A Black Agenda Radio commentary by BAR executive editor Glen Ford
In his second term, President Obama has decided that he was wrong about the cause of the Great Meltdown. He now believes “that Fannie Mae and Freddie Mac – not the private banks – were responsible for the housing crisis.” Under Obama's new plan, government mortgage guarantees will go directly to the private banks, which – as we all know – can be trusted to act responsibly.
Obama Mimics Wall Street on Housing Crisis and Offers Black Congressman a Vanishing Job
A Black Agenda Radio commentary by BAR executive editor Glen Ford
“Wall Street is determined to abolish even quasi-public corporations, leaving all markets, including housing, totally at the disposal of the private sector.”
The Barack Obama show, now in its fifth year, is like a bad movie: part war pornography, and part like “The Butler” – in which almost every fact is either untrue or crazily out of context. No wonder even Black folks, who desperately want to suspend disbelief when it comes to the first Black President, no longer take the man’s words seriously.
Obama has totally capitulated to the Wall Street and Republican explanation for the collapse of the U.S. housing market, and the resulting global economic meltdown of 2008. He now agrees with the likes of the Wall Street Journal, that the system is ailing because there’s too much “government” in housing, and not enough “free market.” Therefore, he’s calling for the phasing out of the Federal National Mortgage Association, known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, called Freddy Mac. The two quasi-governmental agencies trace their lineage to the New Deal policies of the 1930s, before home ownership was the norm in the United States, and when people who did own their homes were losing them to the Great Depression. It was federal intervention and loan guarantees that created the modern U.S. housing market. But President Obama has joined the right-wing crusade to remove all vestiges of the New Deal from American society.
Fannie Mae and Freddie Mac have operated much like private corporations ever since President Lyndon Johnson amended their charters in 1968. However, in the 21st century, Wall Street is determined to abolish even quasi-public corporations, leaving all markets, including housing, totally at the disposal of the private sector.
“Too much ‘government’ in housing, and not enough ‘free market.’”
Obama is just the man to do it. Sounding like Bill Clinton taking the axe to welfare, Obama said he will “end Fannie and Freddie as we know them…to make sure the kind of crisis we just went through never happens again.” The president is unmistakably saying that Fannie Mae and Freddie Mac – not the private banks – were responsible for the housing crisis. This is pure Republican propaganda, a position vehemently opposed by Obama and every other Democrat during the campaign of 2008.
It’s also a lie. As Mike Whitney points out, in Counterpunch, “More than 84 percent of the sub-prime mortgages in 2006 were issued by private lending institutions. It was private-label subprime mortgages that triggered the panic in the secondary market that crashed the financial system.”
Were it not for Fannie Mae and Freddy Mac, the whole system would have quickly crumbled – and it is still held together only by constant interventions by the federal government and the Federal Reserve. Wall Street wants all these guarantees, subsidies and taxpayer gifts to come directly to the private sector, and that’s why Fannie and Freddie must go.
However, every act of this administration must include an insult to Black people, if at all possible. The Congressional Black Caucus, which has allowed itself to be totally neutered in the Age of Obama, beseeched this president to at least appoint a few of its favorites to high profile administration jobs, including some of its own members. In May, Obama obliged the Caucus, announcing that North Carolina Congressman Mel Watt was his nominee to head up none other than – the Federal Housing Finance Agency, whose sole responsibility is to oversee Fannie Mae and Freddie Mac, the two entities Obama intends to dismantle. Now that is just plain mean.
For Black Agenda Radio, I’m Glen Ford. On the web, go to BlackAgendaReport.com.
BAR executive editor Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.com.
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