“The goal is, everybody who wants to own a home has got a shot at doing so.”

Sunday, October 12th, 2008

Via Billy Beck in the comment section, the quote above is from President Bush in June 2002.

Makes it a bit difficult for the right to put all of this at the feet of Chris Dodd and Barney Frank.

More from the same speech:

We are here in Washington, D.C. to address problems. So I’ve set this goal for the country. We want 5.5 million more homeowners by 2010 — million more minority homeowners by 2010. (Applause.) Five-and-a-half million families by 2010 will own a home. That is our goal. It is a realistic goal. But it’s going to mean we’re going to have to work hard to achieve the goal, all of us. And by all of us, I mean not only the federal government, but the private sector, as well.

And…

And so what are the barriers that we can deal with here in Washington? Well, probably the single barrier to first-time homeownership is high down payments. People take a look at the down payment, they say that’s too high, I’m not buying. They may have the desire to buy, but they don’t have the wherewithal to handle the down payment. We can deal with that. And so I’ve asked Congress to fully fund an American Dream down payment fund which will help a low-income family to qualify to buy, to buy.

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29 Responses to ““The goal is, everybody who wants to own a home has got a shot at doing so.””

  1. #1 |  Below The Beltway » Blog Archive » The Sub-Prime Crisis Is A Bipartisan Disaster | 

    [...] Radley Balko Related PostsAre Things Bound To Get Worse [...]

  2. #2 |  Kyle | 

    Can’t trust either party.

  3. #3 |  j.d. | 

    99 days man. hang in there. i’m sure as hell trying to.

  4. #4 |  Frank N. Stein | 

    Then there is this:
    http://www.presidency.ucsb.edu/ws/index.php?pid=51448

    “Today, all across the country, I say to millions of young working couples who are just starting out: By the time your children are ready to start the first grade, we want you to be able to own your own home. All of our country will reap enormous benefits if we achieve this goal. Homeownership encourages savings and investment. When a family buys a home the ripple effect is enormous. It means new homeowner consumers. They need more durable goods, like washers and dryers, refrigerators and water heaters. And if more families could buy new homes or older homes, more hammers will be pounding, more saws will be buzzing. Homebuilders and home fixers will be put to work.

    When we boost the number of homeowners in our country, we strengthen our economy, create jobs, build up the middle class, and build better citizens.”

    ..

    “H.L. Mencken once wrote that, “a home is not a mere transient shelter, its essence lies in its permanence, and its quality of representing in all its details the personalities of the people who live in it.”

    What we are doing today will allow more homes to be blessed by more families. I hope it will start all these young people on a path that will take them to great joys in their personal lives, and perhaps to other homes, but something they will always know that their country wanted them to have because they were entitled to it as a part of the American dream.”

    President Bill Clinton, 1995

    Just a reminder for any one who thinks there is any substantive difference between the two major parties.

    P.S. Did you like how the grand shyster quoted Mencken, a man diametrically opposed to the shelter socialism he’s offering? These guys are pros.

  5. #5 |  freedomfan | 

    The things that seem likely to me, reading the story:

    When it was their turn at bat, Republicans left in place the CRA rules that encouraged lending to people who couldn’t yet really afford a loan. Whether or not the rules would have been there without Democrat support, it’s not especially accurate to say that Democrats alone were supporting them. Moreover, though the 1995 CRA change was before W. Bush’s time, the ADDI (subsidized downpayments) was another (though smaller) step in the direction of government helping people get houses they couldn’t afford. He especially seemed keen on the idea of making it easier to get a high-risk mortgage, err, home.

    Good intentions alone aren’t worth the paper you meant to write them on. Every politician in this debacle was probably hoping some good would come out of government bullying the lenders and subsidizing unqualified borrowers. That’s nice, but it doesn’t ultimately change the outcome. I really think there is too much emphasis put on the good intentions of government programs, when it’s really irrelevant next to the actual impact of the programs. “We are doing this to help people.” Yes, but you can’t legislate prosperity and happiness and the program’s actual effect has a predictable downside that people are ignoring because of the focus on what it’s “supposed” to do. Good intentions don’t change government intervention into good policy.

  6. #6 |  bobzbob | 

    The problem today is not the mortgage market, that is just the trigger. Those focussing on the mortgage market are trying to distract you from the real problem, which is the $60 trillion dollars of speculation in credit default swap contracts that has created a huge potential for crash the likes the world has never seen. The “bailout” plan is nothing more than an attempt to prop up the first domino of the CDS crash.

  7. #7 |  Abominable_Hillbilly | 

    Jeez, man. The American Dream program isn’t anything even close to Barney Frank’s hard work at thwarting oversight of Fannie and Freddie.

    So the government (“Bush”) might help folks get a down payment for a house. That’s radically different than the government (“Frank”) ensuring that sub-prime, interest only loans be given to people who are leveraging themselves at 73% of their gross income.

    I understand you dislike Bush. I certainly have my qualms with his administration as well. Your words, however, would carry more weight if you didn’t let your dislike of the man cloud your judgment.

  8. #8 |  Don't_tread | 

    I agree with Hillbilly. You’ve made it quite clear that you don’t like Bush, and there are some good ones to dislike him and his brand of Republicanism. However, for anyone remotely in the libertarian corner of Nolan’s chart to cheer or encourage a Democratic victory is at best strange.

    While the R’s at least pay lip service to economic freedom, and occasionally act on it, the D’s commitment to personal liberties is usually in the form of identity politics (for example, “hate crime” legislation or special rights for protected groups). Biden himself is a good example of how D’s are easily willing to trade away individual rights for political expediency.

    There is a strong streak of the leave-me-alone crowd included in “right-wing” politics, see for example the recent Reason article on defeating Real ID. Since the best candidate (Barr) doesn’t have a realistic chance, libertarians would do well to encourage the growth of the “good” side of the Republican party. The D’s have nothing to offer.

  9. #9 |  Simon Lefaux | 

    My question is why would Bush push this through?

    I’m sure I will pelted with rocks, garbage, and balled up tin foiled hats, but I have a theory.

    I think there was a connection to the S&L scandals and the funding of CONTRAS. Yes, congress eventually funded the “Reagan Doctrine”, but when Iran/Contra was put into motion that wasn’t a done deal. So I think some of the drug and gun money was being funneled and laundered through many of the banks involved. I know my basic premises might too shaky to make any real jump to a conclusion, but I feel the “sub-prime crisis” was really a push by the Bush administration to flood the markets with all of these mortgage securities to give the impression that the American economy was strong, thus, making it easier to borrow money to fund their wars.

    It’s just a theory, so I’m most likely wrong, but, again, why would Bush push for more risky lending? Greed and incompetence can never be ruled out, but didn’t the White House say in the first days of “the crisis” they already had a bailout in the wings? Just makes me wonder.

  10. #10 |  thorn | 

    Simon, it’s definitely looking like a tinfoil moment. Flooding the market with worthless securities hasn’t given anyone the impression that the US was worth lending to. The US economy has been collapsing under bad debt for the past 2 years.

    The events of the past 2 weeks aren’t a new result. It’s a natural step in the process of lending money to borrowers who don’t (and never did) have the means to repay the loan. People earning $20K/year who bought 4 houses in hopes of “flipping” them have far more to do with the problem than funding some more wars.

  11. #11 |  random guy | 

    I liken this whole thing to one guy lighting a very long fuse on a powder keg and leaving, and another guy sitting on the powder keg watching the fuse and saying “Its not my fault this thing was lit”.

    Both parties have contributed to the current mess, but for the last eight years only one of them has had the real power to act and soften the financial crisis. They choose to ignore it, and at points simply blame the problem on people no longer in power.

  12. #12 |  freedomfan | 

    I don’t speak for anyone else, but I’d like to say that voting for candidates even when they are not representing your views well is an especially ineffective way to encourage them to represent your views better. Particularly for people with libertarian views, the only way to get politicians from the big media parties to take up your cause is to vote for someone who does represent your views (whether he “can win” or not), so that the two parties understand that your vote is not theirs when they promote more regulation and bigger government. When they start to lose elections, they will worry about how to earn your vote.

    Otherwise, politicians of either party seem perfectly happy to fall into the Washington rut of trying to pretend they have the solution to everything, and they just assume that the people who care about freedom and Constitutional government will vote for them anyway because “the other guy is worse”. Well, when the two parties put forth candidates who are awful (as is currently the case), then giving your vote to the “less worse” one only teaches the parties that awful is good enough to win, which is all they care about.

    You’ll never get a candidate who is really pro-freedom if you are always willing to compromise and vote for a big-government statist. For conservative-leaning libertarians (as I assume a couple people in this thread are), think about it as similar to welfare: You don’t teach someone to go out and do productive work when you send him a check for doing nothing.

  13. #13 |  Don't_tread | 

    Freedomfan,

    I’ve been involved in libertarian politics since the MacBride campaign, what you’re posing is an excellent position, and indeed what I have advocated myself for many years.

    However, after nearly 4 decades of electoral disappointment, it is clear to me that there is simply not enough support among the public to make a third party based on libertarian principles viable.

    I’ve heard numbers of 10% possible support, in a proportional representation system as is common in Europe, the LP could have a significant role in national politics. However, in the winner take all system of American politics, diverting 10% of the votes from the candidate that supports slightly less government simply ensures that the candidate that supports more government will win.

    American political rules mean that, of necessity, the big parties are coalitions, the best we can hope for is to nudge them continuously in a direction more favorable to liberty. In my opinion, the better party to nudge is the GOP. The Democrats are firmly wedded to the idea of big government and state control of nearly everything, while the bad Republican cultural tendencies (drug enforcement, morality laws) will diminish over time as the culture changes.

    I admit, this election makes support for the GOP particularly difficult, McCain offers most of the bad things about Republicans and few of the good, but I’m afraid of what will happen if both Congress and the Presidency are controlled by the D’s

    Radley, sorry to hijack this threat about home mortgages.

  14. #14 |  Simon Lefaux | 

    Thorn,

    Maybe, but I don’t see how it was flippers effecting the world wide economy more than the securities traders. Didn’t someone refer to credit default swaps as “financial weapons of mass destruction”?

    I could be wrong, but I feel Administration was inflating the economy for short term gain to help fund the war, knowing that when the crash came they would bail out their friends.

  15. #15 |  scott | 

    uh huh, and Obama was suing banks for not making enough subprime loans – http://www.youtube.com/watch?v=1RZVw3no2A4

    and here’s Clintons HUD secretary glorying in forcing banks to make bad loans – http://hotair.com/archives/2008/10/12/the-quotes-that-explain-the-entire-financial-meltdown/

    the whole time Bush was in office he had at best a slim majority in Congress, not enough to re-form Fannie and Freddie or anything else.

    there is LOTS to complain about Bush, but anybody who thinks Dodd and the other criminals who prevented the Bush administration and McCains bill in 2005 from getting to the floor of the Senate are going to change their ways under Obama is dreaming. already the Dems are talking about another wave of “stimulus”. guess what, all of it is going to be paid for on the backs of people who WORK, and all largess will go to organizations like ACORN. that’ll help a lot, won’t it.

  16. #16 |  bob | 

    Both halves of the our one party political system industry share blame for their irresponsible laws and spending.

    Today, I dislike Bush & Co. to a greater degree than the other half simply because they repeatedly lie when they attempt to paint themselves as significantly more fiscally conservative than the other half.

    It’s also disappointing that in a speech designed to gain applause for the theft of millions of tax dollars from responsible citizens, the Thief Executive also tries to drum up support for his disastrous and expensive imperial foriegn policy.

    From the same speech…

    See, I tell people — and I believe this — that out of the evil done to America will come some incredible good. (Applause.) You know, they thought they were attacking a country so weak and so feeble that we might file a lawsuit or two, and that’s all we’d do. (Laughter.) That’s what they thought. We’re showing them the different face of America. We’re showing them that we’re plenty tough. When it comes to taking somebody trying to take away our freedoms, we’re tough, and we’re going to remain tough and steadfast. (Applause.)

    Yup, to the missing village idiot from Crawford TX, the PATRIOT act is “incredible good.”

    You tell ‘um W, when it comes to taking away freedom, be it money or basic rights, NOBODY but the U.S. Government’s gonna do that on your watch!

    Heads they win, Tails we lose… Happy Voting!

  17. #17 |  PersonFromPorlock | 

    Maybe the Democrats started it with their reckless social engineering and the Republicans let it continue through sheer spinelessness (and maybe the thought that they, too, could buy votes), but business was nothing loathe to pick up the ball and run with it.

    I dunno. Maybe it really is lamppost-and-tumbrel time. Anyone have a less drastic suggestion for how to get our betters to take their responsibilities seriously?

  18. #18 |  Marxist of the year « The Quick and the Dead | 

    [...] Balko steals from the best too. Note “Frank N. Stein” in the comments, quoting the Dick from [...]

  19. #19 |  Andrew Williams | 

    Laugh about it, shout about it but when you’ve go to choose–any way you look at it, you lose.

  20. #20 |  Rob | 

    If the Democrats blew it all up with the 1977 Community Reinvestment Act, they used one hell of a long fuse.

    Anyone know what percentage of the failing subprime mortgages were issued by entities regulated by the CRA?

  21. #21 |  freedomfan | 

    Dont_tread, it doesn’t matter if the third party candidates never win. Please don’t think that my position is depends on Barr or the next LP candidate ever winning. It does not. The reason we need someone like Barr to get 5 or more percent of the vote is not because that would mean he wins. It’s because that’s the level at which the two parties, out of their own interest, have to pay attention to libertarian ideas or face losing elections time after time.

    American political rules mean that, of necessity, the big parties are coalitions, the best we can hope for is to nudge them continuously in a direction more favorable to liberty. In my opinion, the better party to nudge is the GOP.

    That’s exactly what I am talking about. You think the GOP is the party to nudge, so let me be clear: You will never nudge the GOP toward a more libertarian platform as long as they think they will get your vote even when they ignore you. I don’t know how to make that more clear. If you want a more libertarian-leaning GOP, you absolutely cannot give the GOP your vote when they are statist. Every vote for statist GOP is telling the party that, during the next election, they can ignore libertarian concerns because they get those votes anyway. The next time they propose a huge welfare expansion like the prescription drug benefit, keep in mind that they only did that because they’ve learned it doesn’t cost them any votes.

    It’s your choice, but there is no getting around the fact that voting for a statist, pro-big-government candidate tells the party that they can count on your vote next time with the same sort of candidate. And, if you allow yourself to be co-opted by the “we know you want a pro-freedom candidate, but vote for this dweeb because this election is too important to lose” line, then you will never get what you want because there will never be an election where that argument isn’t used.

    (I’m also sorry for veering off the “which party is was worse on mortgages” discussion, but the overlap between these issues is inevitable.)

  22. #22 |  CL | 

    Consider the possibility that all along, these harmful policies have been supported by the NAHB, NAR, mortgage brokers and pretty much everyone else who got a real piece of the action.

    Also, consider that risk-based pricingpossibly created an incentive for mortgage brokers to sell high-interest (“sub-prime”) loans to folks who could have qualified for a better deal (i.e., better interest rate). And don’t forget that a “sub-prime” loan, one that carries high risk of the borrower defaulting, could be made to anyone in any income bracket and of any race.

    If the Democrats blew it all up with the 1977 Community Reinvestment Act, they used one hell of a long fuse.

    Agreed. The 1977 CRA was originally not enforced unless a community group pushed the issue. It was, and still is, limited to FDIC-insured depository institutions, as its original intent was to ensure that banks were making loans in the same zip codes from which they were also taking deposits.

  23. #23 |  Greg C | 

    Bush was always pushing “The Ownership Society”, with expanding home ownership a main goal. Any Republicans who want to put all of this on Democrats are, well, typical Republicans.

  24. #24 |  Greg C | 

    I just saw a McCain commercial blaming “liberals” for the sub-prime crisis. The reason? Liberals don’t like regulation!

  25. #25 |  melvin polatnick | 

    The big secret is out. Politicians and the media were hiding the fact that American households have a net worth of over 56 trillion dollars. That is more than half the household wealth of the world. Those statistics come from the Federal reserve Flow of Funds Summary Statistics Second Quarter 2008. If there was a way to get the hoarders of those bucks to go on a long shopping spree the recession in the U.S. would quickly end. But our politicians fear talking to those idle saving account owners and their potential to stimulate our economy, they would rather increase the national debt than anger millions of cheap voters. Consumer spending determines the health of the economy not inflationary government handouts. Until some miserly Americans start digging into their over loaded bank accounts and start spending money our recession will continue indefinitely.

  26. #26 |  wallster | 

    This is all a red herring. Fannie/Freddie and the CRA are just scapegoats to distract folks from the fact that the subprime/mortgage crisis has more to do with the free market and too loose monetary policy than the GSEs.

    Every dollar of the $700bln bailout package will go to buy securities that were structured, purchased, and rated by private profit-seeking entities and were comprised of loans that lenders thought they would be making a profit on. If the GSEs weren’t willing to lend or guarantee the conforming stuff, the private sector would have filled the void (as these are much less risky than the non-conforming crap they actually did write).

    I’m not defending Fannie and Freddie, maybe they should never have existed and maybe there should have been more oversight, but the vast majority of the current crisis resulted from very poor decisions being made by private entities in the pursuit of profit, not because they were forced to by the government.

  27. #27 |  Lee | 

    Interesting article in today’s paper.

    The headline is “Cheaper housing push not to blame.”

    http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-Fannie_13bus.State.Edition1.ddae60.html

    Interesting read.

  28. #28 |  ABC | 

    Last time I checked Bush was not running on the Repub ticket. The person at the top of that ticket seems to have tried(?) to do something about the problem years ago.

    Bush may suck for keeping his veto pen up his ass and creating massive new programs BUT this problem is one of the few government created problems that breaks heavily to one party.

  29. #29 |  Don't_tread | 

    Freedom fan – again, an excellent argument, and one that is particularly apt in this election season, when the Republican nominee is truly from the statist wing of the GOP, whose favorite model is the obnoxious Teddy Roosevelt.

    However, let me turn the argument around. In a coalition 2-party system there will never be a major party candidate that is not more statist than libertarians would prefer. Even Ronald Reagan, IMO the most libertarian-friendly president of modern times, did some abhorrent things (think War on Drugs).

    My point is that your argument will always be true. Imagine that Bob Barr captures 5% of the vote this year and the GOP loses – the next year they see the light and nominate a candidate slightly more libertarian leaning than McCain (I know this is a pretty low bar), will LP voters then return their votes to the GOP? Following your argument probably not, so the GOP would have every incentive to write off the libertarian vote and simply move more left to capture a sufficient majority.

    I believe the time to fight is during the primaries, as organizations such as the not very effective RLC and more effective Club for Growth do, by strongly supporting the most libertarian of the GOP candidates. Then, in the general election, support whichever major party candidate is, in balance, a bigger friend to liberty.

    All that said, although I believe Obama would be far worse in expanding the reach of the state, I still haven’t decided whether I can hold my nose and vote for the authoritarian McCain.

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