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Financial crisis: Dems try to rewrite history - again (update)
Posted by: McQ on Wednesday, September 17, 2008

As I pointed out below, Nancy Pelosi is clueless. Apparently history, at least for her, started after at least 2005.

As Ed Morrissey points out, 2005 would be the year John McCain made this speech:
Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.
Hot Air has the gist of the legislation he was supporting. The bill never made it out of the Senate committee. And remember, in 2005, the Senate was essentially an even body in terms of Dems and Reps.
Chris Dodd, then the ranking member of the Banking Committee and now its chair, was in the middle of receiving preferential loan treatment from Countrywide Mortgage, one of the companies gaming the system in the credit crisis.
Barack Obama? Well he hadn't shown up on the scene yet. But when he did, boy did he make up for lost time. Fox's John Gibson notes:
A group called the Center for Responsive Politics keeps track of which politicians get Fannie and Freddie political contributions. The top three U.S. Senators getting big Fannie and Freddie political bucks were Democrats and number two is Senator Barack Obama.

Now, remember, he has only been in the Senate four years but still managed to grab the number two spot ahead of John Kerry, decades in the senate, and Chris Dodd who is chairman of the Senate Banking Committee. Fannie and Freddie have been creations of the congressional democrats and the Clinton white house, designed to make mortgages available to more people, and as it turned out, some people who couldn’t afford them. Fannie and Freddie have also been places for big Washington Democrats to go to work in the semi-private sector and pocket millions. The Clinton administration’s White House budget director Franklin Raines ran Fannie and collected 50 million dollars. Jamie Gurilli, Clinton Justice Apartment Official, worked for Fannie and took home 26 million dollars. Big Democrat Jim Johnson, recently on Obama’s VP search committee has hauled in millions from his Fannie Mae C.E.O. job.

Now remember, Obama’s ads and stump speeches attack McCain and Republican policies for the current financial turmoil. It is demonstrably not Republican policy and worse, it appears the man attacking McCain, Senator Obama, was at the head of the line when the piggy’s lined up at the Fannie and Freddie trough for campaign bucks.
And, as I've cited twice, in 2003, two years earlier than the McCain speech, we have the Bush Administration pushing for reform and the Democrats saying the problems are an "exaggeration" and that there is no problem with Freddie and Fanny.

So the next time your hear Obama claim he doesn't take money from lobbyists, you know what to say (and cite). And the next time you hear Obama try to lay this exclusively at the feet of Republicans, you can pretty much point to the same information to refute that obvious bit of nonsense.

I know I keep going over this and stressing it, but this is important. It points to some major league dissembling on the part of the Democrats as they try to frame this as exclusively a Republican and administration failure when it fact, the blame lays mostly at their feet. The "great reformers", the "we don't deal with lobbyists" bunch, the group who claims to understand the economy, demand more regulation and have the best interests of Americans at heart simply don't have the facts, in this case, to support their assertions.

UPDATE: I was incorrect when I said Obama hadn't yet arrived in the Senate in 2005. He was elected in Nov. 2004 and was sworn in in Jan. 2005.
 
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Comments
So Bush and Republicans wanted to reform but those nasty congressional Democrats just wouldn’t let him? Ah yes I remember well the Democratic 106th, 107th and 108th congresses. Oh wait...
 
Written By: Retief
URL: http://
Yeah, you know that guy...Senator Filibuster.

Ah, but you know he’s a Republican now, and always has been.

Huh Retief.

 
Written By: looker
URL: http://
I hope the McCain camp can pull footage of these statements.

It would make an absolutely devastating ad.

And I’m sure there are some Republicans who are in just as deep. But McCain isn’t, and that’s the point.
 
Written By: Keith_Indy
URL: http://asecondhandconjecture.com
Given the Democratic response to Fannie and Freddie Mac, what lurks ahead for Social Security ?
 
Written By: Neo
URL: http://
The same thing they’ve always said

"there’s no problem, no crisis"

until it’s to late, and then they’ll say

"it’s the Republicans fault"
 
Written By: Keith_Indy
URL: http://asecondhandconjecture.com
Out of curiosity, what did the dems do to prevent this situation for the nearly two years that they held the majorities in both houses of Congress? And how did Bush and the GOP stop them?

Just askin’...
 
Written By: docjim505
URL: http://
So when Sen. Dodd claims he did nothing in return for that friendly mortgage he was accurate, depending on what your definition of nothing is.
 
Written By: timactual
URL: http://
Why is John McCain not hitting the talk shows with this? Where is his ad featuring clips of his 2005 speech or Barney Frank in 2003? Who is running this guy’s campaign? He could hit it out of the park with this one.
 
Written By: Jimmy the Dhimmi
URL: http://
He could hit it out of the park with this one.
Or is there something else we don’t yet know about....
 
Written By: meagain
URL: http://
Representative Jim Leach, Republican of Iowa, said Freddie Mac — short for the Federal Home Loan Mortgage Corporation — had borrowed $125 million in the bond markets on Monday at 6.99 percent, an interest rate reflecting the market’s belief that the Treasury had effectively guaranteed repayment.

Freddie Mac, whose charter calls for it to invest primarily in mortgages and mortgage securities, then used the $125 million to buy corporate bonds issued by the Philip Morris Companies with identical 10-year maturities yielding 7.68 percent.

Mr. Leach said that such an investment strategy might be legal, but that it was not appropriate. ’’Freddie Mac was established by an act of Congress for a specific purpose: to advance home ownership, not to facilitate tobacco sales,’’ he said. ’’What Freddie Mac’s action amounts to is taxpayer subsidization of corporate arbitrage and, implicitly, the tobacco industry.’’ — April 11, 1997
So where did this story lead ?
 
Written By: Neo
URL: http://
And the next time you hear Obama try to lay this exclusively at the feet of Republicans, you can pretty much point to the same information to refute that obvious bit of nonsense.
Hmmm. So this bill never passed because of Democrats?

http://krugman.blogs.nytimes.com/2008/09/10/one-finger-salute/

The Ohio Republican who headed the House financial services committee until his retirement after mid-term elections last year, blames the mess [at Fannie and Freddie] on ideologues within the White House as well as Alan Greenspan, former chairman of the Federal Reserve.

The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley, now vice-chairman of Nasdaq.

He fumes about the criticism of his House colleagues. “All the handwringing and bedwetting is going on without remembering how the House stepped up on this,” he says. “What did we get from the White House? We got a one-finger salute
.”

Now, I honestly don’t know much about what the democratic party might or might not have blocked in 2003, despite what I see here, which I trust as far as I can spit. I can imagine that, in a fit of overprotectism of their campaign cash, dashed with idealism about getting loans to poor people, various Democratic senators might have blocked a bill that might have been good.

But as this former Republican congressman seems to have a completely different story. The Bush Administration? Interested in some kind of financial regulation? Laughable. Contradicts everything any of their crew ever said in public for the first seven years of their term.

And the next time you hear Obama try to lay this exclusively at the feet of Republicans, you can pretty much point to the same information to refute that obvious bit of nonsense.

And remember, in 2005, the Senate was essentially an even body in terms of Dems and Reps.
It was 55-45, and there was no filibuster. The bill died in committee because it wasn’t supported by Republicans in the committee. If it had been, it could have passed even if every Democrat in the committee failed to vote for it. What was the vote, I wonder? How did it line up? Funny that you’ve failed to include that.

What a funny little alternate reality zone this place has become..

 
Written By: glasnost
URL: http://
Or is there something else we don’t yet know about....
Well, we know a lot and it doesn’t look pretty for the Democrats. Yet they just lie louder.

But then again, the MSM is covering for them.
 
Written By: Don
URL: http://
http://goliath.ecnext.com/coms2/summary_0199-5597303_ITM
The Senate moved its own GSE reform bill—the Federal Housing Enterprise Regulatory Reform Act of 2005 (S. 190)—out of committee, but along a strict party-line vote. The split between Republicans and Democrats centered on how much to limit the GSEs’ portfolios (see Mortgage Banking, September 2005, p. 8).

Stephen Naismith, HUD assistant secretary for congressional intergovernmental affairs, told attendees at MBA’s 92nd Annual Conference & Expo in Orlando, Florida, in October that the White House supports S. 190 over H.R. 1461 because of objections it has to the affordable-housing fund, and it wants a firm ceiling on GSE investments.

"HUD has already increased the affordable-housing goals for the GSEs, but there are other ways of getting the GSEs to increase their affordable-housing commitments," said Naismith. "We think there are other ways to get at the issue and make sure the GSEs are increasing their goals, and not have a fund that we think may be used for unintended purposes."
So, the White House wanted S. 190. Sounds like Bush was right on this.
 
Written By: Don
URL: http://
In my previous post, H.R. 1461 is the bill Krugman was wining about. Did he mention S. 190?
 
Written By: Don
URL: http://
Well, I read what Krugman wrote. Krugman didn’t mention S. 190, which amounts to a lie by obmission. So, our pet leftist Glastnost didn’t lie, he just quoted a lier.

Way to go Glassy, I’m proud of ya.
 
Written By: Don
URL: http://
Yet another thing. The housing bubble peaked around 2005, so by then the House and Senate bills were likely too little, too late. Or really, just plain too late.

Maybe if Bush got what he wanted in 2003, it would have done some good.
 
Written By: Don
URL: http://
"Barack Obama? Well he hadn’t shown up on the scene yet."

He was elected to the Senate in November 2004.

So he was most certainly in the Senate in 2005-06. You just didn’t see him anywhere near this issue.
 
Written By: Karl
URL: http://www.claudepate.com
"Who is running this guy’s campaign?"

Why, your usual Republican wizard strategists and master political analysts, of course. The political equivalent of the economic geniuses who ran Freddie and Fannie.
 
Written By: timactual
URL: http://
I’ll say it again for glasnost...
And I’m sure there are some Republicans who are in just as deep. But McCain isn’t, and that’s the point.
And I have no problem hoisting those who didn’t support it in committee up on their own petard.

They deserve it. Republicans and democrats.
The political equivalent of the economic geniuses who ran Freddie and Fannie.
No, they’re over in the Obama camp as actual economic advisors...
 
Written By: Keith_Indy
URL: http://asecondhandconjecture.com
McCain doesn’t remember this speech. Beyond that he probably did not know what he was saying as a free market friendly aid probably wrote it. He was to busy worrying about which amendments to attack next. He had already been successful in shredding the first amendment by then. And had set his sights on 4.
 
Written By: Scott Overpeck
URL: www.scottoverpeck.com
McCain goes on the attack in his stump speech today...

http://hotair.com/archives/2008/09/18/mccain-goes-on-offense-links-obama-to-credit-crisis/
Senator Obama talks a tough game on the financial markets but the facts tell a different story. He took more money from Fannie and Freddie than any Senator but the Democratic chairman of the committee that regulates them. He put Fannie Mae’s CEO who helped create this disaster in charge of finding his Vice President. Fannie’s former General Counsel is a senior advisor to his campaign. Whose side do you think he is on? When I pushed legislation to reform Fannie Mae and Freddie Mac, Senator Obama was silent. He didn’t lift a hand to avert this crisis. While the leaders of Fannie and Freddie were lining the pockets of his campaign, they were sowing the seeds of the financial crisis we see today and enriching themselves with millions of dollars in payments. That’s not change, that’s what’s broken in Washington.

...

Those same Congressional leaders who give Senator Obama his marching orders are now saying that this mess isn’t their fault and they aren’t going to take any action on this crisis until after the election. Senator Obama’s own advisers are saying that crisis will benefit him politically. My friends, that is the kind of me-first, country-second politics that are broken in Washington.

...

Today Senator Obama’s running mate said that raising taxes is patriotic. Raising taxes in a tough economy isn’t patriotic. It’s not a badge of honor. It’s just dumb policy.
 
Written By: Keith_Indy
URL: http://asecondhandconjecture.com
McCain doesn’t remember this speech. Beyond that he probably did not know what he was saying as a free market friendly aid probably wrote it. He was to busy worrying about which amendments to attack next. He had already been successful in shredding the first amendment by then. And had set his sights on 4.
Meds, Scott, take your meds. You sound like 30 lbs of crazy in a 10 lb bag.
 
Written By: capt joe
URL: http://
The 109th Senate was 55 GOP, 44 Dem, 1 Independent.
This is "essentially even"? The current Senate is 49-49-2. If it was the fault of the 2005 Democratic minority for not passing this legislation, why is it not the fault of the 2005 GOP majority? Why is it not the fault of the 2007 GOP "minority" It seems that "neolibertarian" = GOP shill.

I say this as a libertarian-libertarian. I’m not voting for Obama in November. Both major parties suck.
 
Written By: Bob Weber
URL: http://
The 109th Senate was 55 GOP, 44 Dem, 1 Independent.
When you have to have a 60 vote majority to pass anything then yes, that’s essentially even. In the Senate the minority holds much of the power because of that.
It seems that "neolibertarian" = GOP shill.
Or it could mean libertarian-libertarian = ignorant.
 
Written By: McQ
URL: http://www.QandO.net
You only need 60 votes if there’s a filibuster. The bill never even made it to the floor. Where was the filibuster threat?
Sheldon Richman did a quick debunking of the McCain "reform".
 
Written By: Bob Weber
URL: http://
You only need 60 votes if there’s a filibuster. The bill never even made it to the floor. Where was the filibuster threat?
Who said there was - I said the split was essentially even and that was why.

Your cite doesn’t debunk anything - it simply disagrees that the solution McCain favored is the best solution. Of course the writer, with present knowledge, thinks he has a better solution. 20/20 foresight?

Of course both he and you continue to ignore the fact that McCain was actually trying to address the solution at the time while freshman Senator Obama (oh wait, he’s still a freshman Senator, isn’t he?) never said a thing and didn’t manage to find time to cosponsor the bill.

But he certainly had time plenty of time to tuck in behind Chris Dodd as the Senator who took the most lobbying dollars from Freddy and Fannie, didn’t he?
 
Written By: McQ
URL: http://www.QandO.net
"You only need 60 votes if there’s a filibuster. The bill never even made it to the floor. Where was the filibuster threat?"
see http://goliath.ecnext.com/coms2/summary_0199-4747361_ITM for contemporaneous report as to what went on in the Senate Committee and why it did not get voted on by the full Senate...Supports "McQ".
You dims would not know the truth if it was running for President.

"GSE reform bill clears Senate Committee along party-line vote.(Business Alert)
Publication Date: 01-SEP-05
Publication Title: Mortgage Banking
Format: Online
Author: Wisniowski, Charles"

 
Written By: Joe
URL: http://
No mention yet of the Zero-Down Initiative or of the prime borrowers:


Zero-Down Initiative boston.com business

Zero-Down Initiative whitehouse.gov

High End Foreclosures realtytrac.com

After the 2005 Zero-Down initiative, foreclosures went from about 100,000 to 247,000, according to bloomberg.com

 
Written By: Jim
URL: http://
Correction: It should read "1,000,000 in 2005 to 2,470,000 foreclosures at the end of January 2008.

S. 2856 [109th]The Financial Services Regulatory Relief Act of 2006, was approved on October 13, 2006 after which the total number of foreclosures started to rise severely. There are certainly many other contributing factors, but the timing of this legislation is of interest. It was passed with support from both sides of Congress.
 
Written By: Jim
URL: http://

 
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