MONEY - POLITICS - REAL ESTATE

This is a bit longer than I originally intended. I get a case of circumlocution and it's hard to stop. However, this is very important as we need to know who we're dealing with.
I was so astonished. Really. The headline in a Wall Street Journal article read: GOVERNMENT-SPONSORED MELTDOWN.
I've said to my friends and on FaceBook, etc., that I'm on a GSS, or Government Sponsored Sabbatical. And since this has happened, I feel like I've been in a meltdown, so the use of the word meltdown is not too much of a stretch applied to my situation. But lo and behold, the Wall Street Journal was not writing about me, though my story is much more interesting than the one I read. I'll try to take the gist of the article and distill it into a readable expose on the government.
Ever since 2008 I've read and studied everything I can get my hands on about the financial downturn, especially as it redounds to real estate. I love investing, but I dislike the government. They ruin everything they touch. It is constantly a funny situation when I see the blame be foisted on evil "Wall Street Bankers," or even on the free-markets in general. Always the blame game, usually propagated by the very culprits who committed the crimes.
Now comes more of the same, government agencies and government people, blaming anyone and everyone but themselves for the financial castrophe they caused. I'm speaking of TARP and the Billions of Dollars the government had to rush into the "crisis du jour." Remember John McCain setting aside his campaign to return to Washington to prevent the sky from falling?
The article was written by Peter Wallison, a Senior Fellow at the American Enterprise Institute. All quotations for the balance of this article are from him, unless otherwise noted. The theme at almost all junctions is that the banks led us into this financial crisis. Even the FCIC Democratic majority sort of laid the blame at the feet of The Department of Housing and Urban Development and the GSEs (Here's a take off on the same word as in the title---Government-Sponsored Enterprises. This time a legitimate acronym), Fannie Mae and Freddie Mac.
Gretchen Morgenson, no conservative and writer for the New York Times, and Josh Rosner, wrote a withering expose on the government cause and effect of the meltdown. The book is "Reckless Endangerment." "Government housing policies, pursued and exploited brought the financial system to a halt in 2008."
The blame can even come down to one man. A man who is a  "Katrina level destructive force," who has avoided blame and having to answer for his actions. He even avoided being one of 700 people interviewed in numerous House, Senate and other investigations. His name is James A. Johnson, A Democratic operative and former aide to Walter Mondale. Need I say more? He . . . "became a chairman of Fannie Mae in 1991, they note, it became a political powerhouse, intimidating and suborning Congress and tying itself closely to the Clinton administration's support for the low-became lending program called
'affordable housing.'"
"The authors are correct. Far from being a marginal player, Fannie Mae was the source of the decline in mortgaged underwriting standards that eventually brought down the financial system. It led rather than followed Wall Street into risky lending. This history does not appear in the FCIC majority report"
In 2008 50% of these loans were sub-prime. That's 27 million loans and 12 million were held by GSEs. These loans and the supporting government requirements were on the books of these GSEs but were left out of the report.
So, now we have a new dilemma. Government, not Wall Street, is responsible for this awful mess. Explain how we have moved into the new Dodd-Frank monstrosity, the new financial regulations that will negatively effect every one of us in countless harmful ways. Yes, these two gentlemen caused the problem and then became the protectors of the government wrong doing. I'm sure as more facts and news comes to light, we will see more evidence that government is the problem, not the solution.
I don't want to write anything like this without throwing in my solutions. They are simple. Repeal Dodd-Frank. Replace it with less regulation. We do not need more government. We need more freedom and a concerned and watchful citizenry. The simple code should be: BE HONEST. I think that's too hard of concept for politicians to follow. I also wrote in the new preface and forward for "How To PIck Up Foreclosures," that the heavy restrictions on assuming loans should be repealed. Do away with the "Due on Sale Clause." The market will self-correct if government gets out of the way.
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