>>13 many decades in formation
14 years, to be precise.
'Crony' Capitalism Is Root Cause Of Fannie And Freddie Troubles By TERRY JONES INVESTOR'S BUSINESS DAILY
| Posted Monday, September 22, 2008 4:30 PM PT
In the past couple of weeks, as the financial crisis has intensified, a new talking point has emerged from the Democrats in Congress: This is all a "crisis of capitalism," in socialist financier George Soros' phrase, and a failure to regulate our markets sufficiently. Well, those critics may be right — it is a crisis of capitalism. A crisis of politically driven crony capitalism, to be precise. Indeed, Democrats have so effectively mastered crony capitalism as a governing strategy that they've convinced many in the media and the public that they had nothing whatsoever to do with our current financial woes. Barack Obama has repeatedly blasted "Bush-McCain" economic policies as the cause, as if the two were joined at the hip. Funny, because over the past 8 years, those who tried to fix Fannie Mae and Freddie Mac — the trigger for today's widespread global financial meltdown — were stymied repeatedly by congressional Democrats. This wasn't an accident. Though some key Republicans deserve blame as well, it was a concerted Democratic effort that made reform of Fannie and Freddie impossible. The reason for this is simple: Fannie and Freddie became massive providers both of reliable votes among grateful low-income homeowners, and of massive giving to the Democratic Party by grateful investment bankers, both at the two government-sponsored enterprises and on Wall Street. The result: A huge taxpayer rescue that at last estimate is approaching $700 billion but may go even higher. It all started, innocently enough, in 1994 with President Clinton's rewrite of the Carter-era Community Reinvestment Act. Ostensibly intended to help deserving minority families afford homes — a noble idea — it instead led to a reckless surge in mortgage lending that has pushed our financial system to the brink of chaos.