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Is it a free market or monopoly controlled?
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Editor, Manteca Bulletin,
The whole point of my asking for objective evidence is so that we can make informed choices and decisions.  But there is another part to making informed choices and decisions that we need to consider, and that is the understanding of the information we are using to base our decisions on.  The Democrats are failing in this arena as well.
 The recent Manteca Bulletin Opinion blog replies to my “Letters to the Editor” show this well.  The writer, who goes by Anthony002, brings to the table some interesting facts that are not relevant to the recent financial crisis.  He tries to build a relationship by blindly copying facts without explaining the connection.  He also lists a bunch of statistical data that on the surface sound reasonable but fail when the data is compared to the mortgage process and how Mortgage Backed Securities (MBS) work. He stated “Only one of the top 25 sub-prime lenders in 2006 was directly subject to the housing law that’s being lambasted by conservative critics.”  My first question is, what “housing law” are you referring to?  My second question is, what “company” are you referring to?
 Like most critics against the Democrats, I am lambasting their philosophies and policies they pushed, because they drove the country into our financial mess.  Anthony002 agrees that there was a lowering of the loan standards.  Who lowered that standard is where we disagree.  I have been very critical about the Democrat AG under Clinton for suing banks for not loaning money to those that are high risk borrowers.  The greater the risk, the greater the interest rate, hence the sub-prime rate increase.  This is one of my many points which show who lowered the standards.  Do your own research on the Freddie and Fannie hearings on YouTube and see for yourself who was defending these practices and who was trying to change those practices.  You will find that it was the Democrats that supported Freddie and Fannie, while the Republicans tried to change them.  You will also find that the Democrats push for political correctness was a major driver for forcing banks to lower their standards.  Furthermore, the FHA provided mortgage insurance for sub-prime home loans.
They had nothing to do with the financial meltdown.  It was Freddie and Fannie that set the standards for these loans which then resold these high risk loans to the investment world.  Anthony002 cited 84 % and 85% data that is most likely correct, but so what?  How does the fact that a private firm made the loan or a publicly traded firm made the loan?  After a loan is made, most are sold and become MBS regardless if it was a private or public company.  Some high grade loans are kept for in-house investments, while the rest of the loans are sold to Freddie or Fannie to be repackaged and sold to investors.  These loans can only be sold to Freddie or Fannie if they meet their criteria.  Anthony002 goes on to imply that the 1995 Securities Litigation Act was the cause of our financial crisis.  This act deals with people who have lost money investing in the stock market.  There is no relationship between those that lost money investing and MBS’s.  It was MBS and the people who defaulted on their loans that caused this mess.  Anthony002 cites Enron as an example.  In fact, Enron and WorldCom are two examples of how well this act that showed its effectiveness for stock holders.  
The Madoff case will become another example of its effectiveness.  He also states that it was market manipulation, not Gray Davis, that caused the high energy prices in California.  It was Davis that de-regulated the energy market.  He botched the job so badly, that it was easy for companies like Enron to manipulate the energy market.  If Davis had not de-regulated the energy market, would we have had the problems?  It is clear the answer is no.  Anthony002 goes on to state the OPEC can set the “prevailing rate” for oil.  Even with production cuts, OPEC has failed to set the prevailing price.  What is it -  market controlled or monopoly controlled?  You can’t have it both ways.
Scott McComas
April 12, 2009