Chief
08-04-2008, 06:19 AM
http://spectator.org/dsp_article.asp?art_id=13630
By Carl F. Horowitz
Published 8/4/2008 12:08:25 AM
In the world of investment, one of the main methods of moving a project forward is called "leveraging." By committing a modest sum of money, a funding source can be a catalyst for funds from other sources.
Leveraging also can bring to fruition projects of the wrong kind -- like the perpetual project of nonprofit far-Left groups to socialize the risks and rewards of mortgage lending.
Actually, the risk side already is heavily socialized. What the nonprofits want to do is rein in the rewards as well. The massive housing bill just passed by the House and Senate gives them that chance.
The legislation, already signed by President Bush, is the bitter harvest of political leveraging. Nobody seems to have fallen prey to it, ironically, more than the measure's two main beneficiaries.
The secondary-market mortgage firms Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, better known as "Fannie Mae" and "Freddie Mac," have brought on themselves a whole world of trouble.
WHILE THE DONATIONS to the Left by these mortgage giants haven't amounted to much, they've produced enormous costs.
There is nothing new about capitalists "donating the rope" (as Lenin would say) to their avowed enemies. That's how radical nonprofit networks such as Neighborhood Assistance Corporation of America (NACA), the Association of Community Organizations for Reform Now (ACORN), and the National Council of La Raza have become major players in policy-making.
These groups parlayed donations, on occasion obtained through methods legally resembling extortion, into political power.
Such groups regularly employ (or threaten) boycotts, lawsuits and media campaigns to wring concessions from their corporate targets. Business leaders who donate funds may think they are buying peace. But this "feed the beast" strategy works only in the short run.
Over the long run, these grants enable beneficiaries to ratchet up ongoing campaigns whose consequences diminish company productivity.
This dynamic can extend to an entire industry -- such as mortgage lending.
**SCHNIPP**
This a long, but comprehensive look at where we stand with Fannie and Freddie, and where things are likely to go from here with the legislation the President signed a last week.
If you think the mortgage mess looks grim now, wait a year till the cries for another bailout begin.
cewl
By Carl F. Horowitz
Published 8/4/2008 12:08:25 AM
In the world of investment, one of the main methods of moving a project forward is called "leveraging." By committing a modest sum of money, a funding source can be a catalyst for funds from other sources.
Leveraging also can bring to fruition projects of the wrong kind -- like the perpetual project of nonprofit far-Left groups to socialize the risks and rewards of mortgage lending.
Actually, the risk side already is heavily socialized. What the nonprofits want to do is rein in the rewards as well. The massive housing bill just passed by the House and Senate gives them that chance.
The legislation, already signed by President Bush, is the bitter harvest of political leveraging. Nobody seems to have fallen prey to it, ironically, more than the measure's two main beneficiaries.
The secondary-market mortgage firms Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, better known as "Fannie Mae" and "Freddie Mac," have brought on themselves a whole world of trouble.
WHILE THE DONATIONS to the Left by these mortgage giants haven't amounted to much, they've produced enormous costs.
There is nothing new about capitalists "donating the rope" (as Lenin would say) to their avowed enemies. That's how radical nonprofit networks such as Neighborhood Assistance Corporation of America (NACA), the Association of Community Organizations for Reform Now (ACORN), and the National Council of La Raza have become major players in policy-making.
These groups parlayed donations, on occasion obtained through methods legally resembling extortion, into political power.
Such groups regularly employ (or threaten) boycotts, lawsuits and media campaigns to wring concessions from their corporate targets. Business leaders who donate funds may think they are buying peace. But this "feed the beast" strategy works only in the short run.
Over the long run, these grants enable beneficiaries to ratchet up ongoing campaigns whose consequences diminish company productivity.
This dynamic can extend to an entire industry -- such as mortgage lending.
**SCHNIPP**
This a long, but comprehensive look at where we stand with Fannie and Freddie, and where things are likely to go from here with the legislation the President signed a last week.
If you think the mortgage mess looks grim now, wait a year till the cries for another bailout begin.
cewl