The mainstream media is parroting the line that "there's plenty of blame to go around" for the recent mortgage and financial crisis. If you're at all familiar with the slant of the mainstream media, you'll immediately see this as an indicator that the Democrats may be primarily to blame. So, I set out to find the answer to the question who's to blame and this is what I found:

Jimmy Carter - 1977:
In 1977, Democratic President Jimmy Carter was in the White House and Democrats controlled both houses of Congress. They passed and signed into law the Community Reinvestment Act ("CRA"), which was designed to prohibit lenders from "redlining" unprofitable neighborhoods. The term "redlining" was coined in the late 1960s by community activists in Chicago. It describes the practice of marking a red line on a map to delineate the area where banks would not invest.

While redlining was real, it's origin had nothing to do with race, discrimination or anything malevolent or improper. It was solely about profitability. Banks weren't lending to people in certain locations because doing so was not profitable. If this weren't true, a company could easily come in, or start up, and open up branches in redlined neighborhoods and have a monopoly on the amazingly profitable business that was being ignored by the big bad old-time lenders. However, no such business came in, or started up, simply because there was no money, or insufficient money, to be made in such locations.

What could an innocent little law from 1977 possibly have to do with the mortgage and financial crisis of 2008? Actually, not too much. The lenders were able to either squeak out a little profit from the poor neighborhoods, break even or absorb their losses during the economic boom years brought about by Reagonomics in the '80s and the internet boom of the '90s. But, the CRA was a foot-in-the-door. After all, you don't boil a frog by throwing him in boiling water, you put him in room temperature water and slowly turn up the heat. You don't take more than half a man's earnings when you first pass an income tax, you just take a percent or two. You don't get paid family leave on the first try, you have to lie and tell the voters that small businesses won't be shackled with paying workers for 3 months of paid leave every year. Then, once everyone is used to unpaid leave, tell everyone how unfair it is that only the rich can afford to take family medical leave and that out of "fairness" we have to force businesses to pay people to sit at home and not work. Same thing with the CRA, it wasn't the worst piece of needless economic legislation the Democrats had ever hobbled the American people with but, rather, simply a foundation on which bad policy could be built.

Bill Clinton - 1993:
In 1993, Democratic President Clinton was in the White House and Democrats controlled both houses of Congress. President Clinton initiated revisions to the CRA and regulatory scheme which substantially increased the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. The revisions also allowed, for the first time, the securitization of CRA loans containing subprime mortgages. The first company to pool and repackage the loans into securities was the now defunct Bear Sterns.

White House Press Briefing by Clinton Administration Robert Ruin, Assistant to the President for Economic Policy, December 8, 1993:

"In July the President asked the four banking regulators to reform CRA, to reduce paperwork in process and reward performance, and to get that done by January 1, 1994. We're delighted to report that that has been accomplished on schedule. And in conjunction with the President's Community Development Bank and financial institution legislation, which recently passed the House of Representatives, CRA reform will generate billions of dollars in new lending and extend basic banking services to the inner cities and to distressed rural communities around the country."

Clinton's strengthening of the CRA required lenders to find ways to provide mortgages to their poorer communities by loosening their underwriting standards. In other words, the banks had to make bad loans...officially called "sub-prime loans." So how do you give loans to people who simply don't qualify? Pursuant to the CRA, you get rid of objective color-blind criteria like the size of the mortgage payment relative to income, credit history, savings history and income verification. Instead, things like participation in a "credit-counseling" programs should be taken as evidence of an applicant's ability to manage debt. More on these bogus "credit-counseling" programs below.

George Bush - 2003:
In 2003, President George Bush tried to pass what the liberal New York Times described as, "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago":

"The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios."

"The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates."

"The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session."

So, we have President Carter laying the foundation for disaster with Bill Clinton worsening the situation beyond which even the greatest economic engine in the world can sustain, all with the help of clueless and/or corrupt Democrats along the way. Finally, the supposedly "stupid" President George Bush attempts to bring a solution to what he knew was a major problem, but the Democrats blocked him.

Follow the Money...to the Democrats:
The New York Times also said there was a "lobbying battle" over Bush's proposal to reign in Fannie Mae and Freddie Mac...so, lets follow the money! Over the last ten years, from 1989 to 2008, the top three recipients of Fannie Mae and Freddie Mac campaign contributions are...drum roll please: (1) Democratic Senator Christopher Dodd and Chairman of the Senate Banking Committee, (3) Democrat Senator John Kerry. What about number 2 you ask? I think someone stepped in number two because, in less than four years in office, a certain inexperienced, junior Senator from Illinois somehow managed to rise to the number (2) spot in most campaign contributions received from the, now under Federal conservatorship, Fannie Mae and Freddie Mac: Democratic Senator Barack Obama. Change!

Barack Obama - $$$:
Now, why would these lending institutions spend such a disproportionate amount of money on a baby Senator? Because they knew it was money well spent and it all goes back to Obama's days as a community rabble-rouser, I mean, "organizer." The original lobbyists for passage of the CRA were hardcore leftists who supported the Carter administration and were often rewarded for their support with government grants and programs like the CRA that they personally benefited from. These included various "community organizations" such as "ACORN" (Association of Community Organizations for Reform Now). As mentioned above, it is groups like ACORN which, for a handsome fee, provide the bogus "credit-counseling" to poor borrowers to qualify for loans instead of actually having a way of paying back the loan.

Neighborhood organizations, like ACORN, also benefit themselves from the CRA through a process of legalized extortion. The CRA is enforced by four different federal government bureaucracies: the Federal Reserve, the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation. The law is set up so that any new branch creation, branch expansion or bank merger can be postponed or prohibited by any of these four bureaucracies if a CRA "protest" is issued by a community organization. The delays and expenses associated with such a protest can cost banks huge sums of money, and the community organization not only understand this perfectly well, but count on it. The community organizations use the threat of protests to get the banks to give them millions of dollars in "donations" (read that as bribes) as well as promising to make a certain amount of bad loans in their communities. With his history as a "community organizer," the lobbyists for Fannie Mae and Freddie Mac knew Senator Obama was a good buy for their money.

Christopher Dodd - Friend of Corruption:
In 2003 Senator Dodd refinanced the mortgages on his homes in Washington D.C. and Connecticut through Countrywide Financial with below-market rates because he was part of Countrywide's VIP program known as "Friend of Angelo" - Angelo being Countrywide CEO Angelo Mozilo. But, Dodd failed to disclose the preferential loans in any of his congressional financial disclosures. Completely unrealted to such preferrencial treatement, in June of 2008, Dodd introduced a bill in congress to bail out mortgage companies like Countrywide as the expense of hundreds of billions of dollars to the American taxpayers.

As recently as July of this year, Democratic Senator Christopher Dodd, the Chairman of the Senate Banking Committee, the guy who should know more than anyone how these institutions are doing...if he wasn't corrupt and/or incompetent said the following:

"To suggest somehow that [Fannie Mae and Freddie Mac] are in trouble is simply not accurate...the facts are that Fannie and Freddie are in sound situations...they have more that adequate capital."

Don't forget, as detailed above, Democratic Senator Dodd is the number one recipient of campaign contributions from Fannie Mae and Freddie Mac. I'm sure it was just a coincidence and not incompetence or corruptions that led him to believe that Fannie Mae and Freddie Mac were in sound financial condition and not in any trouble just two months ago.

Barney Frank - 2003 & 2008:
Back to President Bush's attempted reforms of 2003, Barney Frank, then ranking Democrat on the Financial Services Committee, said at the time:

"These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis...the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." New York Times - September 11, 2003

As recently as August 25, 2008, this clueless turd told Money magazine:

"Fannie and Freddie are better off than the market thinks." Money Magazine - August 25, 2008

Such sentiments were echoed in 2003 by other Democrats who blocked President Bush's attempts at reform like Representative Melvin Watt, also on the Financial Services Committee: "'I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing."

John McCain - 2005:
What about Senator John McCain? Well, in 2005, while Obama was just figuring out how to get his congressional parking sticker while taking his first bribe campaign contribution from Fannie Mae and Freddie Mac, John McCain (62 on the list of Mae/Mac recipients) was the co-sponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, which the Democrats succeeded in defeating in congress. On May 25, 2006, John McCain had this to say about the need for the legislation:

"If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole." - John McCain, 2006

And, just what would the bill co-sponsored by Senator John McCain have done? From the Congressional Research Service Summary:

"Sets forth operating, administrative, and regulatory provisions of the Agency, including provisions respecting: (1) assessment authority; (2) authority to limit nonmission-related assets; (3) minimum and critical capital levels; (4) risk-based capital test; (5) capital classifications and undercapitalized enterprises; (6) enforcement actions and penalties; (7) golden parachutes; and (8) reporting."

Liberals criticized the bill because it transferred oversight and eliminated certain minor, redundant or irrelevant reporting requirements. Their complaints ring hollow when asked how in the world Mae and Mac could have possibly been less regulated? Actually, reading the bill (63 pages and 31,000+ words in my version) reveals that it may very well have provided the necessary reforms to have, if not avoided, significantly lessened the current mortgage and financial crisis.

Sounds like Senator John McCain understood the economy and economic ramifications of uncontrolled Fannie Mae and Freddie Mac better than the Democrats ever have.

[If I have time, I'll add all the ex-Fannie Mae and Freddie Mac officials who were paid millions while they their drove their companies into the ground who are now advisers to Barack Obama's, on his vice-presidential search team and hold other close personal and professional relationships with Obama.]

[As long as this is, I've had to shorten it quite a bit and leave a lot out. There are a lot more bills, laws, corruptions and scandal involved. I've just touched on the highlights.]

[Rest assured, there is blame for heads of the companies involved in this crisis as well as the consumers (more on one or both of these in the future), but primary blame rests with legislators and regulators who created the rules by which the game was played.]