Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone... Dems Ignored Warnings

[rushmc 23]

Make sure and go the the link for info about the Obama donors and other storied

http://gatewaypundit.blogspot.com/2008/09/bush-called-for-reform-of-fannie-mae.html



Sunday, September 21, 2008
Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone... Dems Ignored Warnings

For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted.

Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.

The White House released this list of attempts by President Bush to reform Freddie Mae and Freddie Mac since he took office in 2001.
Unfortunately, Congress did not act on the president's warnings:


** 2001

April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

** 2002

May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

** 2003

January: Freddie Mac announces it has to restate financial results for the previous three years.

February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

** 2004

February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

** 2005

April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

** 2007

July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)

** 2008

January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase.

March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)

"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)

"Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.
In 2005-- Senator John McCain partnered with three other Senate Republicans to reform the government’s involvement in lending.
Democrats blocked this reform, too.

More... Not only did democrats not act on these warnings but Barack Obama put one of the major Sub-Prime Slime players on his campaign as finance chairperson.

UPDATE: The media is not reporting that the failed financial institutions are big Obama donors.
Hat Tip Larwyn

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[billvon 3,120]

9/23/2008 9:34:00 PM
Republicans are responsible for financial crisis

Jack Lemoult

Many people think that no party or president can cause an economic crisis like the one we are now enduring. They are wrong. A president’s policies can directly impact the economy. The policies of George W. Bush and the Republicans in Congress are directly responsible for our current mess.

The root of our recent problems is the mortgage crisis. It was caused by Republican legislation which deregulated the banking and investment industries. Because of that deregulation, banks and financial institutions made billions of dollars worth of sub-prime mortgage loans to unqualified people. Thanks to the Republicans, those mortgages were then traded in bulk on the stock market and were purchased by brokerage firms and large banks.

The collapse was the result of Republican anti-regulation philosophy that put consumers at the mercy of large banks and brokerages. Despite his recent calls for reform, John McCain has always supported broad deregulation of banks and brokerages. He has always characterized himself as a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms.

Back in 1933, following the stock-market crash, Congress enacted the Glass-Steagall Act, which separated the functions of commercial banks from those of stockbrokerage houses and regulated the way banks could make loans. From then on, the government limited the banks in making mortgage loans. It was always the economic philosophy of Republicans in Congress, however, to oppose all governmental regulations and to try to abolish the regulations governing banks and brokerages. Among the Republican senators in the 1990s who fiercely opposed any regulation of banks and financial institutions was Phil Gramm of Texas. Gramm, who has always been a close ally of John McCain, is now McCain’s chief financial advisor and co-chair of his campaign. Gramm is being spoken of by the McCain campaign as a top candidate for Treasury Secretary.

In the 1990s, after the Republicans took control of Congress, Phil Gramm was able to pass the Gramm-Leach-Bliley Act which largely deregulated the banking industry and allowed banks to merge with securities firms. John McCain strongly supported and voted for the bill. After that, Gramm slipped an amendment into an omnibus appropriations bill which deregulated the trading of financial instruments and allowed banks and brokers to trade mortgages as if they were stocks and bonds. This opened up the floodgates to massive trading of sub-prime mortgages.

Gramm later left the senate for a top position with UBS, a giant international financial firm which owns banks and investment firms such as PaineWebber. At UBS, Gramm lobbied Congress, the Federal Reserve Bank, and the Treasury Department on behalf of the banks. He sought to have Congress pass a law designed to forbid states from enforcing stronger laws against predatory lending. As a result of Gramm’s efforts, the law forbidding state regulation of banks was passed, and lenders were free to practice predatory lending. Sub-prime mortgages became routine, and the trading of sub-prime mortgages in bulk became a widespread practice on Wall Street. When millions of people defaulted on those mortgages, the economy went into a tailspin.

Now John McCain, one of the Republicans who deregulated the banks and brokerages and enabled this disaster to happen, is running for President. Without any trace of irony, this Republican is shouting out against the lack of bank regulation! This Republican is talking about putting the chief congressional deregulator of banks, Phil Gramm, into the Cabinet as Treasury Secretary. We are being asked to forget about the perennial Republican opposition to bank regulation and to forget about McCain’s role as a deregulator. We are asked to forget that Phil Gramm and other McCain advisors have been powerful lobbyists for the banking industry.

Governmental regulation of banks and security firms is intended to protect the consumer. If the bank regulations had not been erased by the Gramm-Leach-Bliley Act and other Republican acts, we would not have had this crisis. We now face the devastation of our economy thanks to a Republican and his buddies who got us into this mess in the first place. Do you want eight more years of this economic philosophy? Do you want to reward the gang that caused this disaster?

[rushmc 23]

Quote

9/23/2008 9:34:00 PM
Republicans are responsible for financial crisis

Jack Lemoult

Many people think that no party or president can cause an economic crisis like the one we are now enduring. They are wrong. A president’s policies can directly impact the economy. The policies of George W. Bush and the Republicans in Congress are directly responsible for our current mess.

The root of our recent problems is the mortgage crisis. It was caused by Republican legislation which deregulated the banking and investment industries. Because of that deregulation, banks and financial institutions made billions of dollars worth of sub-prime mortgage loans to unqualified people. Thanks to the Republicans, those mortgages were then traded in bulk on the stock market and were purchased by brokerage firms and large banks.

The collapse was the result of Republican anti-regulation philosophy that put consumers at the mercy of large banks and brokerages. Despite his recent calls for reform, John McCain has always supported broad deregulation of banks and brokerages. He has always characterized himself as a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms.

Back in 1933, following the stock-market crash, Congress enacted the Glass-Steagall Act, which separated the functions of commercial banks from those of stockbrokerage houses and regulated the way banks could make loans. From then on, the government limited the banks in making mortgage loans. It was always the economic philosophy of Republicans in Congress, however, to oppose all governmental regulations and to try to abolish the regulations governing banks and brokerages. Among the Republican senators in the 1990s who fiercely opposed any regulation of banks and financial institutions was Phil Gramm of Texas. Gramm, who has always been a close ally of John McCain, is now McCain’s chief financial advisor and co-chair of his campaign. Gramm is being spoken of by the McCain campaign as a top candidate for Treasury Secretary.

In the 1990s, after the Republicans took control of Congress, Phil Gramm was able to pass the Gramm-Leach-Bliley Act which largely deregulated the banking industry and allowed banks to merge with securities firms. John McCain strongly supported and voted for the bill. After that, Gramm slipped an amendment into an omnibus appropriations bill which deregulated the trading of financial instruments and allowed banks and brokers to trade mortgages as if they were stocks and bonds. This opened up the floodgates to massive trading of sub-prime mortgages.

Gramm later left the senate for a top position with UBS, a giant international financial firm which owns banks and investment firms such as PaineWebber. At UBS, Gramm lobbied Congress, the Federal Reserve Bank, and the Treasury Department on behalf of the banks. He sought to have Congress pass a law designed to forbid states from enforcing stronger laws against predatory lending. As a result of Gramm’s efforts, the law forbidding state regulation of banks was passed, and lenders were free to practice predatory lending. Sub-prime mortgages became routine, and the trading of sub-prime mortgages in bulk became a widespread practice on Wall Street. When millions of people defaulted on those mortgages, the economy went into a tailspin.

Now John McCain, one of the Republicans who deregulated the banks and brokerages and enabled this disaster to happen, is running for President. Without any trace of irony, this Republican is shouting out against the lack of bank regulation! This Republican is talking about putting the chief congressional deregulator of banks, Phil Gramm, into the Cabinet as Treasury Secretary. We are being asked to forget about the perennial Republican opposition to bank regulation and to forget about McCain’s role as a deregulator. We are asked to forget that Phil Gramm and other McCain advisors have been powerful lobbyists for the banking industry.

Governmental regulation of banks and security firms is intended to protect the consumer. If the bank regulations had not been erased by the Gramm-Leach-Bliley Act and other Republican acts, we would not have had this crisis. We now face the devastation of our economy thanks to a Republican and his buddies who got us into this mess in the first place. Do you want eight more years of this economic philosophy? Do you want to reward the gang that caused this disaster?

Same old blame free market capitlaism so we can scare people into socolist regulations.

Fact is one party blocked all attempts to fix it.

SS and medicare are next, and the predictions have already been made

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[kelpdiver 2]

calls for reform in 2008 were about 5 years too late

[billvon 3,120]

>Same old blame free market capitlaism so we can scare people into
>socolist regulations.

Uh, you do realize that Bush is the one with the proposal to "scare people into socolist regulations" right?

[rushmc 23]

Quote

>Same old blame free market capitlaism so we can scare people into
>socolist regulations.

Uh, you do realize that Bush is the one with the proposal to "scare people into socolist regulations" right?

Ya, and I am against it

But a fucked up wrong solution does not point blame at the cause

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[rushmc 23]

Quote

calls for reform in 2008 were about 5 years too late

True, calls had been made in 2001

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[kallend 2,150]

Ummmm - for how many of those years of ignored warnings were the Dems in control of Congress?

How about McCains campaign chief taking $2M in fees from Fannie/Freddie to be a lobbiest for them?

Your artlcle is NOT impartial.

...

The only sure way to survive a canopy collision is not to have one.

[kallend 2,150]

Quote

Quote

calls for reform in 2008 were about 5 years too late

True, calls had been made in 2001, 2002, 2003, 2004, 2005.

You forgot a few years

...

The only sure way to survive a canopy collision is not to have one.

[rushmc 23]

Quote

Quote

Quote

calls for reform in 2008 were about 5 years too late

True, calls had been made in 2001, 2002, 2003, 2004, 2005.

You forgot a few years

Hey, I got to thank you for pointing out that they DID warn us though those years.

Sorry for my omission

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[quade 4]

So which is it Rush? Is GWB a financial genius that saw it all coming and was incapable of pulling it back together or . . . is he still just the worst President this country ever had and a total doofus?

Threads you've posted lately seem to flip-flop quite a bit on this.

quade -
The World's Most Boring Skydiver

[billvon 3,120]

September 22, 2008
Loan Titans Paid McCain Adviser Nearly $2 Million
By DAVID D. KIRKPATRICK and CHARLES DUHIGG

Senator John McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say.

Mr. McCain, the Republican candidate for president, has recently begun campaigning as a critic of the two companies and the lobbying army that helped them evade greater regulation as they began buying riskier mortgages with implicit federal backing. He and his Democratic rival, Senator Barack Obama, have donors and advisers who are tied to the companies.

But last week the McCain campaign stepped up a running battle of guilt by association when it began broadcasting commercials trying to link Mr. Obama directly to the government bailout of the mortgage giants this month by charging that he takes advice from Fannie Mae’s former chief executive, Franklin Raines, an assertion both Mr. Raines and the Obama campaign dispute.

Incensed by the advertisements, several current and former executives of the companies came forward to discuss the role that Rick Davis, Mr. McCain’s campaign manager and longtime adviser, played in helping Fannie Mae and Freddie Mac beat back regulatory challenges when he served as president of their advocacy group, the Homeownership Alliance, formed in the summer of 2000. Some who came forward were Democrats, but Republicans, speaking on the condition of anonymity, confirmed their descriptions.

“The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again,” said Robert McCarson, a former spokesman for Fannie Mae, who said that while he worked there from 2000 to 2002, Fannie Mae and Freddie Mac together paid Mr. Davis’s firm $35,000 a month. Mr. Davis “didn’t really do anything,” Mr. McCarson, a Democrat, said.

[Amazon 7]

Quote

calls for reform in 2008 were about 5 years too late

--------------------------------------------------------------------------------


True, calls had been made in 2001, 2002, 2003, 2004, 2005.

--------------------------------------------------------------------------------


You forgot a few years

Funny how easy it is for some to spin that little fact

I also love how they have been trying to spin this back in time to get some Clinton sleaze on it too.. when most of the deregulation.... occured in GOP controlled frenzies.. to help those of their friends who pushed them to do this so they could bilk billions of dollars from Americans....and revel in thier greed.... while the bulk of us are yet again going to foot the bills.

[billvon 3,120]

Posted Monday, September 22, 2008 1:14 PM
McCain's Boomerang Problem
Andrew Romano

The only thing dumber than throwing a stone from your glass abode? Throwing a boomerang.

Someone should tell John McCain. In presidential politics, negative attacks are pretty much par for the course. As long as they're not lies--as both McCain's and Barack Obama's have been of late--then there's not much point wringing your hands, rending your garments and/or gnashing your teeth in protest. Even then, there's probably little political price to pay for misleading the electorate; it takes a lot for casual voters to punish a liar at the polls. That said, over the past week Team McCain has perfected a new kind of political attack that should offend the sensibilities of campaign junkies everywhere--simply because it's so counterproductive. First, McCain chastises Obama for committing a sin that he himself has committed. Then Obama points this out, distracting voters from his own foibles and refocusing the spotlight on McCain. For Obama, the impact of the attack is immediately negated. But for McCain it's doubled: he ends up looking both a) guilty of whatever he accused Obama of and b) totally hypocritical.

I've counted at least three of these "Boomerang Attacks" in the past few days. The first came last Friday with the release of "Nothing New," a web ad slamming Obama for not saying "whether he supported or opposed the government-backed rescue of insurance giant AIG." The point, of course, was to portray Obama as an indecisive neophyte unprepared for the presidency. A "true leader," the ad implied--a leader like, say, John McCain--would've taken a bold and unequivocal stand. The only problem? McCain was even more wishy-washy on the bailout than Obama. Asked last Tuesday on "Today" whether the government should intervene in the AIG meltdown, McCain was pretty clear. "They're on their own," he said. The next day, however--after the Fed announced it would step in--McCain had softened his stance, admitting on "Good Morning America" that "there are literally millions of people whose retirement, whose investment, whose insurance were at risk." It's not that Obama was a angel here. Unlike McCain, he played the weasely Clintonian game of distinguishing between "supporting" and "not second-guessing" the $85 million bailout, even going so far as to express outrage that anyone would confuse the two positions. It's that McCain's attack gave the Illinois senator an easy opportunity to bite back--and ultimately made McCain look worse than his opponent, not better. "On Tuesday, [McCain] said the government should stand aside and allow one of the nation’s largest insurers AIG, to collapse... despite the possibility that it would put millions of Americans at risk," Obama told a crowd of thousands at a northern New Mexico rally last Thursday. "But by Wednesday, he changed his mind." In other words, I'll see your indecision, Senator--and raise you one whole flip-flop, with a little bit of hypocrisy to sweeten the pot.

You'd think Team McCain would've learned its lesson. Apparently not. Hot on the heels of the AIG onslaught came an even more hypocritical attack from Crystal City--this one regarding Obama's ties to Fannie Mae and Freddie Mac, the failed mortgage behemoths. In a pair of ads ("Jim Johnson" and "Advice") and a speech Friday in Green Bay, Wisc., McCain pilloried Obama for associating with former Fannie Mae CEOs Jim Johnson and Franklin Raines. "While Fannie Mae was betraying the public trust, somehow its former CEO [Johnson] had managed to gain my opponent's trust to the point that Senator Obama actually put him in charge of his vice presidential search," said McCain. "Another CEO for Fannie Mae, Mr. Raines, has been advising Senator Obama on housing policy... Senator Obama may be taking their advice and he may be taking their money, but in a McCain-Palin administration, there will be no seat for these people at the policy-making table. They won't even get past the front gate at the White House."

Never mind the fact that Raines never actually advised Obama on anything. The real problem here is that McCain's campaign is swarming with 26 advisers or fundraisers who have lobbied for Fannie Mae or Freddie Mac--including nearly a dozen who lobby right now. As the Washington Monthly's Steve Benen wrote last week, "one of McCain's top policy advisers, Charlie Black, was lobbyist for Freddie Mac for 10 years, while his campaign manager, Rick Davis, lobbied to help Fannie and Freddie steer clear of additional federal regulations [and earned $2 million in the process]... Tom Loeffler, who serves McCain's campaign co-chairman, also lobbied for Fannie Mae. Aquiles Suarez, a McCain economic adviser, was a Fannie Mae executive. Dan Crippen, a McCain adviser who helped craft the campaign's health-care policy, lobbied for Fannie Mae (and Merrill Lynch). Arthur B. Culvahouse, who helped lead McCain's VP search committee, also lobbied for Fannie Mae." According to former Fannie Mae executive William Maloni, "photographs of Sen. McCain's staff... loo[k] to me like the team of lobbyists who used to report to me." Without these ties--which are far more extensive than Obama's--McCain would have every right to say that associating with officials from troubled financial institutions is a sign of bad judgment. Again, it's not like Obama's hands are spotless. But with them, McCain offers Obama an otherwise unavailable opportunity to remind voters that McCain's own judgment--at least by McCain's own standards--is worse. So much for "no seat... at the table."

With this brief history in mind, I'm betting that McCain's latest attack ad--the start of a new effort to transform Obama "into a scheming insider-urban-machine politician," according to the Atlantic's Marc Ambinder--will backfire as well. Called "Chicago Machine," it's meant to distract the media--and the electorate--from the latest economic news by resurrecting stories about Obama's ties to "unsavory" Chicago figures like Mayor William Daley, Governor Ron Blagojevich, State Senator Emil Jones and developer Tony Rezko. Leaving aside questions of whether any of these links are relevant--Obama was opportunistic and ambitious in Chicago, but "corrupt" is a tough sell--I suspect that McCain's attack has opened the door for Obama to launch a rather obvious counteroffensive of his own: on Washington, D.C. Obama could call McCain a creature of the capital--yet again. Or he could remind voters that McCain was actually, you know, involved in a real political scandal related to financial regulation (unlike Obama himself). Either way, the Republican nominee has given his rival yet another chance to say "I know you are"--in this case, part of an unethical politician culture--"but what am I?" And while Chicago may be shady, it's nowhere near as radioactive as Washington, D.C.

Beware of falling glass.

[mnealtx 0]

Quote

Republicans are responsible for financial crisis

Of COURSE they are - if you conveniently forget WHO pushed Fannie/Freddie into the subprime market - Andrew Cuomo.

Mike
I love you, Shannon and Jim.
POPS 9708 , SCR 14706

[rushmc 23]

Quote

So which is it Rush? Is GWB a financial genius that saw it all coming and was incapable of pulling it back together or . . . is he still just the worst President this country ever had and a total doofus?

Threads you've posted lately seem to flip-flop quite a bit on this.

he saw it coming but his proposed solution (at least the one he seems to be supporting) sucks

Sorry it is so hard for you to keep up

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[rushmc 23]

Quote

Posted Monday, September 22, 2008 1:14 PM
McCain's Boomerang Problem
Andrew Romano

The only thing dumber than throwing a stone from your glass abode? Throwing a boomerang.

Someone should tell John McCain. In presidential politics, negative attacks are pretty much par for the course. As long as they're not lies--as both McCain's and Barack Obama's have been of late--then there's not much point wringing your hands, rending your garments and/or gnashing your teeth in protest. Even then, there's probably little political price to pay for misleading the electorate; it takes a lot for casual voters to punish a liar at the polls. That said, over the past week Team McCain has perfected a new kind of political attack that should offend the sensibilities of campaign junkies everywhere--simply because it's so counterproductive. First, McCain chastises Obama for committing a sin that he himself has committed. Then Obama points this out, distracting voters from his own foibles and refocusing the spotlight on McCain. For Obama, the impact of the attack is immediately negated. But for McCain it's doubled: he ends up looking both a) guilty of whatever he accused Obama of and b) totally hypocritical.

I've counted at least three of these "Boomerang Attacks" in the past few days. The first came last Friday with the release of "Nothing New," a web ad slamming Obama for not saying "whether he supported or opposed the government-backed rescue of insurance giant AIG." The point, of course, was to portray Obama as an indecisive neophyte unprepared for the presidency. A "true leader," the ad implied--a leader like, say, John McCain--would've taken a bold and unequivocal stand. The only problem? McCain was even more wishy-washy on the bailout than Obama. Asked last Tuesday on "Today" whether the government should intervene in the AIG meltdown, McCain was pretty clear. "They're on their own," he said. The next day, however--after the Fed announced it would step in--McCain had softened his stance, admitting on "Good Morning America" that "there are literally millions of people whose retirement, whose investment, whose insurance were at risk." It's not that Obama was a angel here. Unlike McCain, he played the weasely Clintonian game of distinguishing between "supporting" and "not second-guessing" the $85 million bailout, even going so far as to express outrage that anyone would confuse the two positions. It's that McCain's attack gave the Illinois senator an easy opportunity to bite back--and ultimately made McCain look worse than his opponent, not better. "On Tuesday, [McCain] said the government should stand aside and allow one of the nation’s largest insurers AIG, to collapse... despite the possibility that it would put millions of Americans at risk," Obama told a crowd of thousands at a northern New Mexico rally last Thursday. "But by Wednesday, he changed his mind." In other words, I'll see your indecision, Senator--and raise you one whole flip-flop, with a little bit of hypocrisy to sweeten the pot.

You'd think Team McCain would've learned its lesson. Apparently not. Hot on the heels of the AIG onslaught came an even more hypocritical attack from Crystal City--this one regarding Obama's ties to Fannie Mae and Freddie Mac, the failed mortgage behemoths. In a pair of ads ("Jim Johnson" and "Advice") and a speech Friday in Green Bay, Wisc., McCain pilloried Obama for associating with former Fannie Mae CEOs Jim Johnson and Franklin Raines. "While Fannie Mae was betraying the public trust, somehow its former CEO [Johnson] had managed to gain my opponent's trust to the point that Senator Obama actually put him in charge of his vice presidential search," said McCain. "Another CEO for Fannie Mae, Mr. Raines, has been advising Senator Obama on housing policy... Senator Obama may be taking their advice and he may be taking their money, but in a McCain-Palin administration, there will be no seat for these people at the policy-making table. They won't even get past the front gate at the White House."

Never mind the fact that Raines never actually advised Obama on anything. The real problem here is that McCain's campaign is swarming with 26 advisers or fundraisers who have lobbied for Fannie Mae or Freddie Mac--including nearly a dozen who lobby right now. As the Washington Monthly's Steve Benen wrote last week, "one of McCain's top policy advisers, Charlie Black, was lobbyist for Freddie Mac for 10 years, while his campaign manager, Rick Davis, lobbied to help Fannie and Freddie steer clear of additional federal regulations [and earned $2 million in the process]... Tom Loeffler, who serves McCain's campaign co-chairman, also lobbied for Fannie Mae. Aquiles Suarez, a McCain economic adviser, was a Fannie Mae executive. Dan Crippen, a McCain adviser who helped craft the campaign's health-care policy, lobbied for Fannie Mae (and Merrill Lynch). Arthur B. Culvahouse, who helped lead McCain's VP search committee, also lobbied for Fannie Mae." According to former Fannie Mae executive William Maloni, "photographs of Sen. McCain's staff... loo[k] to me like the team of lobbyists who used to report to me." Without these ties--which are far more extensive than Obama's--McCain would have every right to say that associating with officials from troubled financial institutions is a sign of bad judgment. Again, it's not like Obama's hands are spotless. But with them, McCain offers Obama an otherwise unavailable opportunity to remind voters that McCain's own judgment--at least by McCain's own standards--is worse. So much for "no seat... at the table."

With this brief history in mind, I'm betting that McCain's latest attack ad--the start of a new effort to transform Obama "into a scheming insider-urban-machine politician," according to the Atlantic's Marc Ambinder--will backfire as well. Called "Chicago Machine," it's meant to distract the media--and the electorate--from the latest economic news by resurrecting stories about Obama's ties to "unsavory" Chicago figures like Mayor William Daley, Governor Ron Blagojevich, State Senator Emil Jones and developer Tony Rezko. Leaving aside questions of whether any of these links are relevant--Obama was opportunistic and ambitious in Chicago, but "corrupt" is a tough sell--I suspect that McCain's attack has opened the door for Obama to launch a rather obvious counteroffensive of his own: on Washington, D.C. Obama could call McCain a creature of the capital--yet again. Or he could remind voters that McCain was actually, you know, involved in a real political scandal related to financial regulation (unlike Obama himself). Either way, the Republican nominee has given his rival yet another chance to say "I know you are"--in this case, part of an unethical politician culture--"but what am I?" And while Chicago may be shady, it's nowhere near as radioactive as Washington, D.C.

Beware of falling glass.

You have been beaten to this one............

Nice opinion piece though

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[rushmc 23]

Lets keep em going then.......

http://www.businessandmedia.org/printer/2008/20080924145932.aspx



Media Mum on Barney Frank's Fannie Mae Love Connection
Democratic House Financial Services Committee Chair promoted GSEs while former 'spouse' was Fannie Mae executive.

By Jeff Poor
Business & Media Institute
9/24/2008 4:00:57 PM


Are journalists playing favorites with some of the key political figures involved with regulatory oversight of U.S. financial markets?



MSNBC’s Chris Matthews launched several vitriolic attacks on the Republican Party on his Sept. 17, 2008, show, suggesting blame for Wall Street problems should be focused in a partisan way. However, he and other media have failed to thoroughly examine the Democratic side of the blame game.



Prominent Democrats ran Fannie Mae, the same government-sponsored enterprise (GSE) that donated campaign cash to top Democrats. And one of Fannie Mae’s main defenders in the House – Rep. Barney Frank, D-Mass., a recipient of more than $40,000 in campaign donations from Fannie since 1989 – was once romantically involved with a Fannie Mae executive.



The media coverage of Frank’s coziness with Fannie Mae and his pro-Fannie Mae stances has been lacking. Of the eight appearances Frank made on the three broadcasts networks between Jan. 1, 2008, and Sept. 21, 2008, none of his comments dealt with the potential conflicts of interest. Only six of the appearances dealt with the economy in general and two of those appearances, including an April 6, 2008 appearance on CBS’s “60 Minutes” were about his opposition to a manned mission to Mars.



Frank has argued that family life “should be fair game for campaign discussion,” wrote the Associated Press on Sept. 2. The comment was in reference to GOP vice presidential nominee Sarah Palin and her pregnant daughter. “They’re the ones that made an issue of her family,” the Massachusetts Democrat said to the AP.



The news media have covered the relationship in the past, but there have been no mentions since 2005, according to Nexis and despite the collapse of Fannie Mae. The July 3, 1998, Reliable Source column in The Washington Post reported Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his “spouse.” Another Washington Post report said Frank called Moses his “lover” and that the two were “still friends” after the breakup.



Frank was and remains a stalwart defender of Fannie Mae, which is now under FBI investigation along with its sister organization Freddie Mac, American International Group Inc. (NYSE:AIG) and Lehman Brothers (NYSE:LEH) – all recently participants in government bailouts. But Frank has derailed efforts to regulate the institution, as well as denying it posed any financial risk. Frank’s office has been unresponsive to efforts by the Business & Media Institute to comment on these potential conflicts of interest.



While the relationship reportedly ended 10 years ago, Frank was serving on the House Banking Committee the entire 10 years they were together. The committee is the primary House body which along with the Office of Federal Housing Enterprise Oversight (OFHEO) has jurisdiction over the government-sponsored enterprises.



He has served on the committee since becoming a congressman in 1981 and became the ranking Democrat on the committee in 2003. He became chairman of the committee, now called the House Financial Services Committee, in 2007.



Moses was the assistant director for product initiatives at Fannie Mae and had been at the forefront of relaxing lending restrictions at the company for rural customers, according to the Feb. 23, 1998, issue of National Mortgage News (NMN).



“Herb Moses, who helped develop many of Fannie Mae’s affordable housing and home improvement lending programs, has left the mortgage industry,” Darryl Hicks wrote for NMN. “Mr. Moses - whose last day was Feb. 13 - spent the past seven years at Fannie Mae, most recently as director of housing initiatives. Over the course of time, he played an instrumental role in developing the company’s Title One and 203(k) home improvement lending programs.”



Hicks explained in his story how Moses orchestrated a collaborative effort between Fannie Mae and the Department of Agriculture.

“The Dartmouth grad also played a crucial role in brokering a relationship between Fannie Mae and the Department of Agriculture,” Hicks wrote. “This led to the creation of Fannie Mae’s rural housing program where the secondary marketing agency agreed to purchase small farm loans insured through the department.”



While Moses served at Fannie Mae and was Frank’s partner, Frank was actively working to support GSEs, according to several news outlets.



In 1991, Frank and former Rep. Joe Kennedy, D-Mass., lobbied for Fannie to soften rules on multi-family home mortgages although those dwellings showed a default rate twice that of single-family homes, according to the Nov. 22, 1991, Boston Globe.



BusinessWeek reported in its Nov. 14, 1994, issue that Fannie Mae called on Frank to exert his influence against a Housing & Urban Development proposal that would force the GSE to focus on minority and low-income buyers and police bias by lenders regardless of their location. Fannie Mae opposed HUD on the issue because it claimed doing so would “ignore the urban middle class.”



Moses left Fannie in 1998 to start his own pottery business. National Mortgage News called Moses a “mortgage guru” and said he developed “many of Fannie Mae's affordable housing and home improvement lending programs. Moses ended his relationship with Frank just months after he left Fannie.



Even after the relationship ended, however, Frank was a staunch defender of Fannie Mae even as other experts suggested there were serious problems building in Fannie Mae and Freddie Mac.



According to an article by Kathleen Day in the Oct. 8, 2003, Washington Post, Frank opposed giving the Bush administration the right to approve or disapprove business activities that “could pose risk to the taxpayers.” He told the Post he worried the Treasury Department “would sacrifice activities that are good for consumers in the name of lowering the companies’ market risks.”



Just a month before, Frank had aggressively thwarted reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Mac’s problems were “exaggerated,” a gross miscalculation some five years later with costs estimated to be in the hundreds of billions.



“These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis,” Frank said to the Times. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”



Frank has also reaped campaign contribution benefits from Fannie Mae and its counterpart Freddie Mac. According a front page story in the Sept. 19, 2008, Investor’s Business Daily by Terry Jones, Frank has received $40,100 in campaign cash over the past two decades from the GSEs.



Frank is ranked 16th on a list that includes both houses of Congress and fifth among his colleagues in the House. According to data from the Center for Responsive Politics’ OpenSecrets.org, political action committees financed by both Freddie and Fannie have contributed $3,017,797 to members of Congress since 1989. And according to the July 16 issue of Politico, the two entities have spent a whopping $200 million to buy influence – including not only campaign donations to members of Congress, but also presidential campaigns and lobbying efforts.



In a July 23 op-ed, Wall Street Journal Editorial Page Editor Paul Gigot put the blame for the GSEs’ collapse firmly on the members of the liberal establishment who took money from Freddie and Fannie. “Fan and Fred also couldn't prosper for as long as they have without the support of the political left... This includes Mr. Frank and Sen. Chuck Schumer (D., N.Y.) on Capitol Hill, as well as Mr. [Paul] Krugman and the Washington Post's Steven Pearlstein in the press.”



Frank was asked by CNN’s John Roberts on the Sept. 22, 2008 “American Morning” about this and his opposition to reform Fannie Mae and Freddie Mac. Originally, he claimed he didn’t think the two GSEs were facing any problems when the issue first surfaced in 2003. He instead blamed the Republican-controlled Congress for their ultimate fall, failing to mention his friendly relationship with Fannie Mae and the contributions it had made to his campaign over the years.



“Yes, I did not think we were facing a crisis in 2003, but that didn't mean we didn't have to have reform,” an animated Frank said when confronted with the question. “Here’s the deal, the Republicans controlled Congress from 1995 through 2006. They did zero to reform Fannie Mae and Freddie Mac.”



However, on Sept. 17, 2008, former Bush administration Deputy Chief of Staff Karl Rove elaborated on the Bush administration’s efforts to curb abuses at the two GSEs in 2003. He told Fox News’ “Hannity & Colmes” that Frank was among the most aggressive opponents of White House attempts to reform Fannie Mae and Freddie Mac.



“All of this bad stuff on Wall Street happened because people got greedy and the greed started at Fannie Mae and Freddie Mac,” Rove said. “And I know this because five years ago, the administration was alerted by the regulator, James Lockhart, that there was insufficient authority and that these institutions – particularly Fannie – were out of control.”



Rove said the Bush administration’s efforts to reform Fannie and Freddie were opposed by congressional Democrats – specifically Frank and Senate Banking Committee Chairman Christopher Dodd, D-Conn.



“And I got to tell you, for five years, I was part of an effort at the White House to fight this and our biggest opponents on the Hill who blocked this every step of the way were people like Chris Dodd and Barney Frank. And Fannie and Freddie are the $200 billion contagion at the center of this.”



Frank has been quick to blame deregulation for some of the problems in the financial environment, as he did on Bloomberg television’s Sept. 19 “Political Capital with Al Hunt.” However, as earmark crusader Rep. Jeff Flake, R-Ariz. pointed out – it’s not deregulation, but it was the structure of Fannie Mae and Freddie Mac that had been guarded by Frank and other members of Congress.



“Some people point at deregulation,” Flake said to the Business & Media Institute on Sept. 23. “It’s not deregulation at all. We have for far too long shielded Fannie and Freddie for example, with the implicit and now explicit guarantee. I just found it humorous.”



Flake specifically named Frank as one of the members behind letting allegations of transgressions at the two GSEs for slipping by without oversight from Congress.



“Just a few minutes ago, a reporter was asking me about this and saying, ‘Barney Frank is saying that’s just – because there were allegations,’ correct ones – ‘that Fannie and Freddie have been the playground for politicians for years and now the other side is saying Fannie and Freddie were just a small part of this and this goes far beyond.’ It does, but these same people a couple of weeks ago said, ‘You got to bail out Fannie and Freddie because they touch everything out there. They touch nearly every mortgage out there.’ And because of that explicit guarantee – that we would come and bail them out, nobody has been subject to market discipline.”



Frank claims differently, according to a letter to the editor published in the Sept. 17, 2008 Wall Street Journal. Frank noted that in 2005 he supported regulating compensation for Fannie and Freddie executives.



“In fact, my reform efforts had begun when we were still in the minority. In 2005, I joined Michael Oxley, then chairman of the House Financial Services Committee, in supporting legislation to increase the regulation of Fannie and Freddie that passed the House by a vote of 330 to 90,” Frank wrote. “When former Congressman Richard Baker proposed to examine the compensation structure of Fannie and Freddie's top executives, and some members of Congress tried to block him, I explicitly spoke out in support of his right to do that and our right, as a Congress, to examine the GSE’s compensation practices.”



The red flags were raised long before the government bailed out the two GSEs in August 2008. The first egregious scandal involving Fannie Mae occurred in 2004. A 2004 Wall Street Journal editorial was first to point out claims in an OFHEO report that showed accounting malpractices by the GSE.

“For years, mortgage giant Fannie Mae has produced smoothly growing earnings. And for years, observers have wondered how Fannie could manage its inherently risky portfolio without a whiff of volatility, the Oct. 4, 2004, editorial, “Fannie Mae Enron?” said. “Now, thanks to Fannie’s regulator, we know the answer. The company was cooking the books. Big time.”

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[rushmc 23]

One of the KEY points in the post above

"Frank has been quick to blame deregulation for some of the problems in the financial environment, as he did on Bloomberg television’s Sept. 19 “Political Capital with Al Hunt.” However, as earmark crusader Rep. Jeff Flake, R-Ariz. pointed out – it’s not deregulation, but it was the structure of Fannie Mae and Freddie Mac that had been guarded by Frank and other members of Congress. "

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[tkhayes 348]

does not actually matter what Bush said or tried to say or called for or whatever. The FUNDAMENTAL beliefs of Bush and the Republican party are that the govt should NOT be involved, and let capitalism do their damndest.

So there was no intervention. Now they are trying to save the election by going against their own beliefs just because everyone is screaming for a quick fix- McCain and the GoP will look pretty bad if the market collapses.

The fact of the matter is that SOME regulation is required to manage the markets and the banks.

This is not all to blame on one person or one party, but it could have been minimized by many tactics from many sources, from the government to the SEC to the corporations to the general public.

However, laying blame does not fix it. i no longer believe that these is a fix. I believe that everything is coming down, whether or not we spend $700B, so therefore I believe we should not spend it and let the chips fall where they may.

[rushmc 23]

Quote

does not actually matter what Bush said or tried to say or called for or whatever. The FUNDAMENTAL beliefs of Bush and the Republican party are that the govt should NOT be involved, and let capitalism do their damndest.

So there was no intervention. Now they are trying to save the election by going against their own beliefs just because everyone is screaming for a quick fix- McCain and the GoP will look pretty bad if the market collapses.

The fact of the matter is that SOME regulation is required to manage the markets and the banks.

This is not all to blame on one person or one party, but it could have been minimized by many tactics from many sources, from the government to the SEC to the corporations to the general public.

However, laying blame does not fix it. i no longer believe that these is a fix. I believe that everything is coming down, whether or not we spend $700B, so therefore I believe we should not spend it and let the chips fall where they may.

I mostly agree except only to add that we need to fully understand ALL that is involved with this and who.

If we do not take those steps (to learn the causes) then polititions (and some CEO's) will play in the money sand pit for their own rewards over and over again.

Let the chips fall. But blaming (on its own) deregulation, is an attempt by the gov to blame the private sector for its own crimial behavior

"America will never be destroyed from the outside,
if we falter and lose our freedoms,
it will be because we destroyed ourselves."
Abraham Lincoln

[Amazon 7]

Quote

Media Mum on Barney Frank's Fannie Mae Love Connection

Gee I didnt think you were into watching that kind of thing.....just prurient interest???