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The American people need to know how we got here.  These are serious times and we are at a potential turning point in this country.  Whatever happens, it is going to hurt, but its time for real leadership and real reform.

But in order to understand how to get out of this mess, we have to understand how we got here.  The Democrats are still trying to funnel money into bogus partisan programs (ACORN) instead of trying to fix the problem and protect the American taxpayer.  This is not George Bush’s fault. This is not John McCain fault.  Both of them tried to fix this mess before it blew up.  But the Democrats were too busy being paid off by Fannie and Freddie, supporting their liberal friends, and refusing to be accountable for their disastrous approach.  They were warned.  But they wanted to keep playing for pay, and all of us got burned.

This is the BEST video I have seen about the crisis. The most accurate, the most detailed, and backed up by facts. Its a little shy of 10 minutes, but is worth watching in its entirety. Watch it, pass it on to your friends. Link to it. Embed it. Do whatever you want. The media won’t tell you the whole truth. But here it is.

Last night, Barack Obama, Harry Reid and others complained that John McCain was playing politics with this crisis as negotiations broke down last night.  That’s apparently not true according to four independent sources.

Though Sen. Chris Dodd implied that Sen. McCain sandbagged the rest of the negotiators by bringing up alternative proposals, McCain himself did not bring up those proposals, according to four independent sources briefed by four different principals inside the meeting, including two Republicans and two Democrats.

“McCain has not attacked the Paulson deal,” said a third Republican who was briefed by McCain direclty. “Unlike the [Democrats] in the [White House] meeting, he didn’t raise his voice or cause a ruckus. He is urging all sides to come together.“

Sounds once again like John McCain is being a leader and trying to form a consensus while the Democrats and Barack Obama are just worried about themselves.

Aided by the New York Times with a spectacular piece of pathetic journalism, the Obama campaign has been trying to link McCain to the Fannie Mae problem, because one of his advisers, Rick Davis, had once done lobbying work for Fannie Mae.  The Times and the Obama campaign even assert that Davis made some money from Fannie over the past year, which the McCain campaign sharply rebuts.

The Times and Obama fail miserably at this pathetic hit job. Davis has not been a lobbyist since 2005 and has not received profit from his company since 2006.  Furthermore, Davis’ lobbying efforts didn’t cause Fannie Mae to fail.  Jim Johnson is another story all together.

Jim Johnson, to this day, is an adviser to Barack Obama. Jim Johnson was once the CEO of Fannie Mae, and made over $20 million for his work there and a sweetheart mortgage deal from CountryWide while leading Fannie Mae into disaster (at the expense of the American taxpayer).  Johnon pathetic management and potentially fradulent activites at Fannie Mae are partially responsible for the mess we are in now.  Yet Obama continues to call on Johnson for advise on how to deal with this crisis.

Furthermore, Barack Obama received over $120,000 in campaign contributions from Fannie/Freddie, averaging more than $30,000 a year.  John McCain received contributions from them too… at less than $1,000 per year.  As they say… follow the money.

Captain Ed has a great post at Hot Air comparing the relationships of both these men to Fannie Mae and the current presidential campaigns.  Rick Davis is not even remotely equivalent to Jim Johnson nor is there any evidence that Rick Davis is offering advice on the housing and economic crisis to John McCain.  Can Johnson and the Obama campaign make a similar claim?  Not hardly.

Brit Hume’s program had a good summary of how we got into this mess and the voices who tried to avoid it.  President Bush, John McCain, Secretary Snow, Greenspan all tried to get Fannie and Freddie under control and warmed that failing to do so could lead to a broad economic crisis.  Sound familiar?

But the democrats, Barney Frank, Chris Dodd and Chuck Schumer didn’t want to hear any of it.  They were too busy playing politics and turning a blind eye to real concerns.

And what has Barack Obama ever done to fix this mess before it broke?  Nothing.

Big Lizzards has a great post on Mortgage Backed Securities, why we are in this mess, and even makes the case for the so-called bailout.  It’s long and its good.  Read it for yourself.  If we are going to pass something, that is going to cost the taxpayers billions, then buying the securities and scrubbing them WITH NO OTHER EARMARKS might be the best of the bad solutions.

Read this and decide for yourself.

CHRIS CUOMO, ABC NEWS: A little surprising for you to hear the Democrats saying, “This came out of nowhere, this is all about the Republicans. We had nothing to do with this.” Nancy Pelosi saying it. She signed the ‘99 Gramm Bill. She knew what was going on with the SEC. They’re all sophisticated people. Is that playing politics in this situation?

BILL CLINTON: Well, maybe everybody does that a little bit. I think the responsibility the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.

Republicans did try to fix this. Several Republicans tried.  But the Democrats blocked every attempt, and encouraged riskier and riskier loans.  Now that house of cards has collapsed.

Want change?  Want to throw the bums out?  Make sure you know who the bums are.  Chris Dodd.  Chuck Schumer.  And all of the Democrats who towed the line for Fannie and Freddie, accepting thousands in campaign contributions and turning a blind eye to the mess.

Dave Ramsey has a solution to fix the current credit freeze and economic crisis, and it won’t cost $700 Billion.

Remember Enron, WorldCom, Adelphia, and other companies had artificially put assets on the books? They’d say something was worth $10M when they bought it, but eventually it decreased in value, and they never updated the value in the books. That was part of the fraud. Under current laws at that time, they were all convicted and put in jail for fraud.

Then we got all mad and made all these new laws that are coming out the wazoo called sarbanes oxley. It’s a huge, massive law but the idea is that we were going to mandate ethics to corporate America because apparently they didn’t have any, according to the Enron failure. It’s now a total pain in the butt to execute it in a publicly traded company.

It didn’t work because you can’t cause ethics to happen. However, it does make each company each day restate what their assets are worth if sold on the market. This accounting procedure is mark to market accounting–you need to remember that. It’s a good concept and keeps companies from having loaded balance sheets.

However, it’s part of what’s caused this in the news now. Merrill Lynch was sitting with $30 billion tied up in sub-prime loans with houses. Stupid! They get what they deserve for doing that, and I’m with you on that. Those houses didn’t become worthless all of a sudden because those people couldn’t sell their bonds. Since they couldn’t sell them, they basically gave them away for 22 cents on the dollar. Now do you think all those houses lost 80% of their value underneath that deal? No, they didn’t, so they gave them away for 22 cents on the dollar (about $6 billion total) because there was no market for them. Nobody wants to buy sub-prime bonds because they suck. They’re junk bonds. But at 22 cents on the dollar, it’s a bargain because even if you foreclosed on every one of the houses in there, you’d probably get $20 billion back out of $30 billion, and so the company that bought those for $6 billion got a deal! But there’s no market for them. That’s where these companies are stuck. They can’t sell this stuff, but accounting-wise, they’ve had to mark it down to market and it’s frozen the marketplace.

And he’s exactly right.  As a (now former) mortgage company owner, my father (who has been in the business for almost 15 years) and I were actually discussing this the other day.  Just because people aren’t lining up to buy mortgage securities at the present time doesn’t mean they are worthless.  If you have $100 Million of mortgages in a pool, even if every single home went into foreclosure and the mortgages were at 100% of their value, you would still get a return.  It may not be 100%, but it also wouldn’t be zero.

But if you have $100 Million in mortgage securities on your books, you have to have about $100 Million more in liquid assets just to offset the mortgage securities because in today’s climate due to SOX, it would be worth close to zero.

Because you have to restate asset value virtually every day, you can’t wait it out for the value to return or the mortgage to be sold.  They are a drag on the books and tie up capital that could be used for something else.  Thus there is a freeze in additional lending and companies with plenty of assets on the books appear insolvent on paper, all due to accounting standards.

Paulson and the President are right, we do need to have someone unclug the lending sink.  But Ramsey may be right and it could be done without costing the tax payers a dime.  Repeal, even temporarily, Sarbanes Oxley, and let’s get the system flowing again.

Jim Johnson, failed CEO of Fannie Mae, whose very policies and “leadership” helped create the current mortgage crisis, and got his own sweetheart deal from CountryWide, is STILL advising Barack Obama.

Best line of the day thus far:

Here is the architect of the self-destruction of Fannie Mae constructing the Obama presidency.

Sad, but true.  While Barack Obama and the complicit media try to paint John McCain as Bush 2.0 (which is laughable really).. Barack Obama actually lives his own campaign attack “more of the same”.  We are in an absolute financial crisis in this country that was precipitated by the mortgage and credit collapse.  And Barack Obama is being advised by one of the architects of the failure.

The death of conservatism? The death of capitalism? The death of free markets or deregulation?

I’ve heard it all, but none of it is true. Certainly we are mourning loss in our country, but its not capitalism, fiscal conservativism or even the banking industry that has died. We have lost something much more important to the foundation of our society. We should have seem it coming, for the better part of a century its been dying a slow death. But with the proposed bailouts and political posturing across both sides of the aisle… now talking about adding credit card debt, student loans and car notes to the bailout mix… it is unquestionably dead.

R.I.P. Personal Responsibility.

Is the bailout right? No. Is it necessary? Maybe. Would I vote for it? No. If you don’t have your principals in a crisis, then you are not very principled at all. In fact, I would suggest that your principals are more important in a time of crisis where you can’t see the valley through the trees and you need some guidance. It is then, when you are lost, that it is even more important to have something to rely on, something to lead the way.

Whether you are the homeowner struggling to make a mortgage payment, the recent graduate burdened with thousands of student loan debt, or the Chairman of the Senate
Banking Committee who has taken $160,000+ from Fannie and Freddie and obstructed multiple attempts to fix the system… where is your personal responsibility?

If you are the guy who voted four times for infanticide and supported a bill with sex education in kindergarten… why aren’t you standing up for your votes and ideals instead of lying about them and lying about the people who reveal them? Where is your personal responsibility?

If you are the guy who was for amnesty, and then wasn’t, and then kind of is again… who sought nuance and a bit of vacillation over the past week regarding the economy, where is your personal responsibility?

Of course I know the answer to that, its loss has affected virtually all of us and permeated our daily lives. Personal responsibility is dead, and liberalism killed it.

Arguably it started during the “new deal” maybe it was before. But for the better part of a century, personal responsibility has been sick, and now it is gone.

Need to save money for retirement? The federal government will take some of your money every month and then give it back to you when you need it.

Need help because you lost your job? The government will take money from all employers and then pay you when you find yourself out of work.

Get hit by a hurricane? The government will give you money, aid, and even a place to live for years because its better for them to give you everything than for you to do for yourself.

Want to take advantage of all of the wonderful blessings in our country… its ok to come here illegally, if you don’t break too many other laws, we won’t consider you a criminal.

Shall I go on?

What happened to our country? We are a nation of pioneers, which started in a tax revolt, which sought to overcome the burden of a large government and gain religious freedom. Yet in 222 years, we have become exactly what we left… an over-taxed, over governed people where religion (at least Christianity) is persecuted and must remain hidden from public view at all costs.

When I played high school football, we worked hard to get to the playoffs every year. One loss or one tie against a division rival, and we might not make it to the post season. Now, every team in the state goes to the playoffs so nobody feels left out, even if they lost every game.

The college I graduated from allows first year students to have a course expunged from their record if they fail. It is erased as if it never happened, so go ahead skip class and enjoy college life.

The Chairman of the House Ways and Means Committee (the same committee that writes tax code) has been cheating on his taxes for a decade or two. Yet he gets to keep his influential place of power, and gets a slap on the wrist. Listen to him, and he’s the victim even though he committed the crime.

Don’t like your mortgage? It’s the lender’s fault.

Home lost value? It’s the realtor’s fault.

Don’t want to pay your credit card debts? You don’t have to.

Don’t want to pay your student loans? That’s ok too.

Want to go to college? The government will give it to you for free.

Want health care? They’ll give that to you too.

Underwrite bad loans… the government will bail you out. But it didn’t start or stop there. If the customers who took out the loans were responsible for their debt and didn’t take on more than they could afford, we would not have that problem in the first place.

A government that gives you everything can take everything away. But the overbearing government isn’t the only problem with that statement. If the government gives you everything, then you are responsible for nothing, and that lack of responsibility permeates the rest of our lives.

Why are we so upset when a CEO gets a golden parachute to leave a failed company when we expect homeowners to get bailed out of a mortgage they can’t pay? What’s the difference? It all amounts to personal responsibility. And in the United States of America today, personal responsibility is gone.