Henry Paulson’s liberal bank is taking over.
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GOLDMAN ALUMNUS Robert Rubin presided over the Clinton administration’s effort to put the Carter-era Community Reinvestment Act on steroids. The CRA punished lenders if they limited lending to wealthier, more creditworthy markets, a practice called “redlining.” As President Clinton’s Treasury Secretary, Rubin led the administration’s push to force risky subprime loans on lenders and to aggregate those subprime mortgages for sale as mortgage-backed securities.
Although liberals like to claim the CRA is in no way responsible for the current market troubles because it didn’t apply to all lenders, that’s nonsense on stilts. The CRA encouraged all lenders to loosen underwriting standards “in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults,” according to University of Texas economist Stanley Liebowitz.
As late as 2004, Rubin was vigorously defending the CRA, arguing against a proposed relaxation of the rules by the Federal Deposit Insurance Corporation. “These new rules may be the first step in an effort — long pursued by some in Congress — to dismantle the act, piece by piece,” he wrote.
Rubin even dressed up the law in fiscally conservative garb for the New York Times, bragging that since the CRA was created it “has prompted banks to channel more than $1 trillion into reinvestment projects — without requiring a single dollar of Congressional spending.”
The CRA that Rubin so strongly supported also encouraged activists such as Neighborhood Assistance Corporation of America (NACA) CEO Bruce Marks, a self-described “bank terrorist,” to agitate by giving them the power to make trouble for banks that failed to lend enough money to so-called underserved communities.
Community groups like NACA, National Urban League, National Community Reinvestment Coalition, ACORN, National Council of La Raza, and the Greenlining Institute have used the CRA to shake down banks for billions, and possibly, trillions of dollars in loans by holding up bank mergers and expansions.
The left-wing National Urban League, headed by former New Orleans mayor Marc Morial, is now demanding that Paulson refute recent statements by CRA critics that subprime mortgages provided to minorities led to the financial crisis and a $700 billion federal bailout of Wall Street. “It’s an effort to shift the climate away from deregulation and the lack of oversight,” Morial said.
In 2000 when Paulson ran Goldman Sachs, the company’s charitable foundation gave the CRA enthusiasts at the National Urban League $50,000. My guess is Paulson will take the Urban League’s calls
GOLDMAN SACHS ALSO AIMS to profit from stricter environmental regulation, as Fred Lucas wrote in his October 2008 Foundation Watch profile of the most powerful company in Washington. When Paulson headed Goldman, the company released a position paper endorsing global warming alarmism and carbon trading. “Voluntary action alone cannot solve the climate change problem,” it declared.
Paulson came under fire while he was at the helm of Goldman for donating 680,000 acres of land owned by his company in Chile’s Tierra del Fuego to the Wildlife Conservation Society. Paulson had a conflict because when he transferred the Goldman-owned land, he was chairman of the Nature Conservancy at the same time.
And it was Paulson who persuaded the president to drop his threat to veto the housing bailout bill this summer even though it provided for a $5 billion “slush fund” for radical nonprofits. That taxpayer money will go to housing subsidies, financial counseling, and mortgage restructuring programs, some of which are bound to end up under the control of political advocacy groups such as ACORN, the National Council of La Raza, and California’s Greenlining Institute.
Goldman has also endorsed mandatory government limits on carbon emissions and would probably reap huge profits from the cap-and-trade emissions control policy that both Barack Obama and John McCain have endorsed. With its eye on potentially lucrative carbon trading, in 2006 Goldman paid $23 million to purchase a 10% interest in the Chicago Climate Exchange, the only U.S. exchange that conducts trading in carbon offsets.
Experts say the U.S. carbon emissions market could be worth $1 trillion annually by 2020, but trading in carbon offsets won’t generate much profit unless the federal government forces corporations to participate in the trading scheme. It’s in the interests of Goldman, which as of 2007 had committed at least $1 billion to “carbon assets” alternative energy projects, to lobby hard for carbon controls.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?