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Despite efforts to blame the rescue bill's failure on the GOP, it should be remembered that 95 Democrats — some 40% of the Democratic Caucus — withheld support. Obama himself also deserves blame — not only for the bill's failure, but also for the crisis it was designed to solve.

As the New York Times reports, "Aides to Mr. Obama said he had not directly reached out to try to sway any House Democrats who opposed the measure." Is the reason the fact that the slush fund for ACORN in the original bill, siphoning off 20% of any future profits for such activist groups, was trimmed from the tree?

The CRA empowered regulators to punish banks that failed to "meet the credit needs" of "low-income, minority and distressed neighborhoods." It gave groups such as ACORN a license and a means to intimidate banks, claiming they were "redlining" poor and minority neighborhoods. ACORN employed its tactics in 1991 by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA.

I covered this yesterday from Stanley Kurtz’ column in the New York Post, but the video makes the point a little more clear. Kurtz tells Steve Doocy and Gretchen Carlson that the financial collapse started with ACORN and other “community organizers” pressuring banks to make bad loans. Barack Obama has longstanding ties to ACORN, which Kurtz wants to bring to light:

Fannie Mae was the real culprit. By creating a market for questionable loans, they encouraged lenders to loan money to anyone willing to accept it, because the lenders could make short-term profits by selling the paper back to Fannie Mae.  Instead of holding the paper themselves, though, Fannie (and Freddie) converted them into mortgage-backed securities (MBSs) at greatly inflated value, thanks to the artificial demand Raines created.  Had Fannie and Freddie held the paper themselves instead of looking for a short-term profit of their own, then their collapse would have had a much smaller effect on the worldwide financial markets.

Instead, Congress mandated the sale of MBSs, and we are where we are now.

The ACORN connection is an interesting political story more than a financial issue now.  It reveals the tactics of Obama and his allies, in a way that makes the recent story of Obama’s Truth Squad thuggery more understandable.  Obama doesn’t represent a post-partisan brand of New Politics, but instead the Saul Alinsky tactics of the New Left radicalism that erupted in the 1960s.

Can't afford a mortgage? There's a fix: R-E-N-T.

"Nancy Pelosi pulled off an election-year trick designed to get the Republicans blamed for this. This is every bit as winning an issue as gas prices, oil drilling, and everything else -- and then McCain says he wants to be bipartisan, and 'bipartisanship is tough.' Bipartisanship is the easiest damn thing in the world, Senator! Partisanship, standing up for your principles, that's what's tough because everybody tries to destroy you. Bipartisanship is just like liberalism. It's a gutless choice."

New McCain ad: Hey, you know who else blames Democrats for the mortgage mess?

Starring America’s favorite newly minted right-leaning independent. Viscerally enjoyable, although Obama’s led in the polls on the economy for so long that I wonder if he and the Dems aren’t bulletproof to charges like this by now. In fact, this plays more like a congressional ad than a presidential one, with The One making a brief cameo in his accustomed role: “Notably silent,” out of harm’s way, careful not to commit to a position too strongly lest it complicate life for him down the road. Which may explain why he didn’t phone a single House Democrat yesterday to push them to vote for the bailout he allegedly supports.

Buzz up

The Myth of Income Decline
How a flawed study based on IRS data, since corrected, continues to generate the idea that only the top one percent of Americans saw gains in income over the past 30 years, while 90 percent of Americans saw their incomes decline.

The Myth of the Declining Middle Class
Have the richest ten percent of Americans reaped all the benefits of recent economic growth at the expense of the middle class?

John McCain
Feb. 28, 2008

"I am a proud conservative, liberal Republica — conservative Republican ... Hello? Easy there."

—McCain, accidentally calling himself a liberal while elaborating on the "stark differences" between his positions and those of his Democratic rivals. The slip-up came just days after Republican critics like Rush Limbaugh blasted the Arizona senator for not being conservative enough

I am now persuaded by this. If voting "yes," is political suicide, Pelosi can't let her Democrats go and reap the benefits of a non-disastrous economy, and beat the Republicans up for making the hard call. She's the speaker, she controls the chamber. You can't say, "vote for this bill, it is necessary" and "we will target any Republican who votes for this bill" at the same moment.

WSJ: "Democratic leadership aides said they didn't try to compel rank-and-file lawmakers to vote for the legislation in recent days, leaving individuals largely on their own to make decisions"

NY Times: "Aides to Mr. Obama said he had not directly reached out to try to sway any House Democrats who opposed the measure"

Video: Where was Dodd during the Fannie Mae collapse?

At least one media outlet wonders where Chris Dodd went while Fannie Mae went belly-up on its binge of bad mortgage paper. Unfortunately, that curiosity is limited to Fox News Channel, which almost guarantees that other mainstream media outlets won’t cover it. While Al Hubbard tends to lay all of the blame off on Democrats, when Republicans had plenty of time to act as well, at least he’s directing the spotlight where it really belongs:

Hubbard notes that the Bush administration long supported reform at Fannie Mae and Freddie Mac. He also tells viewers that the House managed to pass Fannie/Freddie reform when Republicans had the majority, but Chris Dodd killed it in the Senate Banking Committee. Dodd, Hubbard reminds us, took the most money from Fannie/Freddie sources, and had little incentive to press for tighter oversight.

Where was Dodd? Where was Frank? Where were the recipients of Fannie/Freddie money during the years in which Fannie Mae’s fraudulent business practices were exposed? They were in the pockets of Fannie Mae and Freddie Mac, and busy telling us that no problem existed — and that regulators who reported the irregularities were racists. They sold us out — and the media has let them off the hook.

McCain: Extend FDIC, act without Congress

The FDIC solution seems to be gaining popularity with Republicans, and that may help keep depositors from starting bank runs, but it doesn’t do much to resolve the real cancer at the heart of this financial crisis.  Congress simply cannot escape its responsibility for its deliberate issuance of junk bonds through Fannie Mae and Freddie Mac based on bad loans, and until Congress acts to provide some sort of rational floor for the MBSs it launched, American credit will have little credibility.  Until enough stability comes back into that market, the negative balance of these American-government backed bonds will continue to sink the investors who bought them, believing that the US stood behind Fannie/Freddie actions.

McCain’s statement raises another question.  Can the Treasury spend $1 trillion without Congressional approval to buy back these MBSs?  If so, then what was the point of the negotiations of the last few days, Paulson coming to Pelosi on bended knee, and the futile vote yesterday — political cover?  Somehow, I find it difficult to imagine that Treasury can indeed act on this scale without Congress.

However, I’ll say this for McCain.  He appears to be actually demonstrating some leadership on this issue.  Where is Barack Obama?

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Polls show more than 50% of Americans oppose what the pollsters call a "bailout" (but what we prefer to call a rescue). Meanwhile, a USA Today poll found that nearly a third of Americans think we're in a depression.

Concern about the financial system is fully justified. But excessive gloom is not. In the most recent quarter, GDP rose 2.1% year over year, 3.1% excluding housing. Hardly a depression. So let's not talk ourselves into one.

We, too, have qualms about the rescue effort. Washington under Democrat-led Congresses wrote the rules that made this mess possible, and we have little confidence in their ability to get us out of it.

We're not short on capital, as we said, but on confidence. Passing a bill, even if flawed, would go a long way to restoring the latter.

Nothing could more painfully demonstrate what is wrong with Congress than the current financial crisis. Among the congressional...

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Among the congressional "leaders" invited to the White House to devise a bailout "solution" are the very people who have for years created the risks that have come home to roost.

Five years ago, Barney Frank vouched for the "soundness" of Fannie Mae and Freddie Mac and said "I do not see" any "possibility of serious financial losses to the Treasury."

Earlier this year, Sen. Chris Dodd praised Fannie Mae and Freddie Mac for "riding to the rescue" when other financial institutions were cutting back on mortgage loans. He too said they "need to do more" to help subprime borrowers get better loans.

But the magic words "affordable housing" and the ugly word "redlining" led to politicians directing where loans and investments should go, with such things as the Community Reinvestment Act and various other coercions and threats.

The roots of this problem go back many years, but since the crisis happened on George W. Bush's watch, that's enough for those who think in terms of talking points, without wanting to be confused by the facts.

In reality, President Bush tried unsuccessfully, years ago, to get Congress to create some regulatory agency to oversee Fannie Mae and Freddie Mac.

Gregory Mankiw, his chairman of the Council of Economic Advisers, warned in February 2004 that expecting a government bailout if things go wrong "creates an incentive for a company to take on risk and enjoy the associated increase in return."

Alan Greenspan, then head of the Fed, made the same point in testifying before Congress in February 2004. He said: "The Federal Reserve is concerned" that Fannie Mae and Freddie Mac were using this implicit reliance on a government bailout in a crisis to take more risks, in order to "multiply the profitability of subsidized debt."