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The Chairman of the Senate Banking Committee, Chris Dodd (D-CT), has NO idea how the mortgage crisis happened. I repeat, he is the CHAIRMAN OF THE SENATE BANKING COMMITTEE !!! Dodd says, "American taxpayers are angry and they demand to know how we arrived at this moment."
Well, Mr. Dodd, as CHAIRMAN OF THE SENATE BANKING COMMITTEE, you know damned well how the mortgage crisis happened, and the truth is slowly coming out. The mortgage crisis was created by Democrats like Chris Dodd, who repeatedly blocked regulation. Even former Democratic president Bill Clinton knows that, though I'm surprised he is admitting it. I'm always shocked when a Democrat tells the truth. It's a rare occurence. Most Dems are stonewalling for all they are worth. Here's President Clinton being interviewed on ABC:
CHRIS CUOMO, ABC NEWS: A little surprising for you to hear the Democrats saying, "This came out of nowhere, this is all about the Republicans. We had nothing to do with this." Nancy Pelosi saying it. She signed the '99 Gramm Bill. She knew what was going on with the SEC. They're all sophisticated people. Is that playing politics in this situation?
BILL CLINTON: Well, maybe everybody does that a little bit [lie, he means. Yes, the Dems certainly do that. Constantly]. I think the responsibility the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.
Gosh, that sure doesn't square with the contention by Democrats and the pro-Obama mainstream media, who are so certain that it was those Bush deregulation policies of the last 8 years that caused the problem (a curious hypothesis, since the Bush administration didn't propose any deregulation of the financial industry during the last 8 years. The GOP only proposed REGULATION of the financial industry, and the Dems shot it down, every time).
The following exchange on Fox News sums up nicely how the mortgage crisis happened.
JIM ANGLE, CHIEF WASHINGTON CORRESPONDENT: Fannie Mae and Freddie Mac, backed by the federal government, buy mortgage loans from the lenders who make them. But four years ago, both were in trouble over shoddy accounting. Fannie Mae Chief Franklin Raines, President Clinton's former budget director, was fired. To placate those in Congress who watched over them, Fannie and Freddie promised to do more to help poor people get mortgages. That led them to buy riskier and riskier home loans from private lenders creating incentives for everyone to make shakier loans.
PETER WALLISON, AMERICAN ENTERPRISE INSTITUTE: The problem is that they encouraged very bad mortgages to be made by banks and other institutions, because Fannie and Freddie would buy them.
ANGLE: Eventually, they bought trillions of dollars worth of mortgages, a substantial portion of them based on poor credit, then resold many of them to financial institutions who thought they were safe because the federal government was behind them.
PETER WALLISON, AMERICAN ENTERPRISE INSTITUTE: As a result of this appearance that they were backed by the government, people never paid very much attention to the assets they were acquiring or the risks they were taking.
ANGLE: And so shaky mortgages spread throughout the system. But in 2005, the Senate Banking Committee, then chaired by Republican Richard Shelby, tried to rein in the two organizations bypassing some strong new regulations.
WALLISON: Which would have prevented Fannie and Freddie from acquiring this bad -- these bad mortgages. It actually gave a new regulator for Fannie and Freddie the kinds of powers that a bank regulator had.
ANGLE: All the Republicans voted for it. All the Democrats, including the current chairman, Senator Chris Dodd, voted against it, and that was after Fed Chairman Alan Greenspan had issued a stark warning to senators that Fannie and Freddie were playing with fire. Greenspan said without stronger regulations, "We increase the possibility of insolvency and crisis. Without restrictions on the size of Fannie Mae and Freddie Mac, we put at risk our ability to preserve safe and sound financial markets in the United States."
Guess how Democrats responded to the "strong new regulations" of Fannie Mae and Freddie Mac that Senator Shelby and other Republicans proposed ? They claimed everything over at Fannie and Freddie was just fine and dandy, they attacked the regulators, and they called Republicans racists for proposing the regulation, like they always do with any GOP legislation they don't like. Political correctness over sound policy, that's the Dem mantra. In the interests of fairness, some House Republicans also opposed the regulations, though the vast majority were for it. Virtually ALL Democrats opposed it, and that's why the regulations died.
When Barney Frank (D-MA) became the incoming Chairman of the House Financial Services Committee after the Dems won Congress in 2006, he said this at the National Press Club on December 11, 2006:
Now let me turn to housing — we have more to do yet in the deregulation. I’m just saying that one of the things that we did was to try and reduce the reporting requirement from the banks to the financial detectives. And far too much has to be reported now, in my judgment, of a routine nature. And the metaphor that I use is that we have told the law enforcement people to find a bunch of needles, and then we have set about building them a very big haystack. And we ought to thin that down so they can do a better job. One of the things that I want to stress to my liberal friends is that excessive regulation or ineffective regulation is bad for regulation. Regulation is very important. The market does need some corrections, but if you overdo it, then you weaken your case.
Yet, the Dems claim Bush was the deregulator of the mortgage industry. NOT. Barney Frank was against every attempt by Republicans to regulate Fannie Mae and Freddie Mac, as was Chris Dodd, as was Nancy Pelosi (D-CA) over in the House, as were virtually all Democrats. Remember this when the lying scumbags try to blame this all on the Republicans. The Democrats protected Fannie Mae and Freddie Mac at every turn, and now we are all left holding that big bag of crap.
And guess who received the second most campaign contributions from Fannie and Freddie ? Mister Hope and Change himself, Barack Obama. Number one is Chris Dodd. They say if you want to know the truth about something, follow the money. Yes, indeed. That's all you have to do here.
Here's another interesting quote from Barney Frank, made in 2003 during Senate hearings about regulations of Fannie and Freddie that the Bush administration was calling for:
Some of the critics of Fannie Mae and Freddie Mac say that the problem is is the federal government is obligated to bail-out people who might lose money in connection with them. I do not believe that we have any such obligation. And as we said that it’s a self-fulfilling prophecy based on people. So let me make it clear: I’m a strong supporter of the role that Fannie Mae and Freddie Mac play in housing. But nobody who invested in them should come looking to me for a nickel, nor anybody else in the federal government.
Think of this when you hear Mr. Fwank making jokes about how the GOP killed the bailout deal the other day, and about how Fwank says the GOP put their hurt feelings above the good of the country. Fwank is full of it. He wouldn't tell the truth now to save his life, but he sure as heck will lie to save his job. Read many of Barney Fwank's statements about Fannie-Freddie here. It's enlightening.