Banks Using $700 Billion Bailout To Buy Other Banks, Not Make More Loans

Washington told taxpayers a major rationale for us to fork over $700 billion to banks was to save the American economy by making loans more accessible, but it looks like at least at Chase they rather use it to buy other banks, NYT reports.

Times reporter Joe Nocera listened in on a Chase employee-only conference call and one employee asked, “Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?”

Translation: When are we going to start making loans?The executive moderator replied:

Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase.. What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.

Later, the same executive said,

We would think that loan volume will continue to go down as we continue to tighten credit to fully reflect the high cost of pricing on the loan side.

Translation: We’ll use that $25 billion as a war chest to buy other banks, and hoard it in case times get tougher.

“Read that answer as many times as you want,” wrote NYT, “You are not going to find a single word in there about making loans to help the American economy.”

Furthermore, a new tax break allows banks to immediately deduct any losses they that are on the books of the banks they acquire.

What is the government doing to make banks use the money for loans? Apparently, jack, except for asking really really nicely. If this continues and banks don’t use their government handout to open up loans, this bailout will be the single greatest ripoff in American history, and those responsible are naive if they don’t think they’ll have a giant bloody revolution on their hands—and I mean that in the literal sense.

So When Will Banks Give Loans? [NYT] (Photo: Getty)

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  1. Skankingmike says:

    There was this guy and he ran for president and he said like this was a bad idea..

    Then there were these two other guys both spouting how this bill needed to pass and they’re like running for president as well.. so like.. yea.. we should maybe elect them…

    /sarcasm

    stupid bill + greedy lobbyists + banking system broken + politicians = American Revolution 2.0?

  2. Trai_Dep says:

    Leave it to Paulson to push a plan that rewards – surprise – Goldman Sachs and the mega-banks to take our money and blow it in ways that don’t benefit the country.

    Considering his first draft made him Tzar of $700B w/ no review or reporting requirements, it’s due to Congressional dickering that we even heard of this attempt. Let’s hope (demand!) for more “interference” until this option is beaten down. Hard.

    I’d also like to see a provision banning dividends until each company has returned every tax-payer dime paid, with interest. Otherwise it’s a giveaway in a different form.

    I guess this puts (another) nail into the coffin of the “businesses can be trusted so let’s not regulate them, evah” approach, hmm?

    • maztec says:

      @Trai_Dep: Excuse me. We should be worrying more about making sure we have a financial system that encourages DIVIDENDS rather than gross BETTING (will the stock go up? will the stock go down?). It is a significantly more stable system. If a company has lost money, aka no profit, then it should not have anything to give out as dividends anyway.

      On the other hand, if by dividends you meant pay-outs to big-greedy corporate-execs, I am all with you.

      • Trai_Dep says:

        @maztec: I’m fine with dividends, although I (and Warren Buffet) are more growth oriented for long-term value (and portfolio) creation.
        However, if taxpayers are injecting huge amounts of public funds into companies, these companies can’t export these funds via unearned pay-outs to shareholders that sat on their hands while these companies immolated themselves. Same with stock repurchases using these funds, or as you point out, exec bonuses: both are mechanisms to transfer public funds into private hands.
        So yeah, once they’re paid back every dime of our money, with interest, they can do what they like. Until then, they shouldn’t be able to transfer our money into their pockets. :)

    • bwcbwc says:

      @Trai_Dep: I don’t have a huge problem with dividends as long as they don’t exceed, say 5% of net earnings. After all, as equity-holders, some of the dividends would be paid back to the government.

      And for some banks, I can see why they are pursuing an acquisition strategy. The government forced all banks to allow them to buy in, in order to hide which banks were actually in trouble. If the banks that aren’t in trouble use the government money to start lending, they’d cause the marginal/failing banks to fail, despite the bailout. Up to a certain point, the consolidation is more healthy for the overall economy and the consumer than by forcing the marginal banks to compete with healthy banks flush with government money.

      But, the bottom line is that: this isn’t what congress and the taxpayers agreed to. The banks drank the Kool-aid, now they have to live with extreme government interference in their normal business operations. Or, I suppose they could just give the money back.

  3. youbastid says:

    Ha, a new America Revolution? The US has the world’s strongest military for TWO reasons, you know.

    • Ryan Duff says:

      @youbastid: Yeah, but they’re all over seas…

      • unpolloloco says:

        @Ryan Duff: And they can’t deal with guerilla or urban warefare…..

        Anyway, revolution is pretty extreme for economic reasons. Very few people (myself included) would consider money enough of a reason to overthrow a government (especially at this point in time). I don’t know of any successful revolutions in history that have had money as their primary goal (religion, freedom, yes; money, no)

    • Communist Pope says:

      @youbastid: The problem our government would face in attempting to use U.S. troops against its own populace on the wide scale required in an armed, populist revolution is both basic and major: Our troops all come from American small towns and cities, and they’d be expected to kill the very people they grew up with in those locales. Probably not the exact same people, but people more or less like them. My gut instinct tells me you’d see massive military defections in a situation like that.

      If the military starts growing clone troopers, it will be a different story. Probably a stupid one written by George Lucas.

      • tevetorbes says:

        @kidjesus:

        “My gut instinct tells me you’d see massive military defections in a situation like that.”

        I read this as “massive military defecations” and nearly spit my coffee all over my screen.

      • Pandrogas says:

        @kidjesus: US Army North is currently retraining 3rd Infantry 1st Brigade to handle non-lethal weaponry in case of domestic crisis. Enough to take on a city, but probably not enough to quell a full on civil war.

    • crouton976 says:

      @youbastid: Well, that may be. BUT, there is a reason that the 2nd amendment was created… you know, so people would be able to defend themselves against or even overthrow the government if it became too corrupt. And while the armed forces might have better toys, the American people have the greater numbers. It would only be a matter of time before the people came out on top.

    • garbagehead says:
    • garbagehead says:

      @youbastid: It might interest you AMERICANS to know that there is a standing battalion IN YOUR COUNTRY RIGHT NOW!!! I urge anybody who cares about themselves to search “Posse comitatus”. It is a law which forbids the use of US troops on your soil. Unfortunately the wikipedia page has been changed to hide the facts and the Army Times page no longer features the article.
      Your country is now a battle ground. Remember the “War on Terror”? It designated the whole world as a possible battlefield.
      Good luck killing your brothers.

    • Madame_Dry_Ice says:

      @youbastid: As a retired USAF officer, sadly, you are totally correct. We in fact do have troops made up of some of the coldest hardest ‘bastids’ you never wanted to meet, with more lethal than nonlethal arsenal than most of the regular troops have BECAUSE many U.S. service personnel WILL ‘desert’ and prove their selves to be patriots.

      In fact, no normal troops will be involved, because anyone we now know as patriotic [yes they monitor the troops closer than anyone, and their families even looking for secret coded communications] well be ‘debriefed’ and either completely decommissioned, or if they are seen to be a serious threat, sent various places depending on their perceived threat level to the new world order, which is being constructed by the Bush’s and their German and other West and East European architects.

      Presently, I am writing a Sci-Fi thriller “Dry Ice: The Pentagon Records”. It will be a shocker and a very scary movie, because its based around some serious truths.

      And troop cloning is not as far fetched as one might think. Super soldiering has been going on since JFK’s time and will progress as far as human genetics and the passive and ignorant American citizenship will permit it to go, and THEIR input will likely be for no real account by the time they really know the truth.

      Along with the rise in hate crimes by isolated cells of fascists who are NOT patriotic [see today’s news [news.yahoo.com]], and we have a situation ripe for war.

      • garbagehead says:

        @Madame_Dry_Ice: Sweet! I’m not sure if you’re mocking me or just being paranoid but your book sounds like fun.
        PS Are you going to put anything in there about how our kids will grow up having sex with androids?

  4. EthnicRedneck says:

    You give a bunch of spoiled rich boys free money and are surprised they don’t want to share? Jesus, you know it’s time to chlorinate the gene pool when even one person falls for this crap.

  5. Jonbo298 says:

    That picture is so freaking creepy…but yet it’s creepingly true.

  6. Brazell says:

    And we just *had* to pass this bill, right Barry? Right John? Right Hillary? Right George? Right Nancy? Right Harry?

    The bills and acts that we should be most skeptical of are those of which leaders of both parties come together on. Granted, I’m a partisan hack, so when it comes to bipartisanship, I am usually pretty worried by it.

  7. Coles_Law says:

    Hey, if lax government oversight and unchecked greed got us into this mess, it can get us out!

    Right?

    Who am I kidding, if anybody needs me, I’ll be under my desk in the fetal position.

  8. Willie T says:

    Chase isn’t the only bank using funds to purchase other banks, PNC is acquiring National City.

    • CumaeanSibyl says:

      @WillieT: Yeah, and National City wasn’t even in that much trouble, so it’s hard to argue that PNC is “rescuing” it or something.

  9. Anonymous says:

    So we are angry that banks aren’t going to take government money and make questionable loans? This is YOUR money that the government pushed on Chase, B of A and a few others that didn’t ask for it or need it. You are the investor – why are you upset they aren’t out there doing the things that put us in the spot we are in now?

    • godlyfrog says:

      @DavidGurges: Have you tried taking out a loan recently? The same kind of people who have historically paid their loans back are being denied. Small and medium businesses that need to expand with a proven track record of profit can’t get loans. Banks are unwilling to take the risk of non-payment on loans, so they’re only giving out loans to those that they know they can get the money back on. This money was supposed to change that. By giving them a backing of cash, the risk should be reduced, allowing them to lighten the restrictions on mortgages so that responsible people can once again buy homes.

    • TheLadyK says:

      @DavidGurges: Because we aren’t talking jumbo home loans to an 18 year old McDonald’s worker. We’re talking payroll loans to businesses who depend on the credit market to function – like the kids at Linens N More.

      The credit market is more than just home loans to the unprepared, its *everything*. I’d even be okay with the home loan sector stagnating for a bit, if we could keep normal mom and pop shops able to operate.

    • duffbeer703 says:

      @DavidGurges: @CumaeanSibyl:

      The big issue here is that the government forced banks that didn’t need money, like JP Morgan, to take federal bailout funds. The reason was simple: if everyone didn’t take the money, depositors with accounts at banks that did take the money would withdraw funds and go to the stronger bank. (ie. perpetuate the problem the bailout was supposed to solve)

      At the end of the day, it’s better for stonger banks like JP Morgan to absorb poorly capitalized bands. Remember that the objective here is to stabilize the financial sector. Enabling mergers and consolidation is a good way to do that.

    • valleygirl_18002 says:

      @DavidGurges:

      In the words of Ben Folds Five:
      “i want my money back, you bitch”

  10. Fujikopez says:

    Look, Jabba the Hutt and the Monopoly Man had a kid!

  11. Tank says:

    wait a minute. isn’t there some sort of check/balance to make sure the banks are using the money in the spirit in which it was intended, rather than helping build their empire by taking over other, smaller, struggling banks?

  12. opsomath says:

    You know what? I’m terrified of the new Federal Monomegabankalith that we are creating apace. In fact, it looks like it is deliberate, as two processes seem to be dominating the financial world;

    1) Big banks buy slightly smaller, failing banks with government-loan capital.
    2) Surviving banks are ordered to turn over stock to government in return for capital to do (1).

    Result? We get a federally controlled giant bank monstrosity. Bye-bye, free market. Just remember that we didn’t have one of those before, either. Does anyone think this is deliberate consolidation?

    • Rectilinear Propagation says:

      In fact, it looks like it is deliberate…

      @opsomath: For a while now, my mom has been insisting that most of what’s happened in the past few years has been deliberate, including this.

    • Gann says:

      @opsomath: I agree. Don’t forget the fact that google’s ceo wants to be Obama’s Cheif Technology Officer.

  13. Comms says:

    Senator Dodd, “If it turns out that they are hoarding, you’ll have a revolution on your hands. People will be so livid and furious that their tax money is going to line their pockets instead of doing the right thing. There will be hell to pay.”

    I can’t roll my eyes any harder.

  14. opsomath says:

    I’ll tell you who’s loaning out money; has anyone noticed the car commercials lately? The makers and dealers of all these crappy, gas-guzzling luxury SUVs and full-size trucks start their commercials by bragging about how much money they have to loan you if only you’ll buy one of their vehicles no one wants.

    I pray that’s not money derived from the bailout, but something tells me it might just be. Wouldn’t that be fabulous? That taxpayer money goes directly into hooking people up with new Escalades so they can continue wrecking the climate apace.

  15. laserjobs says:

    Vote out any representative or senator who voted to give King Paulson that money. Freaking idoits should lose their political positions.

    • woogychuck says:

      @laserjobs: Fortunately the house members in NH voted against it and things are looking good for at least one of the senators that voted for it.

      • MrEvil says:

        @woogychuck: 24 out of 30 Texas representatives voted NO both times. The only six that voted FOR the second bail-out (with more Pork) are puppets. And I HOPE the rest of the people in my district are mad enough to fire Mac Thornberry next week. I think some 80% of Texans said “FUCK NO” to the bailout.

    • CharlieInSeattle says:

      @laserjobs: Yep, everyone should not vote for either McCain or Obama!

  16. bohemian says:

    Vote with your checkbook. If your using one of the consumer banks in question, now would be an ideal time to move to a credit union or small local bank.

  17. bastion72 says:

    color me surprised.

  18. Rectilinear Propagation says:

    Allow my to express my profound lack of surprise.

  19. Parting says:

    Pfffttt… Surprise, surprise.

    • garbagehead says:

      I@Victo: It pisses me off that this story has 20 000 hits.
      It pisses me off that no one is at all happy with this “news”.
      It really pisses me off that the 15 000 or so of you just sit on your asses and think that writing “witty” comments makes you better than the asses who took you hard earned money.
      If you’re really at all moved by this story then get of your fat asses! Do something about it!
      Or just watch some cute panda videos on Youtube and forget that you’re A HUMAN BEING WITH CHOICES.

  20. CumaeanSibyl says:

    I was reading about this earlier, and someone said they hadn’t wanted to put too many preconditions on the bailout funds because otherwise banks wouldn’t go for it. Somehow, preventing a business from taking taxpayer money unless it’s desperate is a bad idea?

    • godlyfrog says:

      @CumaeanSibyl: The article explained this, partially. They wanted to make sure all of the banks would take the cash so that none of them looked better than the others, thereby causing a run on one bank so customers could deposit it in a more stable bank. Ironically, the bank in question, Chase, was one of the ones who weren’t in trouble, so they didn’t need the $25 billion to fix any problems.

  21. TechnoDestructo says:

    Uh, isn’t part of the problem that too many financial institutions got so large that they could take down other institutions with them?

  22. Anonymous says:

    PNC just got 3 Billion dollars to buy national city. What I mean is, the fed gave them 7 BILLION DOLLARS to buy national city, which they then only paid 5 Billion for. But National city came with a rebate check of One Billion dollars because of the One Billion of Visa Stock that they have. Of course National City was also told by the Fed that they would not be given any money, and that they would be forced to merge or DIE.

  23. draketrumpet says:

    I wish Mitt Romney were still on the ballot. John McCain admits he doesn’t know jack about this stuff, and Barack Obama II helped perpetuate it after his other democrat buddies started it with Fannie & Freddie.

  24. Anonymous says:

    The problem is that loans have been TOO accesible to people who can’t afford to pay them back. The banks that are in a good position to acquire now are the ones that had conservative lending policies over the past several years. These banks will succeed because of their good policy decisions in the past and are in a position to make the economy stronger int future. Now I’m not saying that the bailout was a good idea at all, but the better banks seem to be succeeding in this difficult economic time.

  25. endless says:

    heres an idea:

    class action lawsuit?

  26. Fist-o™ says:

    I hate when the government interferes with commerce. They should only be there to maintain ethical business practices, and break up monopolies… NOT SUPPORT THEM. (Freddie & Fanny)

  27. lincolnparadox says:

    Revolution isn’t always about guns and explosions. Boycott. Heck, use small town banks and credit unions that are not associated with any of the big banks hoarding our tax dollars. Tell your friends and family to do the same.

    You’ll see some change.

  28. BigBoat says:

    If this was a loan, why can’t we call the notes in?

    • azntg says:

      @BigBoat: In the many ironic twists of life, I’m going to put down a bet that there’s probably a fine print on the bill that states that the “loan” cannot be recalled without a decade’s notice and that the “loan” does not need to be repaid in its entirety.

  29. mariospants says:

    As a former American I can only look on in horror at this state of events (not that Canada would do likewise in similar circumstances, but at least when reporters like this find out, the shit will hit the fan).

    Honestly people, did ANYONE think that this “bailout” would not be used by the bankers as a gift?

    Everything about this is so wrong and so fucked up that it makes you wonder about what you’re not hearing about.

  30. tankertodd says:

    Some information:
    – Chase was forced to take the money. Paulson marched the CEOs of the largest banks into a room and essentially made them take the money. Ken Lewis on last week’s 60 Minutes said so.
    – The government gets a 5% return on the money for the first 2-3 years and then 8% the following years, so its in the bank’s interest to pay back the money in the next couple of years.
    – This is bank capital. To protect the government investment you want the bank to work in its best self-interest. The banks invariably know the market better than you, I, or even Paulson.
    – This is what you get when you invest government funds into a private bank. If you wanted to control where the money goes, create a public bank to loan despite risk/reward. Of course, it’s been done before and they called it Fannie Mae and Freddie Mac. And we all know how that worked out…

  31. SayAhh says:

    Privatize profit (capitalism!), socialize loss (we can’t allow capitalism to fail, it’s too big!).

    Apparently “socializing loss” means even more capitalism (with free capital!) for Chase. Good luck with getting back your money, American Q. Taxpayer.

  32. Lin.karl says:

    these Chase employees are smart bastards!! I think I might know the rationale behind this. these dementors use $25 billions of free money to buy the struggling banks those are to receive some of $700 billions loans. They will try to buy those banks at discount cost, as long as it is below how much those banks are going to receive from the government. In the end, Chase will become even bigger and it will have the government loan money for those banks Chase bought.
    I think before approving the loan. The government needs to make sure the money is for lending out to businesses. it is not for inter-banking business.

  33. alstein says:

    Actually revolution wouldn’t be necessary. Vigilantism combined with the treatment usually reserved for sex offenders would be equally effective.

  34. Trencher93 says:

    Just wait! In a few years this will be the biggest scam in history. Started as using government money to keep people in their homes instead of foreclosure, now it’s banks getting rich with tax money. We have not even begun to see the fallout from this. Wait until the facts start coming to light in a few years, and the muckraker books start coming out. This is going to be the biggest scandal in US history short of Watergate.

    • azntg says:

      @Trencher93: Except, of course, when all this surfaces, the original perpetrators will be long since out of office and have long since been living in a private island out in the Caribbean or something.

  35. ViperBorg says:

    Where’s my shotgun?

  36. Snarkysnake says:

    The net effect here is that we poor worker bees are giving money to these big banks so that they can buy out the smaller banks that give them some semblance of competition.Ever been to England ? There are only about half a dozen banks in the country and they treat their customers like it. “R” or “D” ,vote the people out that got us here.

  37. zibby says:

    To be fair, Chase didn’t want or need the money.

  38. ironchef says:

    never underestimate big business’s ability to screw you.

  39. moore850 says:

    Yeah, because merging everything into one giant entity really worked well for the oil and steel industries a few generations ago…

  40. Wormfather is Wormfather says:

    I hate to be that guy, I cant even belive I’m saying this but. A. yes the bailout was poorly conceived and it’s doomed to fail. But if the banks dont buy the smaller ones and they fail, well the taxpayers will pay for that via FDIC and the loans that will be eventually made so that the smaller banks can be bought anyway.

    It’s just unfortunate that there are no good options.

  41. MisterE says:

    Thanks to our ineffective lawmakers, the new world order will socialize all forms of credit and currency. The banks simply want to ensure they remain in the ruling class while they jack up credit card rates.

  42. Pinget says:

    We’re following the first part of the Gordon Brown solution, but not the rest. Once you own the banks, you *order* them to start lending. Grow a pair, Paulson, and use the authority you have, now that you own the banks.

  43. EricLecarde says:

    So this is what France was like in 1789. Except there aren’t any Croissants.

  44. AdvocatesDevil says:

    Wow, it’s SO weird that my credit union isn’t haven’t any troubles at all… where is everyone who said credit unions were for losers? Haven’t heard much from those people lately, eh?

  45. grandzu says:

    A upheaval in power is the reason for the Homeland Army.

    Brigade homeland tours start Oct. 1

    3rd Infantry’s 1st BCT trains for a new dwell-time mission. Helping ‘people at home’ may become a permanent part of the active Army
    By Gina Cavallaro – Staff writer
    Posted : Tuesday Sep 30, 2008 16:16:12 EDT

    The 3rd Infantry Division’s 1st Brigade Combat Team has spent 35 of the last 60 months in Iraq patrolling in full battle rattle, helping restore essential services and escorting supply convoys.

    Now they’re training for the same mission – with a twist – at home.

    Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force.

    But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.

    After 1st BCT finishes its dwell-time mission, expectations are that another, as yet unnamed, active-duty brigade will take over and that the mission will be a permanent one.

    They may be called upon to help with civil unrest and crowd control.

    The brigade will not change its name, but the force will be known for the next year as a CBRNE Consequence Management Response Force, or CCMRF (pronounced “sea-smurf”).

    “I don’t know what America’s overall plan is – I just know that 24 hours a day, seven days a week, there are soldiers, sailors, airmen and Marines that are standing by to come and help if they’re called,” Cloutier said. “It makes me feel good as an American to know that my country has dedicated a force to come in and help the people at home”

  46. postnocomments says:

    Obama became the Democratic nominee by slamming every senator who voted for the Iraq war. A war he didn’t have the chance to vote for, but he claims he had the judgement to vote against. Now, his biggest opportunity to show his judgement happens during his campaign, with a bailout backed by Bush and sold as swiftly as the Iraq war. Guess what? He failed the test. So much for your judgement, Obama.

  47. brent_r says:

    I hate the politicians responsible for this so much.

    But not nearly as much as I hate the bankers.

  48. incognit000 says:

    Will be? It already is.

  49. SoCalGNX says:

    Everyone I know called and emailed legislators to stop the bailout. Since they ignored us, lets vote all of them out. How about a country in which the voters are represented instead of the corporations? Startling concept, eh?

  50. psm321 says:

    I’m sad that National City is being bought out. It’s been good to me (and not many complaints on this site either)… who knows how things will turn out with new owners

    • Anonymous says:

      @psm321:

      I would like to know why Chase was “forced” to take $25B but neither National City (9th largest bank) nor KeyBank (12th largest) were offered a cent by the Feds. If you look at the banks who did get the money you’ll see almost all are in the Northeast. This wasn’t a bailout, it was Paulson doing his Xmas shopping early.

  51. reverendskinner says:

    Revolution? Please.

    The American people are going to do what they always do now. They’re gonna complain, they’re gonna “demand answers,” and they’re gonna blog.

    Then they’re gonna go back to work, pay their bills on time, and watch presidential debates all while taking it right up the chute. Just like always.

    There will be no long-lasting questions, there will be no protests, and there certainly will be no revolution.

    I wouldn’t be a bit surprised if the government managed to pass another $700 billion bailout that went to the exact same uses.

  52. FuryOfFirestorm says:

    The American public is like a a virgin on prom night and the banking industry is her date :

    “I’ll just put in the tip…I promise!”

    6 months later, we’re knocked up, and the banking industry is dating the prom queen.

  53. Anonymous says:

    When is this type of thing anything new? Our government has been run by the banks nearly since its inception. Our Federal Reserve is made up by the banks that received the bailout (Chase and JP Morgan). They basically gave themselves more money with no upfront collateral. The Federal Reserve isn’t even Federal, it’s a private institution. They loan our government money and make interest. THEY ALSO PAY TAXES! This is communism at it’s finest. I expect this from the Democrats/Socialists but the Republicans have jumped on the bandwagon. Welcome the Republicrats!

  54. trembender says:

    Look at how the bailout was conceived. Barney Frank was on the House Financial Services Committee. He oversaw Fannie Mae and Freddie Mac. His boyfriend was an executive at Fannie Mae. They both lobbied to lower the lending standards for people who couldn’t obtain standard loans because they didn’t qualify i.e. low income minorities. The rest of the lending industry followed suit. Now there is a housing crisis which is a big reason for the bailout. Now Barney Frank is blaming the Bush Administration for the housing crisis when the Administration called for lending reform as early as 2001 because Fannie Mae and Freddie Mac were getting out of control. Nany Pelosi, Barney Frank, and Harry Reid as well as other leading Democrats opposed the reform to reign in out of control lending institutions. I don’t agree with some of the Bush Administration especially is his tending to be socialist, but put the blame where is belongs, ON THE DEMOCRATS!

  55. Michael Belisle says:

  56. CharlieInSeattle says:

    If you voted for McCain or Obama, this is your fault.

  57. sephiroth_4 says:

    Where’s Tyler Durden when u need him!?