Quipster

← →

Dangerous Liaisons

September 30, 2008 · 3 Comments

Stanley Kurtz in the New York Post’s O’s Dangerous Pals.  Barack’s ‘Organizer’ Buds Pushed For Bad Mortgages, gives us the day’s lesson in the role of community organizers, as evidenced by their activities a la Chicago way.


“ACORN protester in Florida last week trying to get a cut of the financial-market-rescue bill.”
Image courtesy of http://www.nypost.com/seven/09292008/postopinion/opedcolumnists/os_dangerous_pals_131216.htm?page=0.

Community organizers intimidate banks into making high-risk loans to customers with poor credit.

In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes – and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers.

…help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it.


“Sowing Seeds of Destruction”
Image courtesy of http://djkenada.blogspot.com/2007_06_01_archive.html.

The seeds for the 2008 financial crisis were planted back in 1977 with the creation of the Community Reinvestment Act by Congress (12 U.S.C. 2901) and implemented by Regulations 12 CFR parts 25, 228, 345, and 563e.

…intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations.

Answers.com provides a little more information.  The purpose of the CRA was

to combat the “systematic denial of credit to persons living within a certain area.” prohibited redlining by requiring regulated financial institutions to show that their facilities met the “convenience and needs of the communities in which they are chartered to do business.”

The lack of adequate lending, coupled with the of available government funds, had caused economic decay in poor neighborhoods and left the urban areas crime ridden and economically devastated. Congress hoped by codifying an obligation to meet the needs of local communities that financial lending mandated by CRA would foster neighborhood stability and revitalization.


“Bad Credit”  Your Approved!  Sale.”
Image courtesy of http://www.msnbc.msn.com/id/23879390/.

President Jimmy Carter signed the law, despite significant opposition from the banking world.  In 1989, President H.W. Bush enacted more legislation during the savings and loan crisis in the 1980’s, to improve public oversight of the lending and banking processes involved through the CRA, via public disclosure (Financial Institutions Reform, Recovery and Enforcement Act of 1989).  President Bill Clinton in 1993 changed the CRA regulations, that increased access to mortgage credit for inner city and distressed rural communities despite GOP opposition.   In essence, this increased the number of risky mortgages.  President George W. Bush signed new regulations in 2005 which unfortunately fell short of the desired original plans to rein in Fannie Mae or Freddie Mac, courtesy of the Democratic controlled Congress.


“U.S. Housing Market.  25 cents.”
Image courtesy of http://www.freerepublic.com/focus/f-news/1993613/posts.

Back to Kurtz’s fine article, he goes on to discuss the CRA’s lofty goals and how they have been taken advantage of by the community organizers of ACORN (Association of Community Organizations for Reform Now).  ACORN learned long ago that it could force the hand of banks by filing formal complaints , courtesy of the Clinton administration, accusing them of not doing enough to make loans available to communities, usually high risk borrowers.  Bank mergers and expansions or even adding new branches, could be tied down with complaints to federal authorities.  It was insufficient for the banks to make risky mortgage loans already, but then this risk was usurped by Fannie Mae and Freddie Mac who would take on those loans in the secondary mortgage market.  Congress approved Fannie Mae (government sponsored enterprise and public company) and Freddie (government sponsored) to buy back the high risk bank loans, which the government would repackage and secure them for resale on the open market.  This triggered the skyrocketing growth in the subprime mortgage market (1994 $35 billion in loans to 2008 $1 trillion).

“Antique Handcuffs”
Image courtesy of http://www.nypost.com/seven/09292008/postopinion/opedcolumnists/os_dangerous_pals_131216.htm?page=0.

Senator Barack Obama has a long history of associating himself with the leaders of the ACORN movement in Chicago, and fueling the movement, known for its intimidation tactics.    One long term colleague with extensive ties to Obama, Madeline Talbot, has been involved in complaints against banking institutions in Chicago and triggering protests and regulatory hearings, which yielded several news features about her work with ACORN.   Affirmative action lending was her mantra via ACORN, demonstration after demonstration, in the defense of poor and/or minority folks with poor credit histories.

Long the director of Chicago ACORN, Talbott is a specialist in “direct action” – organizers’ term for their militant tactics of intimidation and disruption. Perhaps her most famous stunt was leading a group of ACORN protesters breaking into a meeting of the Chicago City Council to push for a “living wage” law, shouting in defiance as she was arrested for mob action and disorderly conduct. But her real legacy may be her drive to push banks into making risky mortgage loans.

She insisted that banks show a commitment to minority lending by lowering their standards on downpayments and underwriting – for example, by overlooking bad credit histories.

Image courtesy of http://www.rockclimbing.com/cgi-bin/forum/gforum.cgi?post=1973509;guest=47154726.

Talbot herself noted the goal of dragging banks ”kicking and screaming” into high-risk loans.  She was featured in a Chicago Tribune article in 1993, as the leader of an ACORN initiative with several Chicago banks, some which she had sparred with previously, to make mortgage loans available to people with shaky credit, through the Fannie Mae program.  This was desirable since success with Fannie Mae would mean banks would be more likely to lend to uncreditworthy customers, partly through her efforts.  And fame would naturally follow.  Unfortunately, the ugly end result of Fannie Mae is being borne out today.   And her due fame is now being recognized on a wider platform.


“Democrats.  Learning the day’s talking points.”
Image courtesy of www.politicalpartypoop.com via http://messageboards.aol.com/aol/en_us/articles.php?boardId=528628&articleId=1811261&func=6&channel=Member+Guided+News&filterRead=false&filterHidden=true&filterUnhidden=false.

Talbot has had a long history with Obama, in ACORN sponsored activities.  Obama trained her staff, as a ”community organizer” when he returned to Chicago after law school.  Voter registration drives.  Leadership training seminars.  Obama then began funding ACORN activities, as a member, and then as a committee chairman, of the Chicago’s Woods Fund.

Indeed, the report brags about pulling the wool over the public’s eye. The Woods Fund’s claim to be “nonideological,” it says, has “enabled the Trustees to make grants to organizations that use confrontational tactics against the business and government ‘establishments’ without undue risk of being criticized for partisanship.”

The Woods Fund report makes it clear Obama was fully aware of the intimidation tactics used by ACORN’s Madeline Talbott in her pioneering efforts to force banks to suspend their usual credit standards. Yet he supported Talbott in every conceivable way.


“Obama: ‘I need you to go out and talk to your friends and talk to your neighbors. I want you to talk to them whether they are independent or whether they are Republican. I want you to argue with them and get in their face.’”
Image courtesy of http://community.myfoxdc.com/blogs/RED-DOG1/2008/9/.

Obama was also the Chairman of the Board of the Chicago Annenberg Challenge, a foundation vested in funding school reform in Chicago.  The foundation was the brainchild of the unrepentant Pentagon bomber/terrorist of the 1960’s Bill Ayers, who hired Obama with a similar political philosophy, to run the charity.  Their history of working together is much more extensive than Obama admitted when queried by Charlie Gibson on ABC News Debate with Hillary Clinton April 2008.  Nonetheless, the Wall Street Journal, September 23, 2008, revealed about Obama’s leadership and funding work with CAC,

From 1995 to 1999, he led an education foundation called the Chicago Annenberg Challenge (CAC), and remained on the board until 2001. The group poured more than $100 million into the hands of community organizers and radical education activists.

The American Thinker stated CAC as ”wasting $150 million dollars” at Obama’s helm.  The educational reform ideas the CAC was pushing did not bear out demonstrable effect after comprehnsive testing .   Obama’s only major career venture in charge of an organization failed.


“Throwing a bucket of money down the toilet.
Image courtesy of www.marketingtuneup.ca/ via http://philsbackupsite.wordpress.com/.

Nevertheless, Obama  was instrumental in funding the ACORN movement and its members to such a great extent, that Talbot gave him a rousing endorsement at the time of his first state Senate campaign.

“We accept and respect him as a kindred spirit, a fellow organizer.”

And as Stanley Kurtz the senior fellow with the Ethics and Public Policy Center in Washington, D.C. notes,

IN short, to understand the roots of the subprime-mortgage crisis, look to ACORN’s Madeline Talbott. And to see how Talbott was able to work her mischief, look to Barack Obama.

Then you’ll truly know what community organizers do.


“Obama.  Cringe”
Image courtesy of http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132×5700384.

See:

Categories: Uncategorized
Tagged: , , , , , , , , , , , , , , , , , , , , , , , ,