Two years ago, I warned that, because of the subprime lending mess, because of the lax regulation, that we were potentially going to have a problem and tried to stop some of the abuses in mortgages that were taking place at the time.
Last year, I wrote to the secretary of the Treasury to make sure that he understood the magnitude of this problem and to call on him to bring all the stakeholders together to try to deal with it
Obama again said the same thing in the second debate. The key here is the context. His comments were in response to Senator McCain talking about Fannie Mae and Freddie Mac how these two GSE's were a major cause of the current financial crisis. Obama has repeatedly said he wrote this letter warning of these problems.
Well, I found the letter. Here is the link to the letter on Barak Obama's Senate website.
Barak did write a letter, but it has nothing to do with the context the current financial crisis. The opening reads as follows:
Dear Chairman Bernanke and Secretary Paulson,
There is grave concern in low-income communities about a potential coming wave of foreclosures. Because regulators are partly responsible for creating the environment that is leading to rising rates of home foreclosure in the subprime mortgage market, I urge you immediately to convene a homeownership preservation summit with leading mortgage lenders, investors, loan servicing organizations, consumer advocates, federal regulators and housing-related agencies to assess options for private sector responses to the challenge.
The rest of the letter goes on to detail what he thinks should happen at this "summit" and what should be discussed. Nowhere did the letter point out how these foreclosures are at the heart of a coming financial crisis. He did point out that lower income people were losing their homes, and more would if something was not done. While it is admirable that Obama showes concern for the poor losing their homes, this cannot and should not be confused with Barack Obama sounding a warning bell about sub prime mortgages being at the heart of an impending financial crisis. The closest thing that I found to any warning is in the next excerpt:
Of course, the adoption of voluntary industry reforms will not preempt government action to crack down on predatory lending practices, or to style new restrictions on subprime lending or short-term post-purchase interventions in certain cases. My colleagues on the Senate Committee on Banking, Housing and Urban Affairs have held important hearings on mortgage market turmoil and I expect the Committee will develop legislation.
I have highlighted the latter part of the post to illustrate Obama's lack of leadership on this issue. He speaks of mortgage market turmoil and says that HIS COLLEAGUES will develop legislation. IF this is a reference to the problems at Fannie and Freddie, which I don't think it is, Obama leaves dealing with this issue to his colleagues. I don't know about you, but this is not what I want to hear from someone who is supposed to be leading America.