The Bailout and ACORN

There is at least one fact that all the various warring parties of the current financial crisis can agree upon. We have big problems and we haven't got a lot of time to fix them. Watching the legislators parading in front of the TV cameras the last few days makes it seem as though we have all the time in the world to play the blame game and point fingers.

The easy answer, and the one that the Democrats want us to believe is that it's those out-of-control (read non-regulated) Wall Street cowboys who have caused all the problems. But while Wall Street may well have more than its share of greed and excess, it is generally pretty good at assessing risk and making risk/reward decisions. It's hard to get rich lending money to borrowers who aren't going to pay it back.

Writing in this morning's Globe, JEFF JACOBY does an excellent job of succinctly connecting the dots of the mortgage crisis. He describes how the roots of the problem go back to the bleak days of the Carter administration when concerns over the practice of "red-lining" lead to the passage of The Community Reinvestment Act that forced lenders to loosen their standards which started the long slide into the sub-prime mess. This was encouraged by Fannie Mae and Freddie Mac who purchased much of this low quality paper. One of the biggest cheerleaders for these two government-chartered institutions was Massachusetts' own (by way of Bayonne) Congressman Barney Frank, who badly wants to place the blame elsewhere. As Jacoby sums it up:

Now that the bubble has burst and the "systemic risk" is apparent to all, Frank blithely declares: "The private sector got us into this mess." Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he'll find one suspect in the nearest mirror.


The juxtaposition of the ongoing Bailout negotiations and the first presidential debate on Friday night overlapped in a number of different ways besides the fact that John McCain had almost been a no-show due to his involvement in the negotiations. One of the main stumbling blocks in hammering out a bill has been the inclusion in both the House and Senate Democratic drafts, of a provision to funnel significant funds from the bailout plan to a pair of government slush funds used to transfer government money to advocacy groups such as ACORN. These provisions may or may not survive into the final version of the bill, but their inclusion, as explained in a WSJ EDITORIAL provides a look at the Democratic stealth efforts at funding this controversial organization with a radical left-wing agenda.

ACORN, The Association of Community Organizations for reform Now, uses community organizations to pursue its agenda for social change. Its tactics and strategies however often border, and sometimes cross the line, on the illegal, especially with respect to their efforts at registering Democratic voters as well as their partisan participation in election activities. Adding another link to this daisy chain of intrigue is the fact that Barack Obama has been actively involved with ACORN as well as a similar organization, the Chicago-based Gamaliel Foundation. While this aspect of Obama's background is generally known in conjunction with his experience as a "community organizer", which is generally seen as a marginal activity. But there are at least two aspects of this that need to be examined.

Writing in the September 1st issue of National Review, Stanley Kurtz looks closely at the goals of ACORN and Gamaliel to highlight their radical left objectives. These consist primarily of schemes for economic redistribution through the government rather than programs to better prepare low income people to better themselves. But the interesting point uncovered by Kurtz is the lengths to which these organizations go to disguise their intentions behind a facade of down-to-earth pragmatism. Kurtz concludes:

"Obama needs to detail the nature of his ties to both Gamaliel and ACORN, and should discuss the extent of his knowledge of Gamaliel's guiding ideology. Ultimately, we need to know if Obama is the post-ideological pragmatist he sometimes claims to be, or in fact, a stealth radical."