Back in September 2008, Brit Hume provided this timeline about FannieMae, FreddyMac, and the great economic collapse. Who was warning about the financial soundness of those institutions? Who reassured us — as late as the summer of 2008 — that they were “fundamentally sound”? This is a video that Sean Bielat, who is running against Barney Frank in Massachusetts (donate here), should air repeatedly until November 2.
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If Angle prevails in Nevada, Sen. Shumer will likely replace Reid as Senate Majority Leader. He’s as much to blame for the financial mess as Dodd and Frank.
Also, how gutless were the Republicans in ’05 and ’06 that they were afraid to proceed with McCain’s legislation? So what it the Democrats plan to filibuster, introduce the legislation and let Dodd, Shumer, and Clinton go on record opposing it.
Okay, I thought this might be something about Barney’s boyfriend running a prostitution ring out of their townhouse in DC. Hell, everyone knows about Barney’s statements concerning Freddie Mac and Fanny Mae.
Those are not the only videos showing Democrats blocking regulation of the GSEs. They were a playground of failed Democrat officials like Franklin Raines and Jamie Gorelick who was the Clinton official who insisted that CIA and FBI not share information prior to 9/11. She was well rewarded for her abilities, or lack thereof. She and Raines and Johnson, who was Obama’s VP search team head, all made millions in Fannie and Freddie.
This is another really good collection of the Democrats bashing the idea, for years, that the GSE’s needed more oversight.
http://www.youtube.com/watch?v=_MGT_cSi7Rs&feature=related
This just goes to show you that NO amount of discussing budgets could not get bogged down in politics. It is time to make sure ‘redistributed income’ gets reported via IRS form 1099-GOV for all levels of government.
Nuff said really.
There is lots of blame to throw around. Worst culprit was Wall Street for packaging loans bypassing Freddie and Fannie who at least had some standards for mortgages they acquired. This really took off in 2003 and 2004. So many suckers wanted to buy these mortgage backed “securities” that the originators were pressed to make more and more loans no matter what the quality. At that time these securities were yielding less than high grade industrial bonds. Just be thankful that we had Paulson for Treasury Secretary in 2008. His bold agressive moves halted what could have been a lot worse financial meltdown.
This is a video that Sean Bielat, who is running against Barney Frank in Massachusetts, should air repeatedly until November 2.
Why just Massachusetts? It should be run across the whole country, because at the very least, the GSE collapse affected that many people.
Being a congressman or senator is the best job in the world. You institute flawed policies that end up as a fiscal disaster, destroying wealth of the average citizen. Then you duck responsibility by blaming Bush and the big bankers. This current economic disaster is the direct work of the government, even unseen players like the soon to be governor of NY played a role. Cuomo, at Clinton’s HUD, gave grants to Acorn, who browbeat bankers into giving home loans to unqualified buyers. Ah, to be a congressman, Teflon is good.
Wow! Everyone is pretty quick to blame Barney and Friends yet are pretty ignorant of Bush’s actions. In short, Bush was involved in this up to his eyeballs. As long as we’re taknig a trip down memory lane, let’s see what Bush did to worsen this mess.
On February 16, 2001, just 3 weeks after his inauguration, Bush met with Vicente Fox to hammer out the Partnership for Prosperity Agreement (with Mexico) a.k.a. P4P, which was signed on September 6, 2001.
On October 26, 2001, Bush signed the USA PATRIOT Act of 2001. Contained in section 326(b) was the provision that allowed US banks to accept the Mexican Matricula Consular card as valid ID for opening a bank account. Congress questioned it, and Bush’s Treasury department defended it.
On June 17, 2002, Bush held a press conference. In this press conference he said that by 2010 he wanted to see 5.5 million new ‘minority’ home owners. He also called on Fannie Mae and Freddie Mac to increase commitments to the ‘minority’ market by $440 billion.
Here’s how Bush described the minorities he wanted to ‘help’: “Three-quarters of white America owns their homes. Less than 50 percent of African Americans are part of the homeownership in America. And less than 50 percent of the Hispanics who live here in this country own their home. And that has got to change for the good of the country. It just does.” In response to the mandate contained in the P4P agreement, the New Alliance Task Force was formed in May 2003.
The NATF is a broad-based coalition of 62 members, including the FDIC, Mexican Consulate, 34 banks, community-based organizations, federal bank regulatory agencies, government agencies, and representatives from the secondary market and private mortgage insurance (PMI) companies.
Their goal was to open the Mexican illegal alien market to US banks and visa-versa using low-cost remittances as the bait. As Bush’s 2002 speeches show he was talking about hundreds of billions of U.S. tax dollars going to directly benefit millions of Mexican illegal aliens.
In Bush’s June 17, 2002 speech, he also called for the creation of the American Dream Down Payment Fund. And, the 108th Congress (2003-2005) responded with the American Dream Downpayment Act. The act was authorized to appropriate up to $200 million per year of US taxpayer funds between FY2004 through FY2007 to go to Bush’s ‘minorities’. The sponsors of this bill were all Republicans.
And he pushed to allow first-time buyers to qualify for federally insured mortgages with no money down. Republican Congressional leaders and some housing advocates balked, arguing that homeowners with no stake in their investments would be more prone to walk away. Many economic experts, including some in the White House, now share that view. The president also leaned on mortgage brokers and lenders to devise their own innovations. “Corporate America,” he said, “has a responsibility to work to make America a compassionate place.”
“This administration made decisions that allowed the free market to operate as a barroom brawl instead of a prize fight,” said L. William Seidman, who advised Republican presidents and led the savings and loan bailout in the 1990s. “To make the market work well, you have to have a lot of rules.” But Mr. Bush populated the financial system’s alphabet soup of oversight agencies with people who, like him, wanted fewer rules, not more.
The president’s first chairman of the Securities and Exchange Commission promised a “kinder, gentler” agency. The second was pushed out amid industry complaints that he was too aggressive. Under its current leader, the agency failed to police the catastrophic decisions that toppled the investment bank Bear Stearns and contributed to the current crisis, according to a recent inspector general’s report.
As for Mr. Bush’s banking regulators, they once brandished a chain saw over a 9,000-page pile of regulations as they promised to ease burdens on the industry. When states tried to use consumer protection laws to crack down on predatory lending, the comptroller of the currency blocked the effort, asserting that states had no authority over national banks.
The president did push rules aimed at forcing lenders to more clearly explain loan terms. But the White House shelved them in 2004, after industry-friendly members of Congress threatened to block confirmation of his new housing secretary.
“In the 2004 election cycle, mortgage bankers and brokers poured nearly $847,000 into Mr. Bush’s re-election campaign, more than triple their contributions in 2000, according to the nonpartisan Center for Responsive Politics. The administration did not finalize the new rules until last month.”
Among the Republican Party’s top 10 donors in 2004 was Roland Arnall. He founded Ameriquest, then the nation’s largest lender in the subprime market, which focuses on less creditworthy borrowers. In July 2005, the company agreed to set aside $325 million to settle allegations in 30 states that it had preyed on borrowers with hidden fees and ballooning payments. It was an early signal that deceptive lending practices, which would later set off a wave of foreclosures, were widespread.
Brian Montgomery, the Federal Housing Administration commissioner, understood the significance. His agency insures home loans, traditionally for the same low-income minority borrowers Mr. Bush wanted to help. When he arrived in June 2005, he was shocked to find those customers had been lured away by the “fool’s gold” of subprime loans. The Ameriquest settlement, he said, reinforced his concern that the industry was exploiting borrowers.
In December 2005, Mr. Montgomery drafted a memo and brought it to the White House. “I don’t think this is what the president had in mind here,” he recalled telling Ryan Streeter, then the president’s chief housing policy analyst.
It was an opportunity to address the risky subprime lending practices head on. But that was never seriously discussed. More senior aides, like Karl Rove, Mr. Bush’s chief political strategist, were wary of overly regulating an industry that, Mr. Rove said in an interview, provided “a valuable service to people who could not otherwise get credit.” While he had some concerns about the industry’s practices, he said, “it did provide an opportunity for people, a lot of whom are still in their houses today.”
When the USA PATRIOT Act came up for renewal in 2004, some republicans wanted to remove the provision that allowed banks to accept Matricula Consular ID as the consular ID is unreliable and the bearer’s identidy all-but untraceable.
Barney Frank (D-MA) and some of his Republican and Democrat friends swung into action to protect it. In the final roll call vote, 49 Republicans supported the Oxley-Frank-Kolbe-Pastor-Hinojosa amendment and 16 Democrats opposed it. This legislative victory was a joint effort by financial institutions, immigrants’ rights groups, consumer groups, and many others who worked in coalition to defeat, once again, efforts to limit the acceptance of consular ID cards by banks, credit unions, thrifts, and other financial entities.
So, your position is that Barney supported Fan/Fred, but look over here, so did the evil Bush.
I agree. That was disastrous policy by Bush, and also by Frank. Bush is now out of office, and Frank should be also.
Defending Frank by saying that Bush did it also! Is that a defence or an accusation?
No, my position is that Bush was in bed with Barney, along with all the other corrupt politicians who foisted this mess off onto the backs of the American Taxpayer for generations to come.
The problem is that none of the policies Bush put into place have been removed. Until they are, we will continue sending hundreds of millions of US taxpayer dollars to Mexico under the auspices of the Partnership for Prosperity Agreement (with Mexico) and US banks are still free to accept the Mexican Matricula Consular card as valid ID to allow Mexican illegal aliens to open US bank accounts.
Since LBJ is no longer in office, shouldn’t we forgive the Tonkin Bay incident or the Great Society, too?
Wake up, man. Those who do not learn from history are doomed to repeat it. What you’re suggesting is that we forget what’s been done and continue on our merry way.
Dan – So what is your point?
Do you expect one party to do bad things and the other party to do good things?
You could start at the beginning of time and write for the rest of your life.
Who were the culprits that opened pandora’s box (deregulation)? Pubs wrote it Dems modified it in conference to gain passage and Clinton signed it. Who was guilty – all of them!! Worst offender = Gramm
People need to activate when Lindsey comes up for reelection and get him booted. Schumer and Dodd modified it. Schumer will be safe for another 6 years.
While you proceed to provide with some important details missing. The 2003 Freddie scandal set off alarm bells. I see no mention of the proposal the Bush administration presented. Barney as the ranking member was opposed.
Do you have a dog in this fight? Are you defending Barney? I don’t see mention of the bill that Barney introduced with Oxley – the one that he vetoed after he couldn’t have his way with the “goodies” he put in it. It wasn’t a big deal since it was only going to open the lending faucet full bore. Why some history without notes of the history that is missing?
It all stinks and Barney is part and parcel of the whole pack of them!!
I don’t take comfort knowing that Barney is in favor of socialism – that is a big black mark in my book. I like the “Republic” form of government.
No, my point is that all the ills facing this country are a result of the actions of both Republicans and Democrats and they were allowed to do this because partisan hacks give ‘their bastard’ a pass simply because of the letter trailing their name.
Both parties have done bad things and that’s why the country is in the state it is in.
You mention that Bush tried to fix this in 2003 with his ‘proposal’. What did he ‘propose’ doing? Give me a name of the proposal or a link where I can read about it.
I don’t have a dog in the partisan bickering. I’m an American first and foremost and my only interest is in the country that your party is going to create for my children to grow up in.
Yes, Barney is a part. But, so is Bush. Just what do you think “Compassionate Conservatism” is about, anyway?
I’ve always assumed that the whole idea of government manipulating the private mortgage markets was bad and allowed to keep going by both Democrats and Republicans, but that doesn’t excuse the efforts to block needed reforms. When Obama tries to blame this all on Bush with his lame “car in the ditch” trope, he’s lying.
flataffect – here is the time line – it took some digging to get the facts. I agree, Obama and the whole pack of them are lying through their teeth.
April 2001 – Bush admin reported in their 2002 budget request that the “size of GSE’s is a potential problem, trouble in either one could cause strong repercussions in financial markets”
April 2003 – Bush Admin upgraded risk to “Systemic Risk that will extend beyond housing”
Fall 2003 – Snow testifies before Congress and stated that action must be taken to create an agency to regulate and supervise GSE’s.
As the ranking member of Financial Services Barney stated that there is no crisis and he believed Fannie and Freddie need to do more. The bill was blocked.
Feb 2005 – Greenspan testifies before Congress and states enabling GSE’s to grow in size will “be placing the total financial system of the future at risk”. The senate at this point recognized their was a problem but the parties couldn’t reach a consensus on a bill so no action was taken)
April 2005 – Greenspan testifies before congress and states that “if we fail to strengthen GSE regulation we increase the possibility of insolvency and crisis”.
Shumer and Frank were satisfied with the condition of the GSE’s. No regulations were passed and business continued on at a disastrous pace.
In September 2007 Barney requested that GSE;s purchase sub prime mortgages and raise the lending limits.
In July 2008 Barney stated that going forward everything looked very promising.
The financial markets locked up the following month.
The current GSE’s guarantees are approximately 11 trillion