Skunks Don’t Change Their Stripes. – congress.

Skunks Don’t Change Their Stripes

by L. J. Martin


Now that the initial shock of a collapsed economy is over (not the problem, only the shock), now that the media, the politicians, the bloggers (like myself), and the general public have spent a couple of years of recriminations, of blaming Wall Street, Fannie Mae, Freddie Mac, mortgage companies and brokers, real estate developers and home builders, and anyone with an income over the national average…who is really to blame for the economic mess, the morass, in which the country finds herself wallowing?

The real mess began with a collapsed real estate market with carpenters, concrete men, plasterers, and all the other trades out of work.  Which of course reverberated up through suppliers of all kinds of building materials and services being not only out of work…but out of business.  Which of course is reflected in the fact no one’s buying appliances, furniture, automobiles, landscaping, and it goes on and on and on.  And everyone is affected.

Home equity has long been the source of wealth for the average family in America, long been that family’s hedge against inflation, for home prices rose with inflation.  As the value of, the purchasing power of, your savings went down, the equity in your house went up and things equaled out.  However, that age old economic law, supply and demand, cannot be ignored, and when there’s a plethora of empty houses in almost every community in America, supply overwhelms demand, particularly when demand is tempered by 1/5th of the potential buyers being unemployed or underemployed.  And oversupply drives down prices, drives them down to below what’s owed, and equity disappears.  Equity not only disappears but debt is incurred and savings wiped out as American’s desperately try to hang on to home and respectability.  And everyone is affected.

And it will be a long, long time before home equity is again the basis of the average American’s wealth, yet inflation will continue and probably be the country’s next devastating balloon.  That doesn’t bode well for most of us.

So, why can’t we blame Wall Street?  After all the evil minions of Wall Street made billions on the great fraud of a “never ending” rise in real estate prices.  They packaged up all those mortgages and sold them to unwary buyers all over the world.  Why can’t we blame Fannie Mae and Freddie Mac, who facilitated all those mortgages by telling mortgage brokers and banks they must relax their credit requirements and loan to folks who merely said, “we can pay it back.”  Why can’t we blame the mortgage brokers and bank lending officers who sat across the desk from borrowers and took those loan applications (many fraudulent), and profited from those loans.  Why can’t we blame real estate brokers and homebuilders, who profited from those loans and the resulting home sales?

Because they’re not at fault, that’s why.  They were only pawns, albeit willing pawns, in the results of an upper level decision.  In this case profits, at first and ka ka later, rolls downhill.

We are blessed to live in a free enterprise economic system.  Everyone in America is blessed by unparalleled opportunity as compared to the rest of the world, to put their head down and tail up and go to work building economic security for themselves and their families.  But there are limitations to what you can do.  The old laws of caveat emptor, buyer beware, are water-under-the-bridge in America and have been for decades, we are regulated as to what we can do in our business life, what we can represent, whom we can take advantage of, and if we violate those regulations, rules, laws, we can be fined and sometimes prosecuted.  And we’ve been conditioned to rely and depend upon that regulation, however good or bad that might be.

So what went wrong with the system?

Congress, that’s what, that’s who.  Barney Frank (as Chairman of the House Financial Services Committee), that’s who.  Did he act alone?  Of course not.  He had a House and Senate full of folks who were more than happy to appear, for even a short time, to be great benefactors to the average American.  Why shouldn’t everyman not only have a chicken in every pot, but a four bedroom, two and a half bath home?  congress wanted to keep their jobs, and thought they could bribe their way into the hearts of America.  I, for one, hope and pray they’re wrong about keeping their jobs.  I hope we average Americans can’t be so easily bought, so easily fooled.

To his credit, George Bush warned congress and the American people at least 17 times against credit easing.  That said, in my opinion, he didn’t act nearly strong enough.  He knew the potential problem and should have shouted it from the top of the White House portico, then issued a presidential edict.  George didn’t want to look like the ultimate villain, and he would have…but he should have.  History would have eventually judged him as a soothsayer and a hero of his time.  Now, who knows?

What did congress do wrong?  Simple, they ignored basic economic laws of credit that had been established in this country for two centuries and in England, Holland, Germany, France, and other basically free enterprise systems for centuries before.  Credit has long established rules, established over centuries. However Congress, via Fanny Mae and Freddy Mac, instructed all those financial players out there in America to ignore the tried and rule rules as well, with impunity.  And are the players going to say, “No, I won’t take advantage of this opportunity to profit from this unregulated windfall?”  Of course not, if they don’t take advantage the bank and mortgage broker, the real estate broker, the builder across the street will do so.  It’s get onboard or be left in the dust.

The rule when I was a California licensed general contractor, real estate broker, and appraiser was simple and straightforward:  a borrower can only qualify for a loan that 20% (sometimes slightly more) of his income will support.  And beyond that, the lender must be satisfied that the loan application the borrower submits is true.  Thus, the intermediary, the bank or mortgage broker, must obtain verifications of deposit and employment (including income), and a credit report.  And these must be obtained and verified independently of any claim by the borrower.  Congress changed all that, after all, Congress is smarter than centuries of accumulated credit knowledge.  Let’s see, do you think human nature and the desire for a better home for themselves and their families, might, just might, motivate some borrowers to lie?  If you answered that question NO, then I’ve got some ocean front property in Montana I’d like to sell you.  Caveat emptor.

Easing credit requirements created an artificial real estate market, and the balloon grew and grew, until it’s inevitable burst.  You can’t build a market upon a lie, and Congress allowed…no, instructed…bankers and mortgage brokers to accept lies instead of verifications.  Where they being good guys?  In their eyes, maybe.  We’re they stupid?  No question.  Were they self-serving?  I hope not, in the long run; although I think that’s what motivated many of them.  Now millions of good Americans, along with those who lied (and were encouraged to in many instances), are upside down owing more than their house is worth, and the fault lies with Congress.  Nowhere else.


Ladies and gentlemen, Congress played you, congress, obviously is not made up of economic geniuses or even those skilled in Econ 1A.  As we know, it’s made up of lawyers and primary school teachers and professional politicians.  It’s been demonstrated too many times that Congress has far more than it’s share of self-serving worms willing to do anything, say anything, to keep themselves among the aristocracy.  The fact is, you can’t change basic economic laws, you can’t change or legislate human nature.  Let’s hope you can no longer buy votes, but I see no change in the system to eliminate that carrot at the end of the stick.

Age-old laws of credit are there for good reason, because they’ve been tried and found true over centuries.  Congress, obviously, didn’t know their butts from a box of rocks about either credit or human nature.  And the hell of it is, we can rest assured they still don’t.  Skunks can’t, don’t, won’t, change their stripes.

I hope Barney Frank will be happy in his retirement, for we can rest assure that he’ll not be foreclosed upon, nor will he be standing in unemployment lines.  After all, he’s got retirement and health insurance paid for by you and I, not to speak of financial gain and profiteering from inside information.  As he’s always done, I’m sure the fat little toad (expletives deleted) will be popping bon bons while the rest of the country stands in unemployment lines.  And the rest of Congress is right up there alongside him.  Let’s retire them all, at least those who have voted to take raises, to have us pay for their excessive retirement (when they should be on social security like the rest of us), to pay for their exclusive health care club, to allow them to profit from inside information while the rest of the country is subject to prosecution for the same offense.

Obama was right about one thing…it’s time for a change.

Go to and sign the petition.  It’s from and will put no cookies or other bugs on your computer.  No, Congress doesn’t have to pay the slightest attention to it, but if we get enough signatures, how can they ignore it?  Join us in telling Congress there are…


L. J. Martin is the author of 30 book length works of both fiction and non-fiction, and the conservative political blog From The Pea Patch.  He lives in Montana with his wife, author of over 50.  Learn more at and




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