Election 2008: September 2008 Archives

Don Danz traces the roots of the current upheaval in the mortgage industry back to Jimmy Carter's Community Reinvestment Act ("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"), CRA changes approved by Bill Clinton and the Democrat-controlled 103rd Congress, requiring lenders to loosen their mortgage underwriting criteria, and Democratic resistance to mortgage industry reforms proposed by George W. Bush in 2003 and John McCain in 2005.

Don also explains why Barack Obama was one of the politicians most generously funded by Fannie Mae and Freddie Mac -- second only to Sen. Christopher "Countrywide" Dodd (D-ConnMan).

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.

By now you've heard about the KFOR-SurveyUSA poll of 652 likely Oklahoma voters from September 5-7. The poll shows Republicans with substantial leads in statewide races:

President: McCain/Palin over Obama/Biden, 65% to 32%.
Senator: Jim Inhofe over Andrew Rice and Stephen Wallace, 56% to 34% to 6%.
Corporation Commissioner (long term): Jeff Cloud over Charles Gray, 52% to 34%.
Corporation Commissioner (short term): Dana Murphy over Jim Roth, 54% to 36%.

The links above will take you to the crosstabs for each poll, showing how the candidates when the sample is broken down by race, gender, party affiliation, age, education, ideology, church attendance, income, and abortion views.

Keeping in mind that the smaller the subsample, the bigger the margin of error, it's still striking that McCain has the support of 42% of Oklahoma Democrats.

I'm happy to see my friend Dana Murphy doing so well. She is the most qualified candidate for Corporation Commissioner that I have ever seen on the ballot. If Oklahoma voters can look beyond party affiliation, she ought to win by a landslide.

Kimberly Strassel of the Wall Street Journal describes in depth how Sarah Palin, first as an oil and gas commissioner and then as Governor, busted up an insider sweetheart deal involving a natural gas pipeline from Alaska to the lower 48. Here's the heart of the story:

And so it came as no surprise in 2004 when former Republican Gov. Frank Murkowski made clear he'd be working exclusively with three North Slope producers--ExxonMobil, ConocoPhillips and BP--to build a $25 billion pipeline to move natural gas to the lower 48. The trio had informed their political vassals that they alone would build this project (they weren't selling their gas to outsiders) and that they expected the state to reward them. Mr. Murkowski disappeared into smoky backrooms to work out the details. He refused to release information on the negotiations. When Natural Resources Commissioner Tom Irwin suggested terms of the contract were illegal, he was fired.

What Mr. Murkowski did do publicly was instruct his statehouse to change the oil and gas tax structure (taxes being a primary way Alaskans realize their oil revenue). Later, citizens would discover this was groundwork for Mr. Murkowski's pipeline contract--which would lock in that oil-requested tax package for up to 40 years, provide a $4 billion state investment, and relinquish most oversight.

Enter Mrs. Palin. The former mayor of Wasilla had been appointed by Mr. Murkowski in 2003 to the state oil and gas regulatory agency. She'd had the temerity to blow the whistle on fellow GOP Commissioner Randy Ruedrich for refusing to disclose energy dealings. Mr. Murkowski and GOP Attorney General Gregg Renkes closed ranks around Mr. Ruedrich--who also chaired the state GOP. Mrs. Palin resigned. Having thus offended the entire old boy network, she challenged the governor for his seat.

Mrs. Palin ran against the secret deal, and vowed to put the pipeline back out for competitive, transparent, bidding. She railed against cozy politics. Mr. Murkowski ran on his unpopular pipeline deal. The oil industry warned the state would never get its project without his leadership. Mrs. Palin walloped him in the primary and won office in late 2006. Around this time, news broke of a federal probe that would show oil executives had bribed lawmakers to support the Murkowski tax changes.

Among Mrs. Palin's first acts was to reinstate Mr. Irwin. By February 2007 she'd released her requirements for pipeline bidding. They were stricter, and included only a $500 million state incentive. By May a cowed state house--reeling from scandal--passed her legislation.

The producers warned they would not bid, nor would anyone else. Five groups submitted proposals. A few months before the legislature awarded its license to TransCanada this July, Conoco and BP suddenly announced they'd be building their own pipeline with no state inducements whatsoever. They'd suddenly found the money.

Mrs. Palin has meanwhile passed an ethics law. She's tightened up oil oversight. She forced the legislature to rewrite the oil tax law. That new law raised taxes on the industry, for which Mrs. Palin is now taking some knocks, but the political background here is crucial.

I'm excited at the thought of having this kind of energy and passion for what's right at work on behalf the entire nation, not just Alaska. I'm hopeful that Palin's actions in this case become a model for politicians of every level, ever party, in every part of the country. If this kind of reform can launch Palin to the second highest office in the land, perhaps aspiring pols will decided that busting up the Good Ol' Boys is a better strategy for advancement than becoming one of them.