By Ross Balano, Midwest Voices Columnist 2008
From Barack Obama to Nancy Pelosi and on down the Democrat ladder can be heard the shrill voices blatantly lying through their teeth blaming George W. Bush for the collapse of Fannie Mae and Freddie Mac. This is simply not true.
In a New York Times article published September 11, 2003, The Times reported that indeed it was Bush who wanted more and tighter regulation. It was Bush who saw the problems in the future and proposed legislation to head off these problems with Democrats fighting against it.
You can read the entire article here but here are a couple of important excerpts:
“The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.”
“Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.”
“The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.”
''There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,'' Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.
“Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.”
And then goes on to say:
“Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.”
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
“Representative Melvin L. Watt, Democrat of North Carolina, agreed.”
''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.
For Democrats to try to lay the blame for this mess at the feet of Republicans alone is nothing less than shameful.
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Freddie Mac / Fannie Mae claim rebuttal
It's funny how the anti-oversight Republican right-wingers are trying to foist blame on the Democrats for their own lack of oversight during the Bush tenure.
Because I enjoy cutting through right-wing bs, here's Representative Frank's response:
Sam Dealey's recent blog post, "Barney Frank's Fannie and Freddie Muddle", on September 10, 2008, stretches the truth beyond recognition to attack me. While I will use the remainder of this blog post to refute, and therefore tell the truth, of my involvement with the regulatory oversight of Fannie Mae and Freddie Mac, I am very curious as to why Mr. Dealey did not reach out to me to find out the truth. I assume for some Washington, DC, based editorial writers it is easier to make assumptions—however wrong—and make accusations based on those wrong assumptions rather than to make a simple phone call.
Mr. Dealey points to comments made by former Treasury Secretary John Snow as evidence that reform of the Government Sponsored Enterprises of Fannie Mae and Freddie Mac were "called" for by the Bush Administration as the basis for the attack against me, but please note he does not list GSE reform as an accomplishment of Mr. Snow's tenure at Treasury or the first seven years of the Administration—that did not happen until the eighth year of the Bush term when a bill that I authored was enacted into law. The President and Mr. Snow failed to deliver—even when their party was in charge of both houses of Congress.
Dealey then cites comments I made in 2003 that the GSEs are not in trouble as evidence that I did not support reform. Wrong. I supported reform then, I support reform now and I delivered. Dealey also fails to report that the Bush Administration did not support the reform efforts of Republican former House Financial Services Committee Chairman Mike Oxley, who recently told the Financial Times that the White House gave him "the one-finger salute" for his efforts to bring about GSE reform.
I also supported—with major opposition from the Bush Administration and their conservative Congressional allies—a tough federal law against predatory lending, and I urged then-Federal Reserve Chairman Alan Greenspan to write regulations based on the Home Owners Equity Protection Act passed by a Democratic Congress in 1994. Those regulations would have outlawed many of the irresponsible lending practices that fueled the housing bubble and now threaten the entire economy. His successor, Ben Bernanke, issued these regulations last July after seeing the economically disastrous impact of an unregulated market. If we had a predatory lending law and had Greenspan acted on authority he was given, we might have avoided the subprime crisis entirely. The Democratic majority also delivered, with the help of our Committee's Ranking Member, Rep. Spencer Bachus (R-AL), on a mortgage reform and anti-predatory lending law in 2007.
In addition, the author points to the fact that I voted against GSE reform in 2005, but does not tell readers why. The Republican majority inserted language at the last minute that would prohibit religious organizations from participating. The Catholic and Lutheran churches, and many others, sponsor some of the best not- for-profit housing development organizations in the country. It is only because of this ridiculous action by arch-conservative Republicans that I cast my vote "no". It was not because I was opposed to tougher regulations and oversight of Fannie Mae and Freddie Mac.
The House Financial Services Committee, which I chair, moved aggressively after we took over as the majority party in January, 2007, and passed GSE Reform in March of 2007. We worked cooperatively with Treasury Secretary Hank Paulson to strengthen the bill and the full house voted for GSE reform in early May 2007. I also proposed to Secretary Paulson that we include GSE reform in the stimulus package passed by Congress in January 2008, but he declined, citing problems with the White House with this approach. Now, thanks to the efforts of the Democratic majority, and thanks to the work of former-Chairman Mike Oxley, President Bush can finally count GSE reform as an accomplishment.
A simple phone call to my office would have helped Mr. Dealey get his facts straight.
http://www.usnews.com/blogs/sam-dealey/2008/9/12/speaking-frank-ly--barney-frank-fires-back-on-fannie-mae-and-freddie-mac.html
It appears that Mr. Balano is simply mindlessly repeating his party line, with no attempt to find out what actually took place.
Blame for Fannie Mae
To Wunderwood, you obviously have only listened to the liberal spin machines and nothing else, nor done any independent research. Fannie WAS in trouble five years ago. Did you not see the 2004 hearing tape that was played on CSpan, or read any older articles from WSJ or even NYT from 2003 or sooner? Here's some additional facts to consider. At the time you say there were no problems, Mr. Raines was forced to resign for overstating earnings by billions to increase his bonuses, while at the same time on that tape "they" (Maxine Waters, Barney Franks and others) are excoriating those testifying about impending problems and need for regulation. They said those who wanted to regulate were the problem. They said there was a witchhunt against Franklin Raines - a man who fudged numbers for his personal gain. Someone on another blog put it very well when he said this:
Back in 2004, Fannie was embroiled in an accounting scandal and in October of that year, the House conducted hearings. According to the Wall Street Journal, the staunchest defenders of Fannie were members of the Congressional Black Caucus. By a strange coincidence, the Fannie Mae Foundation was making annual contributions to the Caucus. And get this – Maxine Waters (D-CA) “cooed all over Mr. Raines” and Clay Lacy (D-MO) “played the race card by calling the hearings a ‘political lynching’ of Mr. Raines.”
That's a pretty good description of what's on that tape, minus Barney Frank's stupid musings. They were either willfully ignorant or dumb, or just wanted the money to come in. Face it - from Jamie Gorelick to Raines to Johnson (who had his own scandals with Countrywide), they were pulling money out while not enough money was being paid back and they knew it. Eventually it gets to the point where the organization no longer has any money. I think they did just as bad things as Enron execs did, and I just hope some day I get to see their mugs doing a perp walk on TV. Hope they enjoyed their millions while they could, because it's not going to help behind bars.
Who done it
Five years ago,hmmmm. Isn't that about the time that McCain's campaign guy started getting paid $30,000/month (for five years) to help Freddie avoid these regulations? Seems that he did a good job.
What's wrong with the National Association of Home Builders?
Am I missing something? This article is a yawn.
Why is Ross Balano using such divisive terms like "shrill voices", "blatantly lying through their teeth". Is this supposed to convince anyone that isn't already sucking at the neocon teat?
Let's review...
A little over FIVE years ago when Senate Democrats were the minority party, Barney Frank said that the current Bush proposal had problems and needed improvement. He said that Fannie and Freddie were not facing any sort of immediate crisis. In 2003, they were not about to collapse. FIVE years later they were about to. Just last week, however, Senator John McCain said that the "fundamentals of our economy are strong".
McCain was famously wrong about that and one could also claim that Frank was wrong, but that was FIVE years ago. One could also claim that both of them were just putting a good face on the public perception of a financial entity, and that *hysteria* does not help in those situations.
Barney Frank didn't say the bill was a lost cause. He said it needed fixing. It sounds like the REPUBLICAN MAJORITY failed to get it passed two years ago. Did the Democrats stonewall it? Where is there any evidence? They said it was bad for low income homeonwers. Sounds like a legitimate issue, if true.
Let's also remember that between then and now, Bush wanted to privatize social security and ride a significant amount of it on the stock market. Sure, folks could choose to not participate, but if 100% didn't participate, why do it at all, and if a large number did participate (which presumably folks were to believe was a "good thing") then TODAY it would be a FLIPPING DISASTER. Thank god the Democrats killed that stupid idea. But I digress....
This is the quote that stands out to me in this current non-story:
Wait.
Are there some problems with listening to The Home Builders Association before passing this legislation? Why are they upset? What's the problem? Are they some liberal fringe group that the Republican party doesn't want to coddle? Hardly.
There may be more to this, but right now all I see is that the NAHB and some Democrats were skeptical. OK. That is the level of Democratic involvement in bringing the American economy to the brink of what may be Great Depression II?
The only thing you have proven to me, Alma........
Is your abject contempt for Mr. Balano and your lack of understanding of the realities of war or, perhaps complete intolerence of it.....which I can respect, by the way. Very few who have participated in one will wax fancifully about the experience.
Your contempt overflows in your sarcastic diatribe against Ross Balano, war hero.
Whether or not he served, just like you and the rest of us, he is entitled to his opinions......Maybe you just have a thing against Italian/Americans??
By the way (thanks to you) I found the link to Fund's piece in the Journal. It would appear that he was correct.
http://online.wsj.com/article/SB122098190668515511.html
And my aMAZEment grows and grows...
And the reason McCain didn't co-sponsor S. 1100 was...?
Democratic Fingerprints
Below is an editorial that appeared in the New Hampshire Union Leader that talks about Barney Frank and Chuck Schumer and their roles in the failure of Fannie Mae and Freddie Mac.
Here is the editorial in it’s entirely:
One month from tomorrow, U.S. Rep. Barney Frank, D-Mass., will be the keynote speaker at the New Hampshire Democratic Party’s annual Jefferson-Jackson dinner. It is a coveted and high-profile role previously filled by such notables as Hillary Clinton and Al Gore. The Democrats’ choice of House Financial Services Committee Chairman Barney Frank is, therefore, very revealing.
The party announced Frank as the keynote speaker on Sept. 11 — three days after the U.S. government took control of Fannie Mae and Freddie Mac, costing taxpayers untold billions. That takeover probably could have been prevented had Frank not worked to thwart every attempt to limit the risks taken on by the two government-sponsored mortgage giants.
For 16 years reformers in Congress have tried to improve oversight of Fannie Mae and Freddie Mac and prevent the government-chartered companies from putting the housing market and the whole economy at risk. All that time, Frank was involved in efforts to block those attempts, and in the last eight years he was a leader of those efforts.
In 2002, shortly before accounting irregularities were exposed at both companies, Frank said, “I do not regard Fannie Mae and Freddie Mac as problems,” The Wall Street Journal reported. After the Freddie Mac accounting scandal in 2003, Frank said, “I do not think we are facing any kind of a crisis.”
But there was a crisis, thanks in large part to Frank, Sen. Charles Schumer and others on the leash of these companies. In Congress, they made sure there was no additional oversight, no additional limit on executive behavior and compensation, and no further restraint on the growth of the companies’ mortgage-backed-securities portfolios, among other changes.
(All of these needed reforms, by the way, have been championed for years by Sen. John Sununu.)
In fact, Frank & Co. made matters worse by pushing Fannie Mae and Freddie Mac to take on greater risk. They wanted more loans to people who might not qualify for traditional bank financing. And, as The Wall Street Journal has pointed out, Frank “pressured regulators to ease up on their capital requirements — which now means taxpayers will have to make up that capital shortfall.”
Even now, after the government took the companies over (which Frank repeatedly said over the years was not a possibility), Frank opposes limits on the amount of money they can risk on mortgage backed securities — the one reform that might have done the most to prevent the current meltdown and probably would do the most to keep it from happening again.
BILL CLINTON AGREES THAT DEMOCRATS ARE TO BLAME
Bill Clinton Said In A Video That The Democrats To Blame for the Fannie Mae Meltdown
Jim Angle Report -
Fox News Report With Video
ABC NEWS REPORT INCLUDING CLINTON VIDEO:
Bill Clinton Interview
And The New Your Post Agrees:
New York Post Article
JAIL + GET THE MONEY BACK
WHO SHOULD OVERSEE THE FIX and WHO SHOULD BE HEADING TO JAIL?
Too many have fed at the trough. What Fannie Mae and Freddie Mac executives did was illegal. Taking their cash favors was morally bankrupt.
http://pacificgatepost.blogspot.com/2008/09/fanny-mae-freddie-mac-congressional.html
Still no time to panic, but some executives and some in Congress should see jail time.
I have proven it.
John Fund was the source, he never said it. You got something, bring it.
Now,
"If we would have had to kill every Japanese person to win that war then so be it. If we have to kill everyone on the side of the terrorists now to safeguard our country and our own innocent women and children then so be it."
Catch that? "Everyone on the side of the terrorists." "Every Japanese person." That's GENOCIDE, BALANO.
And you want to bring up ALL your B.S.? "The life of any of our service people is worth more than the all of those [sic] on the side of terrorists." July 3.
How about July 4th's gem? Bring it up yourself-I'm not typing that crap out. "Anyone who isn't anti-American knows that," yourass.
I don't know which branch you served with, chazzykc, but I don't remember that I ever had a DI brace us in boot camp and tell us how to kill kids. How to kill wives and mothers. How to kill anybody that Ross Balano, war hero, might consider a "supporter" of terrorists. Are their mothers "supporters," tough boy, or will you let them live if they abjure and disown their sons?