Given the recent mess that’s been made of the financial markets, a little digging is being done by folks all over. Bloomberg’s Kevin Hassett has done his own digging into the beginning of the end for Fannie May and Freddy Mac.
Fannie and Freddie became, “the primary customer of all AAA-rated subprime-mortgage pools.”
trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.
In 2005,
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.
Completely unacceptable. What about the “leading” members of congress that were supposed to protect the country from this mess?
But 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.
Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.
The Senate Banking Committee chairman and the Democratic nominee for president received more contributions than anyone else? How does this make any sense? How is that even legal? What about the bill that would have prevented this? Senate Bill 190, the Federal Housing Enterprise Regulatory Reform Act of 2005, had 3 cosponsors, one of them the Republican presidential nominee. Even if you know nothing about financial markets but this, who would you rather have in charge of the county?
One Comment
‘L, note that ol’ Kevin Hassett, per the bio at th’ end, is “director of economic-policy studies at the American Enterprise Institute. . . ‘n “an adviser to Republican Senator John McCain of Arizona in the 2008 presidential election.”
In otha words, Richie, “spin alert.”
Th’ financial downturn cain’t be blamed ohn one party; it is th’ doins of money men n’ statists who belohng t’ both parties. ‘N-iss-here symbeeohsis between big gummint ‘n big money has been with us a lohng, lohng time. I personally believe that we will soon reap th’ dread result of this tomfoolery. Some of th’ Foundin’ Fathers ‘n certain figures in early American history warned us ’bout all iss, Jefferson even goin’ so fir as t’ say th’ followin:
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
As t’ yir question ’bout who I wud rather see runnin’ th’ country, I simply cain’t see that th’ GOP is any better ohn th’ score than th’ Dems. Ol’ Joe Klein ‘xplains why:
http://www.time-blog.com/swampland/2008/09/their_brand_is_collapse.html
One cud even argue-att it wuz the “Party of Lincoln” that set much of this in motion back durin’ the time-a strife that led t’ th’ War fir Southern Independence. The division between th’ largely agrarain South ‘n th’ industrial, finance-centered North was one-a thangs contributed to sed strife. ‘L, th’ North winnin’ that war (or at least that phase of it
) commenced to make a nation in its own image. Weren’t but a hop, skip n’ a jumb betwixt the events of 1865 ‘n those-att led t’ th’ creation of the Fed thar in 1913. ‘N th’ rest is financial histry.
You now know wut Jefferson believed. If’n ye thank he’s right, wut are yir thots ’bout nationalizin’ th’ Fed, just as Congriss did to Fannie Mae ‘n Freddy Mac? If *ye* agree that this’d be in th’ best inturst of American, do ye thank some politian like ol’ Juan Mequeno wud agree with ye?