American Elephants


Who is Responsible for the Fannie/Freddie Mess? by American Elephant

Yes! Democrats are up to their eyeballs in this crisis. Republicans warned about it, Republicans tried numerous times to do something about it, Democrats blocked them every time!

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn’t become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn’t even get the Senate to vote on the matter. We now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years. [read the whole thing]

This is important. Polls show Americans currently favor the very same Democrats who got us into this mess to get us out of it. The very same Democrats who promise more of the same, who promise to do the exact same thing to healthcare.

But polls also show 18% of voters are undecided. Dems are furiously telling them that capitalism, and the same Republicans who tried to reform Fannie and Freddie are the ones responsible for this crisis. Now is the time to make sure they get accurate information.

(h/t Powerline)

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7 Comments so far
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I agree. The amount of corruption in the Democratic party is embarrassing to America. They pretend to care about Main street and helping people, but they just don’t practice what they preach. I noticed that conservatives FAR outgive the liberals in charities.

Comment by rick

Give credit where credit is due!

Both parties repealed the 1933 law that prevented this mega version of the S&L.Thank Phil Gram.

Thank the Fed!
And thank this administration.

Comment by batguano101

The attempt to blame Phil Gramm is nonsense. Has nothing to do with the current crisis. See:http://americanelephant.wordpress.com/2008/09/17/bush-and-mccain-each-tried-to-reform-fannie-mae-democrats-blocked-them-both-times/.

For years the Wall Street Journal has been warning that Fannie Mae and Freddie Mac were taking reckless chances, but liberal Democrats sneered, and blocked reform. In 2002, the Journal said”The time for the political system to focus on Fannie and Fred isn’t when we have a housing crisis; by then it will be too late.” In 2003, Gregory Mankiw, chairman of the Council of Economic Advisers expressed similar concerns to President Bush. Barney Frank criticized Mankiw, citing “concern for housing’ as his reason, and claiming fears were overblown.

Just last year Sen.Charles Schumer advocated legislation to allow Fannie and Freddie to increase their already huge role in the mortgage market. Chris Dodd is talking about extending the bailout from financial firms to homeowners facing mortgage foreclosures. Frank, Dodd, and Schumer (who was recently accused of causing a bank run) should recuse themselves from voting on this legislation.

Comment by The Elephant's Child

Its not just embarrassing, its causing great damage to America. Corruption that in great part caused this crisis, that led them to try to surrender a war they approved, that led them to undermine their country during war, and which threatens to do the same to the healthcare industry as they have done to the financial industry.

Comment by American Elephant

I like how the politicians build an economic swamp (Freddie and Fannie lending to everyone) and then blame the mosquitoes for showing up and giving us all malaria.

Comment by RW

[...] tell the mortgage industry who to loan money to, lawmakers are crafting a $700 billion bailout at taxpayer [...]

Pingback by Do you see the pattern yet? « American Elephants

Let us get the problem fixed “now” as President Bush wants to do.

Marie Jon

Comment by Marie




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