California, USA –Chaldean business leaders are fast feeling the pinch as banks are reluctant to even give payroll loans on verified accounts receivables. With the U.S. Economy on the verge of bankruptcy Chaldeans are still befuddled with how this could be possible.
Sarmad Khomoro, of Bay Side Liquor in Los Angeles puts it this way, “If one customer asks me to loan him some money and that he will pay me back next month, I can handle it if he doesn’t pay his debt, it’s only one person. Now, if the city of Los Angeles passes a law that tells me I have to give everyone who asks me a loan and the city will back-me-up if they don’t pay me-back. I am going to give loans to hundreds of people because I want to get more customers and make them happy. I don’t care if they can pay it back or not, since the city promised me they would bail me out if there was a problem.”
Khomoro’s example is pretty much exactly what happened on a national level with banks. Banks were reassured that bad loans would be protected by Fannie Mae and Freddie Mac. www.CHALDEAN.org Michigan columnist Sam Yousif wrote that the blame lies with Democrats. The article created a flurry of e-mails. Over forty-two e-mails were sent asking for more information. So we put our California business reporter, David Najor on the task. This is what Najor reports...
It all began with the CRA (Community Reinvestment Act) that quickly turned into a thief’s bank in the early 90's. The Los Angeles Times reported that, starting in 1992, a majority-Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains."
During the Clinton administration, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Andrew Cuomo, Clinton's secretary of Housing and Urban Development investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.
Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. Najor reports, “When Democrats controlled both the executive and legislative branches, socialism took hold over sound business practices.”
In 1999, Democrats were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration's affirmative action lending policies as one of the "hidden success stories" of the Clinton administration, saying that "black and Latino homeownership has surged to the highest level ever recorded."
Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn't get out of their loans by selling their houses. A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Many business journals are reporting that Democrats set an affirmative action time-bomb and now it's gone off.
In Bush's first year in office, the White House chief economist, N. Gregory Mankiw, warned that the government's "implicit subsidy" of Fannie Mae and Freddie Mac, combined with loans to unqualified borrowers, was creating a huge risk for the entire financial system. Rep. Barney Frank denounced Mankiw, saying he had no "concern about housing." How dare you oppose suicidal loans to people who can't repay them! The New York Times reported that Fannie Mae and Freddie Mac were "under heavy assault by the Republicans," but these entities still had "important political allies" in the Democrats.
Now, at a cost of hundreds of billions of dollars, middle-class taxpayers, including Chaldeans are going to be forced to bail out the Democrats' two most important constituent groups: rich Wall Street bankers and welfare recipients.
Najor says Adib Mammo’s e-mail best sums up the financial crisis, “which is like a nuclear bomb going off in a city. Every Chaldean with a business will pay for the Democrats house hand-out”
Najor also includes Mike Yono’s comment that, “Democrats have ruined education, science and entertainment and to top it off a Democratic president with a Democratic congress with socialist views and political correctness wrecked the financial industry and have harmed America worse than a terrorist attack.