VALLEY PATRIOT EDITORIAL
In 2007, during George Bush’s term of office, the Democrats took over both houses of Congress controlling a majority in both chambers. On January 3, 2007, the day that happened, the Dow Jones averages closed at 12,621, the GDP for the previous quarter was up 3.5% over a year earlier and the unemployment rate was only 4.6%. George Bush’s economic policies had set a record of 52 straight months of robust job creation sufficient to drop the unemployment rate to under 5%. After this date, the present record of the Democrats and Obama begins.
When the Democrats took over, Barney Frank became chairman of the House Financial Services Committee, and Chris Dodd took over the Senate Banking Committee. The economic meltdown that happened 15 months later was in banking and financial services - exactly those segments of the economy which the Dodd and Frank committees regulated. During the intervening months, since the Democrats took control, Bush had asked Congress a number of times for more oversight of Fannie May and Freddie Mac because they clearly were operating in a manner that was becoming financially risky for the US economy.
The Bush administration supported legislation to provide the needed oversight. If passed, a new regulator would examine their books, limit their mortgage portfolios, and set capital requirements. The House Banking Committee passed the bill with 11 Republicans supporting it and nine Democrats opposing. Senate Democrats, then warned the Republican Committee Chairman that all the Senate members, including Barack Obama would filibuster the bill if it were brought to the floor.
Democrats clearly opposed any effective constraints on Fannie Mae or Freddie Mac. Democrats were in control, and so the reforms Bush proposed died. Barney Frank blocked these measures by calling them a “chicken little philosophy”. The Community Redevelopment Act of 1977 was enacted during the Carter administration with subsequent Democrat sponsored changes. This encouraged banks to lower lending standards and enabled Freddie and Fannie to market sub standard mortgage securities. The ultimate confluence of these Democrat sponsored pressures triggered an implosion of the housing market, leading to the present recession.
Democrats controlled the budget process for 2008, 2009, 2010, and 2011. Obama went 1000 days without a budget, and still blames it on the Republicans. If the Democrats inherited any deficit, it was the 2007 deficit, the last of the Republican budgets. That deficit was the lowest in five years and the fourth straight decline in deficit spending. After that, the Democrats in Congress took control of spending, and that includes then Senator Barack Obama, who voted then as Senator.
If Obama inherited anything, he inherited it from himself and a Democratic Congress. The public needs to be reminded straight out how the country really got into this deplorable mess.