So, who's to blame for the current mortgage mess?  If you believe the current media narrative, capitalism itself is to blame.  Not content to blame just the GOP or Bush, Democrats are going after the big prize - the conservative ideology that advocates free markets.

Progressive socialists like Barack Obama and Bernie Sanders are absolutely giddy about this crisis.  This affords them the perfect opportunity to shove the word FAILURE in the face of any conservative that ever advocated for de-regulation, including John McCain.

Here's Obama declaring this mess is the "Final Verdict" free markets failed:

Just a month ago, Democrats were worried that American voters might be souring on their Progressive/socialist agenda like the French and Germans did when they recently elected pro-U.S., pro-market leaders like Sarkozy and Merkel, respectively.  U.S. voters were beginning to blame Democrats for the struggling economy when they saw Democrats clinging to their extreme environmentalism and denying even a vote on lifting the ban on offshore drilling.

This anti-democratic posture by Democrats helped the GOP blame Democrats for the bad economy.

What a difference a month makes.

Now, capitalism itself is on trial and it's losing badly.  I will stand up and defend free markets and, using the Audacity of Reason, remind voters of the facts:

1. In 1977, Democrat President Jimmy Carter and the Democratic Congress passed the Community Reinvestment Act (CRA).  This act forced banks to "provide credit, including home ownership opportunities to under-served populations".
2. In 1993, Democrat Bill Clinton asked his Treasury Secretary to come up with reforms to increase the expand the CRA.
3. In 1997, Democrat Bill Clinton increased the market share of these CRA loans from almost zero to almost 15%.  Fannie's and Freddie's combined portfolios went from about $200 billion to over $1 trillion during Clinton's term in office - a five fold increase. 
4. In 2005, Bush attempted to reform Fannie Mae and Freddie Mac (GSEs) but he was rejected along party lines despite warnings by Federal Reserve Chairman Alan Greenspan. 

I urge everyone to read all of Chairman Greenspan's Senate testimony on April 6, 2005, but I'll include his prescient conclusion below:

"Without restrictions on the size of GSE balance sheets, we put at risk our ability to preserve safe and sound financial markets in the United States, a key ingredient of support for homeownership."

Still, Bush was President.  Why didn't he do more?  Let me explain.

Bush's #1 priority, after 9/11, was keeping U.S. safe.  Because Democrats chose to undermine the War on Terror and the Iraq War, Bush had to sacrifice other priorities to win support from Democrats to get national security legislation passed and keep us safe.  Had Democrats chose to support the President on national security matters, as was the custom in years past, we would have had real changes at Fannie and Freddie to limit the risk to our overall economy.

Why did Clinton, back in 1993, seek to force banks to lend to people that our banks would not have otherwise lent money to?  Here's how Clinton's Comptroller, Gene Ludwig, described how the Clinton team decided to "reform the CRA":

"Before we made a single decision on proposing reform, we...walked through South Central Los Angeles, in a predominantly minority neighborhood in New York City....we talked with representatives of the Navajo Nation; to bankers, large and small banks, inclusive; to poor people in rural North Carolina and elsewhere. (What) we saw and what we heard shaped this reform package."

How did Clinton seek to enforce compliance?  In 1993, Treasury Secretary Lloyd Bentsen explains:

"In a nutshell, what we're proposing to do is to make it easier for lenders to show how they're complying with the Community Reinvestment Act. ...the changes we're proposing are important because banks now have a very clear, quantitative standard by which their compliance can be judged. And that is very important to banks when it comes to ask regulators to approve mergers, new branches and the like."

Under Bill Clinton and his Democratic Congress, the CRA was reborn and inserted into the very fabric of our financial markets.  Yes, some institutions were happy to make money doing CRA loans but they would not have made them if the Clinton Administration hadn't forced them to in order to get new branches and mergers approved.  We know this because before Clinton, CRA loans were almost non-existent.

A $1 trillion mistake by the Democrats has finally come home to roost.

Now, there is a $700 billion plan to bailout financial institutions that are having a hard time pricing all the bad CRA mortgage-related assets on their balance sheets.  It could cost a $1 trillion or more.  Whatever the cost, it's not a failure of free markets or capitalism - it is a failure of the "mixed economy" that Ayn Rand warned about 40 years ago.

It is the socialist ideology that Democrats want to shove down your throat with stealth and guilt all wrapped up in the purposely ambiguous euphemism "Change We Need".

Yes, substandard lending had some GOP support along the way but make no mistake - it would have never have happened if Democrats didn't push for it.  Conservatives advocate smaller government and merit-based financial decisions.  Liberals advocate more government and financial decisions based on "fairly spreading the wealth".  For 12 years, during Reagan and Bush 41, the CRA was meaningless.  During 8 years of Clinton, CRA-related sub-prime mortgages increased five-fold.

If the banks and Wall Street were so greedy, why didn't they pursue substandard lending before Clinton?

Because it did not make business sense - they would have lost money.  Only after the Clinton Administration "made it easier" to prove compliance with the CRA and back up the loans with implicit guarantees from Fannie and Freddie, did private banks jump on board.  Banks were asked to demonstrate they were doing "their share" of substandard lending to minorities or else the feds would not approve mergers or new branches.

Of course, it was a mistake to package these loans into financial instruments traded around the world but can you really blame a German or Japanese bank for buying a product that had the allure of "U.S. Mortgage Obligations"?  It probably never occurred to the German banker to ask if some of the mortgages were made without verification of income???

Congress did everything it could to grow Fannie, Freddie and CRA loans.  This was a whopper of a mistake.  A $1 trillion mistake by Clinton and the Democrats.  The question is will the public hold them accountable or believe Obama's propaganda that evil-unregulated-free-markets is to blame for this mess?

Last Thursday night, I hosted a “McCain Nation” event - a house party, of sorts, for conservatives.  Living in the state with more Obama supporters per person than any other (Vermont), I appreciate any occasion to meet and greet people who support Jessica's Law and don't feel warm and fuzzy about impeaching President Bush.

Thank you, Cindy McCain, for your comments about the women of Rwanda.  After all they’ve been through, they certainly deserve all the support we can give them (see Justice 4 Rwanda). 

At their upcoming convention, Democrats will make lots of speeches pointing to the “booming Clinton economy of the 1990s” as proof that Democrats can be trusted with the economy.

The problem is the booming 1990s economy began March 1991, 22 months before Clinton took office. 

Like Obama, Clinton promised “Change” during his 1992 campaign for President.  However, later, after the country saw what kind of change Clinton had in mind, voters overwhelmingly rejected Clinton’s policies by electing, for the 1st time in 40 years, a Republican majority in Congress that kept taxes and spending down and forced Clinton to balance the federal budget.

So the credit for the “booming 1990s economy” really belongs to Bush 41 and the ‘94 Republicans. 

So, my question is this:  Will the McCain Campaign debunk the myth of the “booming Clinton economy” so Obama and the Democrats can’t take credit for it anymore?

Charlie Black agreed with my analysis.  I was thrilled!  Perhaps he was just flattering a supporter, in front of 15,000 other supporters, but it was thrilling to offer a senior McCain advisor, directly, my advice for taking away the economy, as an issue, from the Democrats in the General Election.  (I wonder if Mitt Romney was listening - our choice for McCain’s VP!)

Anyway, Mr. Black went on to say that the ‘94 Republicans quickly entered into a balanced budget agreement, with the then-weakened Clinton, to fulfill their promises in the Contract with America, and that that agreement laid the groundwork for historic budget surpluses in the late 1990s.  He also said that he had recently heard Obama’s surrogates on TV talking about how great the Clinton years were for the economy and the country.   

Clinton didn’t create 22 million jobs - the booming economy that he inherited from Reagan and Bush 41 did.

I hope and pray that I’ve planted a seed that will encourage McCain campaign strategists to come up with an ad, or a major speech, that will debunk the booming-Clinton-economy myth and put the 1990s in proper perspective.  Many feel a President doesn’t have much influence anyway on a $13 trillion dollar economy.  I’m sure Microsoft, Amazon, Yahoo, Cisco and other great American companies feel they had a bigger influence on 1990s economy. 

Nevertheless, President Clinton, Hillary Clinton, Barack Obama and hundreds of other Democrat leaders, pundits and supporters in the media often boast how “magnificent Clinton was on the economy”, how “Clinton created 22 million new jobs”, that the economy is a glorious part of his legacy and that evil Bush came along and ruined all the good work Clinton had done in the ’90s.

These are all lies that need to be confronted & corrected. 

So, to the extent that any political leader can take credit for increasing the GDP, and the resulting job growth, it is the pro-growth policies of Ronald Reagan and George H. W. Bush that kept the 1990-91 recession shallow & short - in effect extending the booming Reagan economy into the 1990s.  Credit the 1994 Congressional Republicans for forcing Clinton to keep taxes and spending low and balancing the federal budget - all things that tend to help an economy.  One must also give some credit to Ross Perot for making federal budget deficits a big focus of the 1992 and 1994 campaigns.  Whatever you think of Ross Perot, he made it “sexy” again to demand fiscal responsibility from our elected officials.   

In any event, the credit does not belong to the Clintons.

Democrats, if they’re to be honest, must use the Carter economy for guidance on what an Obama economy might look like.   Like Carter, Obama will, if elected, have both houses of Congress led by Democrats.  Like Carter, Obama’s energy plan is to make our own oil companies the enemy, to seize their “excess” windfall profits, to implement new taxes on oil & gas (aren’t they expensive enough already?) - everything except what’s needed most:  lifting the ban on offshore (OCS) and ANWR drilling effective immediately.

Not her health benefits, of course, but the benefits of doubt that blacks, humanitarians, Obama folk, media, millions of others, have been giving Hillary Clinton for years. 

Early on, it was apparent that her husband cheated on her, more than most, and, incredibly, Hillary stayed with him.  Many thought she wanted political power and had made a Faustian deal, sparing Bill a divorce scandal in return for a shot at the White House later.  Others gave her the benefit of the doubt, defending her by asserting it was a private matter between Hillary and Bill made ugly and public by a “vast right wing conspiracy“.   

Later Bill went back on his campaign promise to stop the killing in the former Yugoslavia.   Again, some, such as Sally Bedell Smith and Christopher Hitchens, believed Hillary did not want another Somalia disaster threatening her health care reforms so Hill urged Bill to ignore the Bosnian cries for help (See Hitchens’ Slate article here).  Supporters gave Hill & Bill the benefit of the doubt, despite over 250,000 deaths there during Bill’s first term, and defended Bill’s inaction by asserting Europeans should help Europeans. 

In 1994, the unthinkable happened.  Over 56,000 blacks per week were being butchered in Rwanda - a murder rate 5 times that of the Holocaust.  Clinton was quick to get Americans out and supported Belgium’s call to pull UN troops out rather than send more troops in.  To get around that pesky UN Genocide Convention, Clinton instructed Secretary of State Christopher and UN Ambassador Albright not to let anyone use the word “genocide” so the US could avoid it’s more and legal obligation to intervene.  Some say Hillary was behind the policy of inaction that let 800,000 die needlessly (See Hillary’s Genocide Problem).  Others gave Hillary the benefit of the doubt and believed her when she said, during her 2008 Presidential Campaign, that she had, in fact, urged Bill to intervene in Rwanda.    Even African-American leaders gave the Clintons the benefit of the doubt about the worse genocide in African history (see Where’s Black Outrage Over Rwanda). 

During the 2008 Presidential Campaign, Billy Shaheen, her New Hampshire Co-Chair, resigned over remarks he made about Barack Obama’s past drug use, and his insinuation Obama not only used, but also dealt drugs.  Shaheen claimed he was only raising an issue that Republicans would have raised in the fall (See Clinton Adviser: Obama’s Past Drug Use A Liability).  Earth to Billy:  An attack on a Democrat during a Democratic Primary is a Democratic attack not a Republican attack.  Some suggested this was only the latest example of a Classic Clinton tactic of smearing a political opponent, waiting for the smear to get a lot of media coverage so it “sticks” then apologize for the comment.  Net result:  the smear still gets out there and it’s cheaper than paying for an ad!  Others (you guessed it!) gave Hillary the benefit of the doubt and resented that Mr. Shaheen made Hillary’s campaign look “out of control”. 

I could come up with a hundred more examples of deeply offensive behavior, or comments, by the Clintons, or their supporters, that asked for the benefit of the doubt over and over again. 

Yesterday, Friday, May 24, 2008, Hillary Clinton lost her benefits (See Hillary’s Big Mistake).  When asked whether her remaining in the race was hurting the Democratic Party, she mentioned that her husband’s campaign didn’t “wrap up” until June (it was over in March, 1992) and that “We all remember that Bobby Kennedy was assassinated in June in California”. 

WHAT IS SHE IMPLYING??? 

In the context of a question about why she’s in the race still (when she has no real chance to win) she brings up RFK’s assassination?  Most might say she’s implying that, if only someone would take out her opponent, she’d win this thing.  Once again, some may give her the benefit of the doubt but, ding-ding-ding, she’s all out of benefits. 

No more for you, Hillary!  You’ve used up all the good will even your supporters had for a woman and a couple who put themselves first, at the expense of others, for the last time. 

It’s especially offensive given that her opponent is a black man and blacks have a sad tragic history of losing their leaders to a sniper.  America’s heart still hurts from the loss of Dr. King.  Colin Powell, although absurdly popular, never ran for fear of assassination.   Is there some nut job out there that will hear her words and “step up to help”?  It was a grossly irresponsible comment that I could rant about some more but I thought Keith Olberman said it best, the comments were “Unforgivable”.

I called Rush Limbaugh on Friday about Rwanda. You can read the transcript and listen to the audio here:

http://www.rushlimbaugh.com/home/daily/site_050908/content/01125115.guest.html

I was a first time caller and a little nervous talking to a man I’ve admired for most of my adult life, and still do.

As such, I did not engage him about some of the things he said that were a little off the mark.  Rush’s overall answer was fine but he made a couple mistakes in his comments & I know he’ll want to correct the record as soon as practical.

Rush’s 1^st mistake: “Clinton was busy at the time saving Haiti.” 

Even if the Haiti intervention happened during the genocide (Apr-Jul, 2004), the US military had the capacity to return Aristide to power and intervene in Rwanda.  Bush proved this later when he fought two wars (Iraq & Afghanistan) with over 400,000 troops deployed.  Clinton himself estimated in 2003 that he would only have needed 5,000 – 10,000 troops to “save half of those killed in Rwanda”

So, Haiti is not a legitimate excuse. Christopher Hutchens suggested that Hillary asked Bill not to intervene in Bosnia, as he had promised he would in the 1992 campaign to Elie Wiezel, because a messy intervention might jeopardize her health care reforms. Hutchens estimates that about 250,000 died before Clinton finally intervened in his second term. I believe this also explains why the Clintons abandoned Rwanda. The Clintons did not want another Somalia. The Hutu commanders in Rwanda knew about Clinton’s mistake in Somalia and knew if they killed a few soldiers the West would leave and not come back. They were right.

Rush’s 2^nd mistake:   “Clinton squared it all …took responsibility.  He was a big man.  At least Bill Clinton admitted a mistake”.

Clinton’s apologies on Rwanda were late (in 1998 - well after the 1996 Presidential Election) and, well, Clintonesque.  He suggested he was not fully aware of the genocide and he wished he could have done more. 

In 2004, documents were released that show Bill Clinton, and Vice-President Al Gore, were kept well-informed of events in Rwanda and, in fact, began using the term “genocide” privately within 3 weeks (150,000 dead) but chose not to get involved, or allow others to send rescue teams (that would embarrass us) until three months later – after 800,000 had died.

Even if he really apologized – that doesn’t “square it all”. No apology or singing in black churches or African charity work can make up for letting 800,000 humans die needlessly.

So, given these facts – why is Rush sticking up for the Clintons? Is this part of Operation Chaos?

The Clinton /Rwanda controversy is rich with conservative talk radio material about liberal hypocrisy:

1. Hundreds of thousands of black women, young and old were raped and mutilated. Where were the feminists then? Why do they support Hillary now?
2. Over 800,000 Africans were butchered to death? We should all be outraged but why is there not outrage from African-Americans like Obama, Sharpton, Clyburn, Jackson, etc? Hours and hours about all the terrible things whites have done to blacks in Rev Wright sermons and nothing about Rwanda?
3. Democrats and their activist groups are outraged about 4000 dead soldiers – “Bush lied, they died”. Of course, we should honor every soldier’s sacrifice but they died fighting a noble cause. Tabonhe victims of the Rwanda Genocide were largely innocent – many women and children. So many were slaughtered that the Kagera River ran red with blood and clogged in some places with the bloated & hacked body parts of women and children.  Democrats are outraged about 4000 soldiers who died fighting a noble cause but not a peep about 800,000 innocent blacks butchered to death at a murder rate 5 times the Holocaust?

Apparently, the Clintons made a political calculation that, in the end, no one cares that the Clintons abandoned Africa during it's worst genocide, not even African-Americans.

They were right.

Contrary to popular belief, a bad economy can be an advantage for Senator McCain - it depends on how he handles it.  Just because the GOP has the White House during an economic downturn, doesn't necessarily mean the country will replace them with Democrats. 

Three things can happen after November - economy gets better, stays the same, or gets worse.  Putting Dems in the White House could make the economy worse - in fact, if history is any guide - that's likely.    Since McCain is a self-described economic light weight - he needs some help.

Here are three steps to help McCain address the economy - the number one issue for most Americans:

1) Announce (early) Mitt Romney will be his Vice-President.  Romney is a private sector superstar that fills a huge gap in McCain's otherwise strong resume. Romney's excellent at promoting free market solutions to effectively counter the populist rhetoric of Obama/Clinton.   He’s also great at explaining why doing nothing (letting markets sort things out) is usually best.  Make no mistake, both Democrats seek to turn this country left and back to the bad old days of socialism and progressivism.  We need a strong defender of capitalism on the ticket - nobody better than Mitt Romney.

2) Working with Romney, McCain should draft a major economy speech that educates voters about the successes of capitalism and how markets work best unfettered. For example, he can highlight how many hundreds of millions of people from India and China have moved from poverty to middle class and how that helps our economy (exports). He could talk about how liberal government policies and unions have crippled Detroit and Michigan hinting if you want America to follow the same course - elect Obama/Clinton. 

3) The knockout blow would be to debunk the myth that America can trust Democrats with the economy because of the great Clinton economy of the 1990s. The fact is the booming economy of the 1990s began with a recovery in March 1991 - 20 months before Clinton took office in January 1993. (See the U.S. Bureau of Economic Analysis @ bea.gov).   In addition, the Clinton budget surpluses that Hillary's so proud of were a direct result of the fiscal discipline of the historic 1994 Republicans and their Contract with America. 

McCain should help Americans understand that an Obama-Clinton economy would look more like Jimmy Carter’s economy than Bill Clinton's economy. In 1976, like 2008, a Democrat became President (Carter) with a struggling economy and a Democratic Congress. That combination (Dem President & Dem Congress) made a bad situation worse.

Do we want to repeat history and be worse off in four years? 

Now that's some straight talk!