The Roots of Voters' Rage

Well, folks, we're almost there! By the middle of next week, the verdict will be in on the first two years of a Democrat-controlled government. The majority of political pundits are predicting an easy GOP sweep of the House and a pretty good chance of taking the Senate. Prognostications are always a reason for concern because they could cause some people to believe that it's in the bag, hence their vote won't really affect the outcome. Nevertheless, projections are that voter turnout will be at record levels. There's nothing like an economic crisis to motivate people to take part in the electoral process. People are hurting, and they are justifiably angry.

The roots of their rage are distrust of a government that failed them miserably.

While most people worked at their jobs, paid their taxes, raised their families, and obeyed the law, politicians were sowing poisonous seeds that would ultimately chip away at the country's foundation. Congressman Barney Frank of Massachusetts and his partner in crime, Connecticut Senator Chris Dodd, in their infinite liberalism, twisted arms in the financial services sector until home loans were issued that people had no chance of repaying. In true ideological fashion, those two perhaps well-intentioned but certainly not very economically astute bozos managed to muscle their hare-brained scheme into the infrastructure of the mortgage industry.

The rest is history, and most of us are paying for those costly errors. That's the danger of ideologues; they lead with their hearts instead of their heads. There's nothing wrong with being sympathetic toward the needs of our neighbors and doing everything within reason to better their circumstances. But you can't build a permanent foundation on sand, good intentions notwithstanding. In the real world, either two and two make four, or thousands of homes across the country start going into foreclosure. Perhaps Frank and Dodd saw themselves as benevolent visionaries, able to implement a system that would assure every family the realization of the American dream: a home of their own. Instead, they pushed the envelope, forcing banks to make loans they shouldn't have made. Those loans were bought by Fannie Mae and Freddy Mac, leading to the housing bubble and the collapse of Lehman Brothers and soon the entire financial network.

What should have been obvious from the beginning is that people who can't afford a mortgage at prime interest rates certainly can't afford a subprime rate. Capital markets operate on the principle of risk vs. reward. If you invest in stocks, you're taking a risk, but if you select wisely, you can expect a higher rate of return than you would on risk-free Treasury Bills, for example, which are backed by the full faith and credit of the issuing country or institution.

It's the same with loans. Less creditworthy subprime borrowers represent a riskier investment; therefore, lenders will charge them a higher interest rate than they would a prime borrower for the same loan. The reason behind the economic meltdown was that lenders were no longer allowed to use the benefit of their vast experience in the money marketplace. Instead, they were pressured to gamble with a philosophy that couldn't be backed up by common sense and basic math. Incidentally, President Obama can't be blamed for this part of the collapse, but Senator Obama definitely can. He was number two on the Fannie and Freddy list of favorite politicians in 2008, lining up at the trough for big campaign bucks. Only Senator Dodd received more than Obama, and Dodd was, not surprisingly, Chairman of the Senate Banking Committee. The corruption can't be any clearer; the hardworking, taxpaying citizens of this country have been ripped off by a bunch of greedy, acquisitive swindlers. Like the snake-oil salesmen they are, when they get caught with the money in their grubby little fists, they begin posturing with eloquent statements designed to confuse the public about their complicity in the fraud.

Is it any wonder why the Tea Party movement was able to grow so quickly? In February 2009, when Rick Santelli began waxing indignant on CNBC from the floor of the Chicago Mercantile Exchange, it was the rant heard around the world and one of the stimulants that led to a massive outburst of anger from Americans, tired of having their pockets picked by the den of thieves in D.C. Santelli declared on national television, "This is America! How many of you people want to pay for your neighbors' mortgage that has an extra bathroom and they can't pay their bills? The government is promoting bad behavior!" Perhaps, on November 2, we can create a new paradigm and begin promoting good behavior. God help us if we don't.

Bob Weir is a former detective sergeant in the New York City Police Department. He is the executive editor of The News Connection in Highland Village, Texas. E-mail Bob. 
Well, folks, we're almost there! By the middle of next week, the verdict will be in on the first two years of a Democrat-controlled government. The majority of political pundits are predicting an easy GOP sweep of the House and a pretty good chance of taking the Senate. Prognostications are always a reason for concern because they could cause some people to believe that it's in the bag, hence their vote won't really affect the outcome. Nevertheless, projections are that voter turnout will be at record levels. There's nothing like an economic crisis to motivate people to take part in the electoral process. People are hurting, and they are justifiably angry.

The roots of their rage are distrust of a government that failed them miserably.

While most people worked at their jobs, paid their taxes, raised their families, and obeyed the law, politicians were sowing poisonous seeds that would ultimately chip away at the country's foundation. Congressman Barney Frank of Massachusetts and his partner in crime, Connecticut Senator Chris Dodd, in their infinite liberalism, twisted arms in the financial services sector until home loans were issued that people had no chance of repaying. In true ideological fashion, those two perhaps well-intentioned but certainly not very economically astute bozos managed to muscle their hare-brained scheme into the infrastructure of the mortgage industry.

The rest is history, and most of us are paying for those costly errors. That's the danger of ideologues; they lead with their hearts instead of their heads. There's nothing wrong with being sympathetic toward the needs of our neighbors and doing everything within reason to better their circumstances. But you can't build a permanent foundation on sand, good intentions notwithstanding. In the real world, either two and two make four, or thousands of homes across the country start going into foreclosure. Perhaps Frank and Dodd saw themselves as benevolent visionaries, able to implement a system that would assure every family the realization of the American dream: a home of their own. Instead, they pushed the envelope, forcing banks to make loans they shouldn't have made. Those loans were bought by Fannie Mae and Freddy Mac, leading to the housing bubble and the collapse of Lehman Brothers and soon the entire financial network.

What should have been obvious from the beginning is that people who can't afford a mortgage at prime interest rates certainly can't afford a subprime rate. Capital markets operate on the principle of risk vs. reward. If you invest in stocks, you're taking a risk, but if you select wisely, you can expect a higher rate of return than you would on risk-free Treasury Bills, for example, which are backed by the full faith and credit of the issuing country or institution.

It's the same with loans. Less creditworthy subprime borrowers represent a riskier investment; therefore, lenders will charge them a higher interest rate than they would a prime borrower for the same loan. The reason behind the economic meltdown was that lenders were no longer allowed to use the benefit of their vast experience in the money marketplace. Instead, they were pressured to gamble with a philosophy that couldn't be backed up by common sense and basic math. Incidentally, President Obama can't be blamed for this part of the collapse, but Senator Obama definitely can. He was number two on the Fannie and Freddy list of favorite politicians in 2008, lining up at the trough for big campaign bucks. Only Senator Dodd received more than Obama, and Dodd was, not surprisingly, Chairman of the Senate Banking Committee. The corruption can't be any clearer; the hardworking, taxpaying citizens of this country have been ripped off by a bunch of greedy, acquisitive swindlers. Like the snake-oil salesmen they are, when they get caught with the money in their grubby little fists, they begin posturing with eloquent statements designed to confuse the public about their complicity in the fraud.

Is it any wonder why the Tea Party movement was able to grow so quickly? In February 2009, when Rick Santelli began waxing indignant on CNBC from the floor of the Chicago Mercantile Exchange, it was the rant heard around the world and one of the stimulants that led to a massive outburst of anger from Americans, tired of having their pockets picked by the den of thieves in D.C. Santelli declared on national television, "This is America! How many of you people want to pay for your neighbors' mortgage that has an extra bathroom and they can't pay their bills? The government is promoting bad behavior!" Perhaps, on November 2, we can create a new paradigm and begin promoting good behavior. God help us if we don't.

Bob Weir is a former detective sergeant in the New York City Police Department. He is the executive editor of The News Connection in Highland Village, Texas. E-mail Bob.