The mortgage crisis is fully upon us. And there is plenty of finger-pointing going on in Washington. But no one is addressing the core issue here: greed. Some are greedy for power, others money, or even both. But any way you slice it, it’s greed.
First, a bit of history so we know how we got here. Nancy Pelosi is insisting that Democrats are faultless in the mortgage crisis.
House Speaker Nancy Pelosi, when asked Tuesday whether Democrats bear some of the responsibility regarding the current crisis on Wall Street, had a one-word answer: “No.”
Pelosi (D-Calif.) ripped President Bush’s “mismanagement” of the economy and a lack of regulation that led to the current situation.
“I think the American people have had it with this situation where the middle-income people in our country are not protected from the ramifications of the risk-taking and the greed of these financial institutions,” Pelosi told MSNBC.
Barack Obama is towing the party line ignoring facts as well.
When the White House is hostile to any kind of oversight, corporations cut corners and consumers pay the price.
But the truth is that the Bush administration foresaw the bubble bursting and proposed tighter restrictions on Fannie Mae and Freddie Mac government-subsidized “companies.” Side note: isn’t that an oxymoron? As the NY Times reported in 2003:
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
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.
Gasp! How could all this blame be placed on the Bush administration then? Who was blocking this legislation? We read:
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”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,” Mr. Watt said.
The Bush administration’s mistake was they didn’t treat the problem with enough urgency. If Bush applied the same amount of pressure as he did the War on Terror, he could have gotten more cooperation from Democrats. And he didn’t have any “false intelligence” to worry about. These numbers weren’t lying.
The Democrats biggest mistake was ignorance for the sake of blame in order to preserve power.
But the American consumer is not exempt either. Even though the government was willing to loan money to people who had no business borrowing it, we should have exercised better wisdom than simply jumping on the greed train. Especially Christians.
Christians should know better than to store of treasures on earth. Certainly we need to have a home and God want us to have a nice, clean place to live. But when the average home has increased from 1,600 square feet to 2,200 square feet in the last several years while the average family size has decreased, why do we need more room for less people? This is called greed. Greed is not only unbiblical, but it also effects non-believers as well. When people put their own desires above others, society loses.
Greed by American consumers. And greed by politicians. A sure fire way to shoot a hole in the housing bubble. This is not solely a financial crisis, it is a moral crisis. I believe that Jesus is Lord over all of life and that His followers, Christians, need to speak biblical truth to the all issues, but most importantly these pressing situations. There is no biblical-secular divide with some areas off limits to Scripture. The earth is the Lord’s and everything in it. The Church needs to speak up here and point a way out of this situation, at least in an emotional, spiritual, and moral sense, if not a financial sense. People are scared in God’s eyes and their jobs are on the line. We’re starting to reap from the greed we’ve sown. We need to call people to put their hope in God.