(UPDATED 9/29/08 with video at bottom of post)
(UPDATE #2 – VOTE IN HOUSE FAILS 228-205!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!)
The situation with the economy and credit locking up on Wall Street is enough to drive me crazy!
Picture of the WOLVES guarding the HENHOUSE (Pic: MichelleMalkin.com)
But when you have to mix in the likes of Pelosi, Reid, Schumer, Frank, Dodd and Obama, it is unbearable!
Word today is that a plan has been agreed to. You can review a summary at Michelle Malkin.
This is an extremely frustrating exercise to watch. The same people who are mostly responsible for getting us into this mess, now claim they are getting us out….(I’ll get to how this mess started further below.)
An interesting thing to remember as you read about this bailout is that the Democrats probably have enough votes to pass the bill without House Republicans.
Pelosi and the Democrats, similar to last week and last week’s version of the plan, are counting on the Republicans to vote for the bill in large numbers so that if the plan goes sour, the Democrats haven’t voted alone on a failure to correct the financial crisis.
A little background of the past few days….last week, as Christopher Dodd has even stated, the Democrats failed to include House Republicans at the table in working out a Bail Out plan. When McCain decided to insert himself, sided with House Republicans in the White House meeting, and brought those Republicans to the table, the Democrats claimed the Republicans put a kink in the plans that had been agreed to…
Of course, the Democrats claimed a plan had been agreed to last Thursday in an attempt to pre-empt John McCain in his efforts to solve the problem. The Democrats knew they had not included House Republicans in the planning, yet they still wanted the support of the Republicans for political coverage, and then turned around and blamed those same Republicans for disagreeing with a plan for which they had no part in negotiating.
So, it seems to me that if the Democrats have the majority in both houses of Congress AND have enough votes to pass the new Bill without the House Republicans, I think the House Republicans should vote NO on the bill even if it has incorporated some of the items the Republicans requested after they came to the negotiating table. (Unfortunately, since McCain has inserted himself in the process to fix the financial problem, politically he is probably forced to go along with the bill in whatever form it becomes.)
My reasons for believing Republicans should vote NO is that from all I’ve read about this issue, the American public is outraged that this crisis has occurred and because of the corruption that has made many involved in these failing companies multimillionaires. Now, we, the taxpayer, are being forced to bail out Wall Street and hand over much of Wall Street’s market power to the power-hungry wolves in Washington DC.
(Just tonight, Michelle Malkin has laid out very clearly why this Bail Out plan is bad for America, and is arguably unconstitutional.)
Speaking of the hungry wolves in Washington, let’s get our facts straight on the roles that Congress and the Presidents had in this mess.
The main reason for the financial crisis is that Fannie Mae and Freddie Mac were approving loans to those individuals who could not afford them. Back in the early 1990’s, the Clinton administration, in particular, brought pressure to bear on these companies if a sort of “quota” was not met in giving home loans to minorities and others who couldn’t afford the mortgages.
As Rich Lowry from National Review puts it:
“The root of this crisis is subprime loans lavished on people who couldn’t truly afford their homes. This bad debt was securitized — i.e., chopped up — and spread throughout the system as complicated financial instruments.”
Thus, this is the way that many institutions are now party to the crisis that we have.
Also, in 1991, as stated in the Wall Street Journal:
“The first head of Mr. Obama’s vice-presidential search committee, Jim Johnson, a former chairman of Fannie Mae, was the one who announced Fannie’s original affordable-housing program in 1991 — just as Congress was taking up the first GSE regulatory legislation.
Over the years Fannie Mae and Freddie Mac increasingly continued the practice of making bad loans and spreading the bad debt. They also were caught in the midst of an accounting scandal in the 2003-04 time frame. In 2003, Alan Greenspan requested more oversight of the companies, but by 2006, the bad loan practices snowballed. From the Wall Street Journal:
Subprime and Alt-A originations in the U.S. rose from less than 8% of all mortgages in 2003 to over 20% in 2006. During this period the quality of subprime loans also declined, going from fixed rate, long-term amortizing loans to loans with low down payments and low (but adjustable) initial rates, indicating that originators were scraping the bottom of the barrel to find product for buyers like the GSEs.
Seeing their success and not wanting oversight from Congress, the leaders of Freddie and Fannie continued to convince Congress that they were the “champions of affordable housing”. It worked…Fannie Mae and Freddie Mac were allowed to continue their practices with the blessing of Democrats like Barney Frank, Christopher Dodd, and others.
How did Fannie and Freddie “convince” Congress? How about campaign donations and Democrat cronies being splashed with cash.
Christopher Dodd and Barack Obama received the #1 and #2 spots in the amount of campaign cash they received from Freddie Mac and Fannie Mae…..can you say prid quo pro?
The top three U.S. senators getting big Fannie and Freddie political bucks were Democrats and No. 2 is Sen. Barack Obama. Now remember, he’s only been in the Senate four years, but he still managed to grab the No. 2 spot ahead of John Kerry — decades in the Senate — and (below) Chris Dodd, who is chairman of the Senate Banking Committee……
……. 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 — Sen. Obama — was at the head of the line when the piggies lined up at the Fannie and Freddie trough for campaign bucks.
Sen. Barack Obama: No. 2 on the Fannie/Freddie list of favored politicians after just four short years in the Senate.
Next time you see that ad, you might notice he fails to mention that part of the Fannie and Freddie problem.
Fannie and Freddie were also vehicles for Democrat friends and cronies to make millions.
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. Jamie Gorelick — Clinton Justice Department official — worked for Fannie and took home $26 million.Big Democrat Jim Johnson, recently on Obama’s VP search committee, has hauled in millions from his Fannie Mae CEO job.
Please note that Frankline Raines and Jim Johnson have been, and likely remain, advisers to the Obama campaign.
Over the past couple of weeks, in an effort to conceal the real blame, the Democrat talking points on this crisis has been that the Republicans and the Bush Administration are to blame for this mess. Unfortunately it appears that many of our fellow Americans are believing it.
While the Bush Administration did, at one time tout the “no down-payment mortgage” idea, the Democrats are primarily to blame….
……a (New York Times) storyfrom September 2003, clearly showing that the first substantive Fannie and Freddie reform from inside government came from the Bush administration. Spurred by worries that Fannie and Freddie were cooking their books and taking too many risks, Treasury Secretary John Snow proposed placing the companies under Treasury oversight with strict controls over risk and capital reserves. The NYT labeled the proposal “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago” and noted:
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.
So five years ago, there was one of those rare moments in Washington when the branches and personalities of government—in this case, the Bush administration—are less interested in protecting or expanding their turf than in fixing a looming catastrophe. What was Frank’s response to the proposal?
“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.”
Further, Bush had stated 17 times since 2001, in one way or another, that Fannie Mae and Freddie Mac needed more oversight and the practices of these firms could be detrimental to the economy. John McCain also warned about it numerous times and spoke up for reform when a 2005 bill was being considered. Obama was silent.
From the Wall Street Journal :
In 2005, the Senate Banking Committee, then under Republican control, adopted a strong reform bill, introduced by Republican Sens. Elizabeth Dole, John Sununu and Chuck Hagel, and supported by then chairman Richard Shelby.The bill prohibited the GSEs from holding portfolios, and gave their regulator prudential authority (such as setting capital requirements) roughly equivalent to a bank regulator. In light of the current financial crisis, this bill was probably the most important piece of financial regulation before Congress in 2005 and 2006. All the Republicans on the Committee supported the bill, and all the Democrats voted against it. Mr. McCain endorsed the legislation in a speech on the Senate floor. Mr. Obama, like all other Democrats, remained silent.
In fact, the same party, the Democrats, who stopped the 2005 bill are now blaming the Republicans.It is quite possible we wouldn’t be in this mess today if that bill had been brought to the floor.
Again, from the WSJ:
If the Democrats had let the 2005 legislation come to a vote, the huge growth in the subprime and Alt-A loan portfolios of Fannie and Freddie could not have occurred, and the scale of the financial meltdown would have been substantially less. The same politicians who today decry the lack of intervention to stop excess risk taking in 2005-2006 were the ones who blocked the only legislative effort that could have stopped it.
In summary, it seems to me to be just a game being played when those who are most responsible for getting us into this mess are now leading the charge to supposedly “get us out”….don’t bet on it…..
While I am not 100% convinced that the “crisis” is as urgent as has been portrayed, it does appear, however, that something serious must be done to prevent credit markets from seizing up.
It appears that relief MIGHT be coming in the form of $700 Billion with or without many Republicans in Congress. If for no other reason than protesting the very wolves who guard the chicken house, the House Republicans should vote NO!
View this video showing excerpts from 2004. What you will see clearly is the Republicans calling for reform for Fannie Mae and Freddie Mac and multiple Democrats saying there is nothing wrong with Fannie and Freddie…..make no mistake…this mess lies largely on the shoulder of the very Democrats who are trying to bamboozle us in their efforts to “fix” the problem….(along with some of the spineless willing Republicans in Congress.)
Filed under: 2008 Presidential election, Barack HUSSEIN Obama, George W Bush, John McCain, Politics, Progressives Ain't | Tagged: Barack Obama, Barney Frank, Bill Clinton, Chris Dodd, Fannie Mae, Financial Bail Out, Freddie Mac, George Bush, House Republicans, John McCain, Politics, Secretary Paulson, subprime loans, Wall Street, Wall Street greed | 5 Comments »