I’ve been waiting for this and here it is.  For years Fannie and Freddie and their enablers, Frank and Dodd and the gang, would accuse as “hating poor people” and “not wanting affordable housing” anyone who tried to responsibly regulate, limit, or otherwise look into their activities.  Barney Frank now adds the unfortunate but predictable extension – some of these poor people are black, so people (read "Republicans") attacking the GSE’s are "racists".  This guy is so dirty with this stuff it is unbelievable - and now this despicable diversionary tactic. 

http://www.breitbart.com/article.php?id=D93LAKT01&show_article=1

Barack Obama's long-term association with racist Reverend Wright has been widely publicized, and to a lessor extent the terrorist Bill Ayers. But the foundation of much of Obama's early work as a community organizer, and it appears parts of his world view were influenced by Saul Alinsky. Senator Obama was trained by Chicago's Industrial Areas Foundation, founded by the radical communist organizer Alinsky in 1940, by Alinsky disciples. Michelle Obama actually used phrases from Alinsky's last book, Rules for Radicals in her speech at the democratic national convention. There is even a picture on Obama's campaign web site teaching at the University of Chicago with "Power Analysis" and "Relationships Based on Self-Interest" written on the board, key terms used in the Alinsky method.

Alinsky was a strong proponent of the end justifying the means. He was a bare knuckle brawler that inspired generations of far-left activists. The GOP has never been good at these types of win at all cost practices on the ground. Alinsky believed in ignoring ethics and morals to achieve his desired outcome. In Rules for Radicals Alinsky wrote, "Ethical standards must be elastic to stretch with the times…all values are relative in a world of political relativity." He even went so far as to praise the "first radical…who rebelled against the establishment and did it so effectively that he at least won his own kingdom — Lucifer." ACORN is an organization based on the Alinsky method.

It is predictable that the states where ACORN is being caught perpetrating voter fraud this election cycle are the key swing states (Ohio, Florida, etc.). In Ohio yesterday, a judge ruled against a GOP lawsuit that asked that people not be able to register to vote and vote and the same day. No chance of fraud there! In the 2004 election, a change of 3-4 votes per precinct in Ohio would have made John Kerry president.

As a community organizer, Obama had close ties to the Chicago ACORN chapter and trained a number of their leaders and activists. Recently Obama's campaign paid $800,000 to ACORN for "field work". In Obama's original 1996 state senate campaign (launched with an event at Bill Ayers house) ACORN members were used as volunteer shock troops.

According to the New York Times, Obama's memberships on the Woods Fund and Joyce Foundation boards, "allowed him to help direct tens of millions of dollars in grants" to various liberal organizations, including Chicago ACORN.

I think Bill O'Reilly had a valuable insight when he commented to Obama in his interview of him that Obama seems very comfortable with very far-left people and organizations. How many average middle Americans would feel comfortable sitting down and even having a conversation with Bill Ayers, Bernardine Dohrn, Saul Alinksy, Alice Palmer, Reverend Wright, Father Phlegar or Louis Farrakhan? It is a rouges gallery of American terrorists, communists, leftist radicals, racists, and anti-Semites.

How can you reconcile these associations and history against someone who has pledged to the "post-partisan"? In Obama's associations, voting record, and work history there is not a single indication that he will govern from the center. If you know of any, let me know. If his track record is a guide, he will be the most radically leftist president in our history, but I'm sure in a thoughtful way.

Fairness is the most overused and disingenuous word in the liberal lexicon. Massive tax increases under the guise of "fairness". No free trade agreements under the guise of "fair trade". $340B in annual spending increases to "recast" the safety net woven by FDR and LBJ. Wealth redistribution on an unprecedented scale. It doesn't sound like a post-partisan agenda to me. Obama's "fairness" sounds a lot like socialism.

A liberal friend of mine recently sent me some material repeating the Democrat talking points that Fannie Mae and Freddie Mac, enabled by congressional Democrats, are not to blame for the finanical crisis, and that Republicans pointing at the GSE's are only trying to deflect blame from a failure of deregulation. The sources provided included a column from BusinessWeek, an op-ed by liberal economist and New York Times columnist Paul Krugman, and a piece from The Huffington Post.

The problem with The Huffington Post, besides the anger and hate, is that stuff gets thrown out there un-cited or cited from dubious sources that is for the consumption of the left who mostly just shout “Amen” - with no critical thinking. It is actually quite amusing how many of the featured articles on The Huffington Post are from "political pundits" such as Barbara Streisand and Alec Baldwin. Unfortunately, the NYT’s is getting more like The Huffington Post every day, with Frank Rich (dubious and spurious "facts") and Bob Herbert (anger) leading the charge. No respectable journalist is going to look to The Huffington Post for a factual discourse. But I digress.

In The Huffington Host piece, written by a Mr. Abromowitz, he actually cites Wikipedia as a source for what Fannie and Freddie can and can’t do. You’ve got to be kidding me. As I’ve explained to my kids, Wikipedia is useful for quick access to information, but it is not a valid source for a school paper (or an op-ed in this case). Anyone can put something out on Wikipedia, or edit a piece that is already published. For all I know Abromowitz placed the entry there himself. Abromowitz writes:

“Now, as even Wikipedia will tell you, "the term 'subprime' refers to loans that do not meet Fannie Mae or Freddie Mac guidelines." So how can Republicans point to Fannie and Freddie to lay blame when asked about the current housing crisis?”

I looked at the author’s bio, and he is an attorney whose work focuses on “affordable housing”, So he has to know what he is writing is not true. Krugman repeats the falslehood that Fannie and Freddie can’t touch sub-prime paper (un-cited). Krugman should know better. In addition, Krugman writes:

“Fannie and Freddie had nothing to do with the explosion of high-risk lending a few years ago, an explosion that dwarfed the S.& L. fiasco.”

I don’t know anything about Aaron Pressman in BusinessWeek, so I don’t know if he should know better or not. He does cite a Federal Reserve study that recounts the causes of the crisis and does not mention the GSE's. The Fed study is accurate, but focuses only on the scope of the Fed’s mission, which does not include the GSE's, but does focus on what in my opinion is the other root cause – the incompetence (or worse) of the rating agencies. He goes on to state the following (un-cited), which is demonstrably false.

“All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower’s income or employment history? All made in the private sector, without any support from Fannie and Freddie.”

The most in-depth and factual analysis I have found is an overview paper from the American Enterprise Institute written by Peter J. Wallison, the Arthur F. Burns Fellow in Financial Policy Studies at AEI, and Charles W. Calomiris, the Henry Kaufman Professor of Financial Institutions at Columbia Business School. The were assisted by Edward Pinto, a former chief credit officer of Fannie Mae, who helped decipher the GSE's Enron-like disclosures. It is scrupulously cited and footnoted. Mr. Walllison testified before Congress yesterday as an expert on the subject.

http://www.aei.org/publications/pubID.28704/pub_detail.asp

It is a very long piece, but I’ll highlight a few points.

• In 1994, Fannie Mae Initiated a $1 trillion affordable housing initiative, and both Fannie and Freddie announced new $2 trillion initiatives in 2001.
• In the early ‘90’s the Democrat-controlled Congress lowered the capital requirement for the GSE's from 10% to 2.5%% in order to increase funding for “affordable housing”.
• In 1995, the Clinton administration approved the GSE's purchase of sub-prime loans in order to meet their affordable housing targets (pre-OFEHO, there was no GSE egulatory agency at the time), but did not provide any rules about lending practices that needed to be followed for these loans.
• In 2004, the House Financial Services Committee developed a GSE oversight reform bill that was so badly weakened by GSE lobbying that the Bush administration refused to support it. The Senate Banking Committee, then under Republican control, adopted much stronger legislation in 2005, but unanimous Democratic opposition to the bill in the committee doomed it when it reached the floor, including opposition from Barack Obama.
• On June 30, 2008, Fannie held or had guaranteed subprime and Alt-A loans with an unpaid principal balance of $553B, plus $25B of Alt-A and $36.3B of subprime loans purchased as private label securities That’s a grand total of $619B – or 23% of its single-family mortgage book.
• In August of this year, Freddie reported that 52% of its entire single-family credit guarantee portfolio was from the problematic book years 2005-2007. It further reported that these mortgages had the following subprime characteristics: option ARM - 72%, interest only - 90%, credit scores fo less than 620 - 61%, loan to value greater than 90 - 58%, Alt-A - 78%.
• Freddie’s total junk, Alt-A and subprime loan exposure in August was $392B, or 20 percent of its entire single-family mortgage book.
• Fannie Mae and Freddie Mac were the biggest buyer of the AAA tranches of subprime pools in the years of excess: 2005–2007. Without their commitment to purchase the AAA tranches of these securitizations, it is much less likely a market would have existed for these securities around the world.
• The AEI paper also dissects what it charitably calls Krugman's "confusion” about his misstatements that the GSE's were prohibited by law from purchasing sub-prime loans, and that the GSE's exposure to sub-prime loans was zero, neither of which is true.
  
• On September 23, in Congressional testimony, regulator James Lockhart said the following as reported in the Washington Post:

Fannie Mae and Freddie Mac purchased and guaranteed "many more low-documentation, low-verification and non-standard" mortgages in 2006 and 2007 "than they had in the past." He said the companies increased their exposure to risks in 2006 and 2007 despite the regulator's warnings.

Roughly 33 percent of the companies' business involved buying or guaranteeing these risky mortgages, compared with 14 percent in 2005. Those bad debts on mortgages led to billions of dollars in losses at the firms. "The capacity to raise capital to absorb further losses without Treasury Department support vanished," Lockhart said.

It is very possible that the current economic crisis will lead to Barack Obama winning the presidency. Ironically, Obama's policies, if enacted, will further damage the economy. When I ask Obama supporters why they think he is the best candidate to lead our country, I invariably hear that Obama has superior judgment, is thoughtful, and is eloquent. But here is the problem. Whenever I ask for an example of Obama’s superior judgment other than the fact he opposed the Iraq war from the safe confines of the Illinois statehouse I draw a blank.

Likewise, it is hard to get specifics from supporters on actual policy proposals that they think are better than McCain's. Or they'll say something like, "Obama will provide health care to every American". Well, McCain's plan will too. Can they tell me why Obama's heath care plan is superior to McCain's in any factual sense? They cannot.

To take the Obama Policy Challenge you have to come up with several Obama policies that are materially different from McCain’s position on the same subject. For example, both Obama and McCain agree that we need a few more troops in Afghanistan. Both agree we need to concentrate our efforts on the Afghanistan/Pakistan border region. Both agree that torture is unacceptable. Both agree (finally) that the surge “succeeded beyond our wildest expectations”. They both support the wiretapping FISA program. Both support campaign finance reform (as soon as Obama is done with his campaign). In fact, I think Obama hurt himself in the first debate by starting off many of his rebuttals by agreeing with McCain on many of the issues.

Speaking of judgement, Governor Palin is making a strong case on the campaign trail that Obama’s long relationship with Bill Ayers is a problem. It is interesting that the 5 years Obama spent on Ayres’ board, which is really the only executive experience he has, is the one period Obama will not talk about. Ayers’ Annenberg Challenge raised and distributed money to leftist groups with the goal of supporting Ayers’ educational philosophy – the radicalization of young students. Obama was in charge of distributing the money each year to groups like Acorn in order to turn school children in to little Bill Ayres. This is the man who would be president.

The explanations from the Obama campaign regarding the Ayres relationship have been a dog’s breakfast of shifting spin. Bill Ayers was “just a guy in Obama’s neighborhood”. When Obama met Ayers he was a respectable professor – Obama did not know about his radical background as a terrorist. Obama was only 8 when Ayers was bombing the Pentagon (I have no idea why this excuses Ayers’ actions and makes it OK to be his pal). At one point Obama’s campaign manager said their kids went to the same school. That may be the best one, as Ayers’ kids are 20 years older than Obama’s. I think it was just last year when a Chicago magazine featured Bill Ayers and published a picture of him proudly grinding an American flag into the ground in a back alley.

The Obama campaign believes the Ayers issue is damaging, because they have counterattacked hard by misrepresenting McCain’s days with the “Keating 5”. McCain did show some bad judgment getting anywhere near this guy, and was investigated by the Democrat-led Senate. But he was cleared 100%. In addition, the attorney hired by the Democrats to investigate McCain said that the senator was the most squeaky clean politician he’d ever seen. In a battle of associations, Keating is of course a legitimate topic, but only if you don’t lie about it.

I frankly don’t understand why the McCain campaign is so reluctant to make a big issue out of the other ghosts of Obama’s past. He sat in the church pew of America hater and racist Reverend Wright for 20 years, but claims to have never heard anything divisive. I get the sense that McCain thinks Wright is off-limits because of the racial overtones of attacking him. But since polls are showing that the only black votes McCain will probably get are Thomas Sowell and Condi Rice I’m not sure why that matters.

Obama’s mentor getting started in the Illinois senate was state legislator Alice Palmer, who prior to the fall of the Soviet Union travelled frequently to communist party meetings there. She was a vocal proponent that everything the Soviet Union was did was good and everything the U.S. did was bad (sound familiar?). I haven’t heard a peep out of the McCain campaign about her.

I think that if the great uninformed majority who are going to vote for Obama might be given pause if they truly knew how comfortable he is with these radical America haters – and how he sought them out as mentors and advocates for his political gain. What if the reciprocal was true and McCain had maintained a 20 year relationship with a white supremacist, distributed millions of dollars to radical fascist activist groups, and been pals with someone who had bombed abortion clinics and black churches back in the day and said he “didn’t do enough” and was “unrepentant”, all along claiming to usher in post-partisan politics? McCain wouldn’t even be able to run for county commissioner. Can anyone explain perhaps the most extreme double standard in the history of politics in our country? Please post a response and let me know. It truly eludes me.

Remember, to play the Obama Policy Challenge you have to be able to come up with several examples of Obama’s superior judgment, and several policy proposals that are materially different from McCain that you agree with. I’d really like to know. You can’t claim superior judgment without evidence of such, and thoughtfulness without policy as a lone credential for the presidency is insufficient.