americans
hostage for 444 days. Not until six months into the ordeal
did Carter attempt a rescue. But the mission, using just six
Navy helicopters, was poorly executed. Three of the copters
were disabled or lost in sandstorms. (Pilots weren't
allowed to meet with weather forecasters because someone in
authority worried about security.) Five airmen and three
Marines lost their lives.

So, due to overconfidence, inexperience and poor
judgment, Carter undermined and lost a strong ally, Iran,
that today aggressively threatens the U.S., Israel and the
rest of the world with nuclear weapons.

But that's not all. After Carter met for the first
time with Soviet leader Leonid Brezhnev, the USSR promptly
invaded Afghanistan. Carter, ever the naive appeaser, was
shocked. 'I can't believe the Russians lied to
me,' he said.

The invasion attracted a 23-year-old Saudi named Osama
bin Laden to Afghanistan to recruit Muslim fighters and
raise money for an anti-Soviet jihad. Part of that group
eventually became al-Qaida, a terrorist organization that
would declare war on America several times between 1996 and
1998 before attacking us on 9/11, killing more Americans
than the Japanese attack on Pearl Harbor .

On Carter's watch, the Soviet Union went on an
unrestrained rampage in which it took over not only
Afghanistan, but also Ethiopia, South Yemen, Angola,
Cambodia, Mozambique, Grenada and Nicaragua. In spite of
this, Carter's last defense budget proposed spending 45%
below pre-Vietnam levels for fighter aircraft, 75% for
ships, 83% for attack submarines and 90% for helicopters.

Years later, as a civilian, Carter negotiated a peace
agreement with North Korea to keep that communist country
from developing nuclear weapons. He also convinced President
Clinton and Secretary of State Madeleine Albright to go
along with it. But the signed piece of paper proved
worthless. The North Koreans deceived Carter and instead
used our money, incentives and technical equipment to build
nuclear weapons and pose the threat we face today.

Thus did Carter unwittingly become our Neville
Chamberlain, creating with his well-intended but inept,
unrealistic and gullible actions the very conditions that
led to the three most dangerous security threats we face
today: Iran, al- Qaida and North Korea .

On the domestic side, Carter gave us inflation of 15%,
the highest in 34 years; interest rates of 21%, the highest
in 115 years; and a severe energy crisis with lines around
the block at gas stations nationwide.

In 1977, Carter, along with a Democrat Congress, created
a worthy project with noble intentions-the Community
Reinvestment Act . Over strong industry objections, it
mandated that all banks meet the credit needs of their
entire communities.

In 1995, President Clinton imposed even stronger
regulations and performance tests that coerced banks to
substantially increase loans to low-income, poverty-area
borrowers or face fines or possible restrictions on
expansion. These revisions allowed for securitization of CRA
loans containing subprime mortgages.
By 1997, good loans were bundled with poor ones and sold
as prime packages to institutions here and abroad. That
shifted risk from the loan originators, freeing banks to
begin pyramiding and make more of these profitable subprime

Under two young, well-intended presidents, therefore,
big-government plans and mandates played a significant role
in the current subprime mortgage mess and its catastrophic
consequences for the U.S. and international economies.

Hardest-hit by the mortgage foreclosures have been the
citizens that Democrats always claim to help
most-inner-city residents who fell victim to low or no
down payment schemes, unexpected adjustable rates, deceptive
loan applications and commission-hungry salespeople.

Now we're having to bail out at huge cost Fannie Mae
and Freddie Mac, the very agencies that were supposed to
stabilize the system. In time, this should improve the
situation. But the party of Carter and Clinton that midwifed
our mortgage mess now wants to be trusted to take over and
have the government run our entire system of health care!

Don't forget his "incompetent" interventions
in the elections of Nicaragua (Daniel Ortega), the elections
of Venezuela (Hugo Chavez) and his "stupid"
decisions with Cuba (Fidel Castro).

This should shed some light on where the blame should go
for our current problems .
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