Sunday, January 29, 2012

A Foreigner Responds to The State-of-the-Union Address

British publications frequently offer some of the sharpest and most plain-spoken commentary on American politics.

Take, for example, this piece by Christopher Booker, a Sunday Telegraph columnist, on his reaction to President Obama's State of the Union address - How I woke up to the untruths of Barack Obama:

When I happened to wake up in the middle of the night last Wednesday and caught the BBC World Service’s live relay of President Obama’s State of the Union address to Congress, two passages had me rubbing my eyes in disbelief.

The first came when, to applause, the President spoke about the banking crash which coincided with his barnstorming 2008 election campaign. “The house of cards collapsed,” he recalled. “We learned that mortgages had been sold to people who couldn’t afford or understand them.” He excoriated the banks which had “made huge bets and bonuses with other people’s money”, while “regulators looked the other way and didn’t have the authority to stop the bad behaviour”. This, said Obama, “was wrong. It was irresponsible. And it plunged our economy into a crisis that put millions out of work.”

I recalled a piece I wrote in this column on January 29, 2009, just after Obama took office. It was headlined: “This is the sub-prime house that Barack Obama built”. As a rising young Chicago politician in 1995, no one campaigned more actively than Mr Obama for an amendment to the US Community Reinvestment Act, legally requiring banks to lend huge sums to millions of poor, mainly black Americans, guaranteed by the two giant mortgage associations, Fannie Mae and Freddie Mac.

It was this Act, above all, which let the US housing bubble blow up, far beyond the point where it was obvious that hundreds of thousands of homeowners would be likely to default. Yet, in 2005, no one more actively opposed moves to halt these reckless guarantees than Senator Obama, who received more donations from Fannie Mae than any other US politician (although Senator Hillary Clinton ran him close).

I have two bones to pick with the above paragraph. First, not to take anything away from Obama, but it is Congressman Barney Frank who deserves the title of Fannie Mae's most active defender on Capital Hill in 2005. Watch the video of Frank, then the ranking Democrat on the House Financial Services Committee, assuring the House that "you're not going to see the collapse that people see when they talk about a [mortgage] bubble."

Second, Booker understates exactly how much money Obama received from those government-sponsored mortgage associations. According to, Obama was the second-biggest recipient of all Fannie Mae and Freddie Mac campaign contributions for the years 1989 to 2008. That's especially impressive when you recall that Obama was not sworn in as a U.S. Senator until 2005, and was elected to the Illinois State Senate only in 1998. The only office-holder who received even more boodle from the mortgage bankers was Christopher Dodd, who had been a U.S. Senator since 1974, and who, as Chairman of the Senate Committee on Banking, Housing and Urban Affairs, could give Fannie Mae and Freddie Mac the best return on their influence investment. FYI, Senator Hillary Clinton was the 12th biggest recipient, which is not far behind. 

Booker continues:
A few months after Obama entered the White House, I suggested here that the slogan on which he was elected – “Yes we can” – seemed to have changed to “No we can’t”. It was already obvious that, having won election as an ideal Hollywood version of what “the first black President” should look and sound like, he was in reality no more than a vacuum. His speech last week was as weaselly as any politician’s performance could be, not least in its references to the sub-prime scandal.

I sense a little typical English reserve there, don't you? Hey, don't sugarcoat it for your American readers, Mr. Booker, tell us what you really think.


Anonymous said...

Great post TSB! I had no clue how badly I was getting fooled in 2008 by supporting Obama... but it was a lot of fun compared to the alternatives we had. No fun this year though.. the corporate establishment still has the bit in their teeth and stampeding toward the cliff. (where asia abandons the dollar and says no to our bonds)gwb

Anonymous said...

TSB: For all of your loyal readers who use this as a jumping off point to your blog roll could you install one of those things like diplopundit has that tell you how long ago the blogs were updated? If it costs money tell STATE it will save searching time all over the world! Thanks! gwb

TSB said...

GWB: Now that you have drawn my attention to that update time stamp feature, I have got to figure out how to add that. I like it. Thanks!