The Slacker's Guide to U.S. History: The Bare Minimum on Discovering America, the Boston Tea Party, the California Gold Rush, and Lots of Other Stuff Dead White Guys Did (42 page)
Authors: Don Stewart
Tags: #Nonfiction, #History, #United States, #Reference, #Education
ORTGAGE AND
C
REDIT
C
RISIS
Credit standards as loose as Tara Reid
WTF?
What the fuck just happened? These were the five words echoing across every city and town, big or small, throughout the United States during 2008. No state was insulated from this un-God-like question. One minute Americans were pulling the equity out of their rapidly inflating homes to purchase a gas-guzzling Hummer, and the next minute they were accessing the line of credit tied to their home to go to Vegas and buy a Vegas-style hummer from a working girl wearing a short skirt and carrying a small purse.
At the time, nothing seemed wrong with the spending. Every month, home values were appreciating significantly with no real end in sight. That was until chairman of the Federal Reserve Ben Bernanke's head reappeared from his ass. As the country's financial system was blowing up in front of us and Middle America was demanding answers, some politicians and Wall Street executives were trying to deflect the possibility of investigations into the meltdown. As is the case more often than not, the whole thing started with someone's shortsighted good intentions.
One of the goals of both the Clinton and Bush administration was to increase home ownership among Americans. Henry Cisneros, Clinton's top housing advisor, in accordance with Clinton's goals of increased home ownership, loosened the mortgage restrictions for first-time home buyers, enabling them to buy a house they could never afford. In conjunction with the loosening standards, low interest rates coupled with huge sums of cash from foreign investors made credit easier than the captain of the cheerleading team to obtain. “Zero percent financing” and “no interest, no payments for five years” became standard procedure for consumers who might or might not be qualified for such regal treatment.
Although Clinton and Cisneros got the ball started, the Bush administration kept the good times rolling for homeowners and consumers. The home ownership rate, which had hovered around 64 percent for Americans from 1980 until 1994, began to rise. In 2004, this number peaked at almost 70 percent. Many of these loans were being made to people who would not be able to pay the loan back, earning the dubious “subprime loan” label.
IN 2007, BEFORE THE “WHO CAN SHIT THE BED BIGGER AND BETTER” DUELING STOCK MARKET AND HOUSING MARKET CRASHES, IT SEEMED EVERY AMERICAN HAD ONE OR MORE HOUSES.
Even people without jobs had vacation homes, investment properties, and old-fashioned mistress-meeting condos. Cisneros, one of the architects of the mess, got caught mistress-meeting in his and was forced to leave office in 1997. As for Clinton, he was more of a home-office adulterer, using the oval office as his on-the-side location.
As home ownership and demand rose as fast as a gaydar around Ryan Seacrest, so did housing prices. With increased demand for housing, and credit standards as loose as Tara Reid, home prices began to skyrocket in 2006. Americans began to think real estate prices could only go up as fast as Jenna Haze could go down, and they acted accordingly. As home prices increased, Americans used their homes like piggy banks, taking the equity out of their house again and again to fuel outrageous spending habits. Immediate gratification was the order of the day, as well as a neighborly game of “Can you top this?”
Regulatory changes allowed mortgage originators to sell their loans to other institutions. These mortgages were often sold off in groups, disguising the real risk behind some of the riskier borrowers. Credit rating agencies like Standard and Poors rated these packaged loan products AAA — their highest safety rating. With the ability to quickly pass packaged loans off to somebody else, loan underwriting standards became nearly unnecessary. Nobody seemed to care if the home buyer was unqualified, as long as it blew up on somebody else.
Underwriters were pressured to inflate home values to help push loans through. Home buyers with no job, no income, and no assets became known as “Ninja Loans” in the industry. “No doc” loans and “Stated Income” loans allowed borrowers to make up any number for their annual income in order to fit the house they wanted. To make things even more comical, two-thirds of these subprime loans were of the adjustable-rate variety. The interest rate was set for one month or one year at a time, resulting in the required mortgage payment to go up if and when interest rates went up.
Despite being ninjas, millions of families could no longer keep up with their increasing mortgage payments. As the housing boom slowed, home values stopped their furious increases. Consumers, lulled to sleep by the easy credit, overextended themselves, buying second and third homes. As the party came to an end and the housing bubble burst, homeowners found themselves fucked and stuck and standing in long lines at the bank to turn in the keys to their now foreclosed home.
As the home-buying ninjas and other underqualified borrowers continued to default on their mortgages, institutions like Bear Stearns and Washington Mutual were forced to seek business partnerships with other nearly bankrupt entities to prevent themselves from going out of business. Major financial institutions reported losses of over $400 billion and climbing from the mortgage mess. The federal government, acting as the only entity large enough to do anything, injected $100 million into both Freddie Mac and Fannie Mae. Not to be outdone, Treasury Secretary Hank Paulson, along with Bernanke, pulled congressional strings in order to get Congress to pass a $700 billion bailout package to rescue lending institutions and prevent panic in our financial markets.
The lesson for Americans in all of this was simple; if you find a company that is willing to lend you more money than you can afford to pay back to buy a house that you ultimately cannot pay for, don't worry about the guilt, the federal government will square things up with the lender after you move out and find a larger more unaffordable home for you and your family.
HE
2008 E
LECTION
The opportunity to end the George W. circus
Opportunity of a Lifetime
As the world community celebrated George W. being removed from office through timely term limits, the leaders of the Democratic Party made plans to capitalize on the opportunity of following one of the most unpopular commanders in chief in American history. Not exactly admired for his openness, intellect, or public speaking abilities, President George W. Bush managed to inspire those who are supposed to hate him, hate him, and those who are supposed to like him on the basis of party affiliation also hate him.
With an unpopular war, high oil prices, a sluggish economy, and a lack of respect internationally, the voting electorate had November 4, 2008, circled and highlighted on every calendar they could find as a constant reminder of when the opportunity to end the George W. circus would present itself.
For Democrats, there was no shortage of eager, constitutionally qualified candidates willing to make themselves available for the job. Those with a chance and those with no chance correctly filled out the required paperwork to have their name on the ballot for the Democratic Party nomination. By the time the registration deadline passed, nine Democrats from nine different states confidently declared themselves fit to lead the country in a new direction.
Joe Biden:
Long time Delaware senator who enjoys both 7-Eleven and Dunkin Donuts despite the handicap of lacking an Indian from India accent. Capable driver but train enthusiast, he commutes from Delaware to Washington, D.C. by train every day. Odds of winning the nomination when he entered the race: a not so good 40,000 to 1.Hillary Rodham Clinton:
New York senator and former first lady. Known mostly as the woman who enjoyed watching her husband's impeachment hearing. She publicly admitted to accepting wild Bill's apology for getting some late-night oral action from the not-so-attractive white house intern, Monica Lewinsky. Clinton also enjoyed telling those who would listen how the marks on her back were battle scars from her failed health care initiative while first lady and not from any BDSM role-playing activities with her
it's hard to be faithful
husband. Odds of winning the nomination when she entered the race: a near lock at 5 to 2.Christopher Dodd:
Connecticut senator with overambitious goals. Meeting the criteria of being thirty-five years old, fourteen-year U.S. resident, and a natural-born citizen, Dodd seized the opportunity of having a chance at the Democratic nomination. Unfortunately, Dodd overlooked the fact that the primaries are a popularity contest, and in order to win people must like you. Dodd proved he was unpopular everywhere, most often receiving less than 1 percent of the vote. Even with optical scanner mishaps, Dodd proved to be perhaps the most unpopular of those believing they were fit to serve in the capacity of the president of the United States. Odds of winning the nomination when he entered the race: a time-wasting 3 million to 1.
John Edwards:
Former ambulance-chasing attorney turned one-term U.S. senator. Known for $400 haircuts, this crusader for the poor gets by in his undersized 28,000-square-foot home on the outskirts of Chapel Hill, North Carolina. His political career took a shot to the sack when it was reported he had been enjoying some late-night banging with a woman not known to him as his wife. Odds of winning the nomination when he entered the race: an “I have a chance if I can come across sincere” 15 to 1.Mike Gravel:
Every once in a while you get a candidate who owes the American people an apology for taking up some of its time with their ridiculous desire to be president. As of today the electorate is waiting to hear “I'm sorry” from Gravel. Odds of winning the nomination when he entered the race: a Bill Gates 50 billion to 1.Dennis Kucinich:
First in the hearts of Frank and Virginia Kucinich is their three-times-married son Dennis Kucinich. Dennis received most of his support from white men who found his freakishly hot and out of place wife Elizabeth the perfect candidate for first lady after having to endure the unattractiveness of the two Bush first ladies of recent memory. Just before the filing deadline, Dennis woke up one morning with his naked wife lying next to him, and he figured he had beaten impossible odds before. Odds of winning the nomination when he entered the race: an unlikely nerd marrying a foreign hottie 500,000 to 1.
Barack Obama:
The perfect American combination of half black, half white. Obama was blessed with his black father's Kenyan zeal for running great distances shoeless along with his white American mother's love of minorities. Known mostly for wanting to bring change we can believe in, this former community organizer campaigned on a platform of taking from the wealthy and giving to the larger voting population recognized as the middle class. Odds of winning the nomination when he entered the race: a not so good 75,000 to 1.Bill Richardson:
A Mexican descendent, ultimately done in by a “pay to play” scandal involving his campaign. Odds of winning the nomination when he entered the race: a dollar to peso exchange 1.25 million to 1.Tom Vilsack:
Yes, he made a mistake, and like Gravel, he owes America an apology for his whimsical attempt to become president. Odds of winning the nomination when he entered the race: a Gravel-like 50 billion to 1.
With a fully inspired Democratic field of candidates on record as wanting the job of top adversary to Russian President Dmitry Medvedev, Republicans of today and ghosts of the past bravely stood up in the face of the Bush/Cheney disaster and promised to provide four years of strange. Those making the leap included:
Sam Brownback:
Kansas senator whose prolife stance for rape and incest got him the votes of the hard-core “life begins at conception and everyone should live prolife” wing of the Republican Party. Brownback ultimately enjoyed discouraging results in large part for his anti-Republican stance on opening the borders and providing citizenship for millions and millions and millions and millions and millions and millions of illegal immigrants. Odds of winning the nomination when he entered the race: a “you must not be serious” 750,000 to 1.
Jim Gilmore:
Former governor of Virginia. He may not have been the first one in the race, but he was the first one out of the race. Gilmore disqualified himself for not being electable. Odds of winning the nomination when he entered the race: an “O.J. Simpson was innocent of the Brentwood double murders” 76.5 million to 1.Rudy Giuliani:
Former New York City mayor, he was praised for his handling of the 9/11 attacks. Early front-runner Giuliani lacked porn-star staying power as his lead faltered, he released quickly, subsequently quitting the race. Frequently marrying, Giuliani keeps a list of 400 guests who remain on call at all times for his next wedding. Odds of winning the nomination when he entered the race: a near Hillary-like 9 to 2.Mike Huckabee:
Former Southern Baptist minister turned overweight Arkansas governor. Fearing death by heart attack, he lost 110 pounds, or one Katie Holmes. The Huck struggled to get over the hump of his wife having far too many Barbara Bush physical features. After being described as both gregarious and loquacious, most Americans figured he had a dueling terminal illnesses and thought maybe running for president was on his “bucket list.” It has been speculated that if he and Kucinich's wife were a marital item he may have received the Republican nomination. Odds of winning the nomination when he entered the race: a shot-in-the-dark 625,000 to 1.
Duncan Hunter:
Representative from California. Did not drop out as quickly as Gilmore but probably should have. Odds of winning the nomination when he entered the race: a hell-freezing-over 4.5 million to 1.Alan Keyes:
After inadvertently marking the wrong box on his party affiliation form, Keyes became the first black member of the Republican Party. He hoped to quickly parlay his notoriety into the nomination. Doesn't he know Republican is old Latin for “Whites Only” ? Odds of winning the nomination when he entered the race: a “he's even blacker than Barack!” 50 billion to 1.John McCain:
The nearly dead senator from Arizona broke out the straight-talk express to capture the nomination that was stolen from him back in 2000 when the George W. camp resorted to slander. Referencing his time at the “Hanoi Hilton” during his prisoner of war stage, McCain capitalized on America's sympathy for his wartime struggles and for his fortuitous marrying of a sexy and wealthy beer distributor heir. Odds of winning the nomination when he entered the race: an “in it to win it” 50 to 1.Ron Paul:
The feisty and frustrated representative from Texas was left on the outside looking in from the beginning. Despite the obvious generation gap, Paul's strongest support came from young weekend-binge-drinking college students. Odds of winning the nomination when he entered the race: a perfect beer pong season 900,000 to 1.Mitt Romney:
Former Massachusetts governor, he enjoyed the challenge of spending tens of millions of dollars of his own money in an effort to overcome his Mormon anchor. Americans pondered, “which one of his wives would be considered the First Lady?” Odds of winning the nomination when he entered the race: a “Catholic Church advocating for polygamy” 150,000 to 1.
Tom Tancredo:
As suspected, his Republican nomination bid was simply a bad joke that got out of hand. Odds of winning the nomination when he entered the race: a long-shot-at-best 10 million to 1.Fred Thompson:
Suffering from dementia, he wandered off the set of
Law and Order
unsupervised and into the Republican primary. He pointed out that Flomax keeps him peeing regularly, not excessively, which was enough for him to receive medical clearance to perform the job of commander in chief. Odds of winning the nomination when he entered the race: a “
Law and Order
winning best comedy” 3,500 to 1.Tommy Thompson:
He was just fucking kidding, or at least Republican voters thought so, as his candidacy was completely unnecessary. Odds of winning the nomination when he entered the race: a humorous 7.5 million to 1.
