The Change

January 1st, 2009
by Alfonso Ebanks

[private] v7-1-Our Islands

While Barack Obama will be the next president of the United States of America, I remain disappointed and I would rather think that my disappointment is because I consider myself a person with conservative Republican political views.

In my opinion Mr. McCain’s campaign was hampered from the beginning by the fact that this huge economical crisis the world is experiencing occurred during the Republican Party’s watch. I am not too surprised by the outcome of the elections, because the captain is always blamed for the sinking of the ship no matter who pulled the plug, but most people don’t know that all this financial mess is just a symptom of a larger crisis. It boils down to spending more money than you make.

The US government is no longer the leading economic power we all assume it to be. In recent years the US government has been borrowing money from all over including China. For the past one hundred years the US has boosted its economy and solved it unemployment problems by going to war every few decades, but this strategy no longer works because wars have became too expensive.

The idea to get houses for people that could not afford them goes back to 1938 and the idea was reinforced in 1970 by creating Fannie May and Freddie Mac respectively. These two organizations later specialized in subprime loans and private banks and mortgage lenders followed suit.

A subprime loan is lending money to people that are high risk borrowers, in other words you could lose you shirt giving credit to these people. It was in 1992 that Congress ordered Fannie Mae and Freddie Mac to purchase low to medium income mortgages. During the Clinton administration Fannie Mae was investigated for racial discrimination because a lot of applications for loans by unqualified borrowers were being rejected.

It was also during this time that the secretary of HUD strongly suggested that at least 50% of both Fannie Mae and Freddie Mac portfolios be made up of high risk borrowers by the year 2001. Clinton’s federal housing authorities ordered these two organizations to allow welfare and unemployment benefits to be considered as legitimate income sources for a person applying for a loan to purchase a house. Loans for mortgages were extended to people that could not even afford the down payment.

The government should not have allowed speculators to invest securities money in these high risk real estate deals. Clinton’s administration can be credited with making possible the highest home ownership in the history of the USA, but at what price? Well, now the chickens are coming home to roost.

On another note, Hispanic voters looking for adjustment to immigrations laws that will let their illegal alien relatives live and work permanently in the US. Democrats offered more and Hispanic voters went across traditional lines and voted heavily for the Democrats, 3 to 1 for Barack Obama. There is no doubt that this was instrumental in Obama’s victory. Well, we now have the first African- American president ever and maybe next we’ll have a Hispanic president. [/private]

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