Did the Community Reinvestment Act do what I claim?
Did Barney Franks obstruct efforts to address the crisis earlier?
Kevin Hassett is senior fellow at the think tank American Enterprise Ins ute where he directs economic policy studies. He regularly appears on Bloomberg Television. He advised President Bush in his campaign, and he currently serves as a senior economic adviser to the John McCain 2008 presidential campaign.
Can you get a non-partisan hack source?
Really? Even though Republicans controlled both the Executive and Legislative branches for years? History is not on your side.
A brief history of the Fannie Mae and Freddie Mac mess is in order. Back in the days when a Bank or Savings and Loan approved a home loan, they did so with lending standards that had historically led to only safe loans. They had to because they kept the loan and were responsible if it failed. These standards included 3 major parts.
First, the mortgage payments could be no greater that a set percentage of your income, usually about 40 percent.
Second, a down payment was required of about 10 percent or above so the new owner would immediately have some equity in the home.
Third, A good credit rating was required to prove you had a history of paying your bills.
Some adjustments could be made, for example people that had poor credit could get a loan with a larger down payment so if the loan failed, the bank could still resell the house and cover the loan.
With the well intentioned goal of increasing the level of home ownership in lower income and minority groups, Lenders were encouraged to make home loans that did not meet normal standards with the promise that Freddie Mae and Freddie Mac would buy these loans and the lenders were not responsible if they failed.
The Fannie Mae and Freddie Mac crisis has its roots in the Community Redevelopment Act signed into law during the Carter Administration. President Clinton, influenced by multiculturalism, encouraged it further by dictating where mortgage lenders could lend. Tough new regulations required that lenders increase their lending in high-risk areas where they had no choice but to lower lending standards to make loans that sound business practices had previously rejected. And again, Freddie Mae and Freddie Mac bought these loans, which means taxpayers were ultimately responsible if these loans failed.
As long as home values rise, failed loans could be covered by selling the house. If however, home values fell as they did during and after the 1973 Arab oil embargo when energy prices doubled, just as they have today, these failed loans caused a huge financial impact on Lenders and Freddie Mae and Freddie Mac. The huge increases in energy costs are an indisputable part of this financial crisis.
In 2003 the huge level of risk that Fannie Mae and Freddie Mac had come to represent for both taxpayers and financial ins utions was becoming apparent. The Bush Administration attempted to reign in the problem by raising standards for loans that Freddie Mae and Freddie Mac guaranteed. Congressional Democrats blocked this reform so that minorities and low-income groups could continue to buy homes that by most standards they could not really afford.
From the New York Times September 11, 2003
John McCain saw the huge Freddie Mae and Freddie Mac train wreck coming in 2005 and lead a reform effort to again raise lending standards and protect taxpayers from what could become catastrophic costs from failed loans.
These efforts were blocked by Congressional Democrats. Obama never lifted a finger to help any Freddie Mae and Freddie Mac reform effort. Perhaps that’s why Obama received $105,849, Nancy Pelosi $47,000 and Harry Reid $60,500 from Freddie Mae and Freddie Mac lobbyists and John McCain got none.From the Congressional Record:
FEDERAL HOUSING ENTERPRISE REGULATOR REFORM
ACT OF 2005The United States Senate, May 25, 2006
Sen. John McCain [R-AZ]: Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
For Years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac — known as Government-sponsored en ies or GSEs— and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
In a truly amazing insult to our intelligence (but, obviously not yours), Obama campaigns daily on the premise that Bush and McCain are responsible for this mess! If Obama wanted to truly be a bipartisan leader he would distance himself from Nancy Pelosi and Harry Reid who closed down Congress to go on vacation rather than allow any votes on the energy crises, and Barney Frank who fought Freddie Mae and Freddie Mac reform.
History isn't on anyone's side...it is what it is.
Financial Crisis: Beware Of The Phrase "Both Sides Are To Blame"
by Sher Zieve
Sep 23, 2008
Anytime we hear the members of the press say or write "both sides [Democrat and Republican] are to blame", we can be certain of one thing-the Democrats have been caught red-handed with both of those hands in the cookie jar. So, in order to protect their own and lessen the scrutiny on the Democrat perpetrators, the mainstream media has to blame both sides. And as the media is diligently working 24/7 in order to get their candidate Obama elected, this is precisely the tactic that they are employing. Even Fox News is now broadcasting the "both sides are to blame" mantra. Even if not true, I guess that's the "fair and balanced" way!
I have been one of those in the forefront of bringing up Republican lunacies and debacles when accurate and appropriate. But, with the possible few minor exceptions, the current financial fiasco can be planted firmly at the feet of Democrats. Sen. Chuck Schumer (D-NY) and Rep. Barney Frank (D-MA) ensured there was limited oversight and scrutiny of both Fannie Mae and Freddie MAC. After the Freddie MAC accounting scandal was brought to light (a year before another accounting calamity was uncovered with Fannie Mae), the Union Leader reports that Frank stated: "I do not think we are facing any kind of a crisis." Until the Democrats' Fannie Mae and Freddie MAC house of cards recently came crashing down, taking the rest of us with it, Frank remained instrumental in blocking all Republican attempts at reforming the agencies. The Leader also reports "The Wall Street Journal has pointed out, Frank "pressured regulators to ease up on their capital requirements -- which now means taxpayers will have to make up that capital shortfall."
Prominent Democrats, including former head of Fannie Mae Franklin Raines and former Vice Chair of Fannie Mae Jamie Gorelick, made fortunes-said to have acquired over $100M each-by working for and ostensibly raiding one of the Democrats' personal slush fund; AKA Fannie Mae. As a side note, despite Obama's rage after the New Media brought it up, Franklin Raines has been tied to Obama as one of his "advisors." Perhaps he's "advising" Obama on how to further scam the system?
Another Democrat and former CEO of Fannie Mae who made millions-Jim Johnson-is yet another advisor to Candidate Obama! Obama asked Johnson to begin a search for his VP running mate.
So, as the leftist mainstream media and Obama adherents continue to redirect the blame from this possibly-the-biggest-Democrat-scandal-and-debacle-in-history (that has placed the US and the world into financial crisis) onto others, just remember where it started and who kept it going. Also remember who is expected to bail the Democrats out again-We the people, of course!
http://www.postchronicle.com/comment...12174172.shtml
Sher Zieve is an author, political commentator, Staff Writer and Program Director for The New Media Alliance (www.thenma.org). Zieve firmly believes that if Leftists ran the country (and left to their own inane devices), it would be the end of the United States as a sovereign nation.
I'm glad the FBI is investigating the true criminals of this affair. Both Democrats and Republicans are their enablers. I will take any GOP hacks seriously if they bring up the 2007 bill passed by the House and killed by the Senate GOP, but somehow time stopped in 2005.
Finally we're getting somewhere...
Both parties ed up, and they're both just as responsible for this bull that our kids and grandkids are going to have to pay one of these days.
Did she misquote the WSJ?
That better! Well did she?
Last edited by Biernutz; 09-23-2008 at 10:04 PM. Reason: add a "s"
Actually, it's a she: Sherrie Zieve
it's about time. i don't care if they're democrats or republicans. single out their ass and let 'em hang. i'm anxious to see who get's fleeced.
Yep, funny how these people recieved the largest shares of contributions.
Yes, it's not like Franklin Raines ($90 million, Fannie Mae - Obama financial advisor), Jamie Gorelick ($25 million, Fannie - Obama financial advisor), and James Johnson ($21 million, Freddie, - Obama advisor and vetted Obama's VP candidates before advancing Biden for the pick) are involved in the Obama campaign in any way.
Dumbass.
Davis was not at Freddy Mac. He was a consultant, or something else of an outside business nature. This would have limited his knowledge of the happenings in Freddy Mac. A person can only ASSume what he knew. Like I pointed out in the other thread, he did not get paid since 2005 or 2006. That $15K was to the company that he currently has distanced himself from.
Read the story again. If does not say Davis received the $15K! They negotiated that for the company before he left. The story simply supports your confirmation bias. Please start using critical thinking.
Last edited by Wild Cobra; 09-24-2008 at 01:37 PM.
smoke screen. make us believe these guys won't get off scott free................and approve the 700 billion........americans are so gullable.
Ancient History, Apparently.
2003, that is, when the New York Times ran this article on proposed reforms to Fannie Mae and Freddy Mac:
Maybe it's too much to expect anyone to remember the distant past--2003--but still, it seems remarkable that Barney Frank can make the rounds of the television talk shows, pontificating on the current crisis, without being reminded of his own role. Oh wait...that's right, he's a Democrat.
Not true. Did you actually read the article?
From 2000 to the end of 2005, Mr. Davis had received nearly $2 million as president of the coalition, the Homeownership Alliance, which the companies created to help them oppose new regulations and protect their status as federally chartered companies with implicit government backing.
and then
One of the giant mortgage companies at the heart of the credit crisis paid $15,000 a month from the end of 2005 through last month to a firm owned by Senator John McCain’s campaign manager, according to two people with direct knowledge of the arrangement.
He owns the company getting the check. He gets a check from that company. I think the only conclusion I can gather is that you regressed terribly in reading comprehension.
Yes, I didn't say otherwise. He does in fact own the firm. I never said otherwise. However, that money doesn't automatically become a payment to him like implied.
Yes, he owns the firm, but he doesn't get the money. That is a part completely left out. He is currently getting no money from the firm, that is how far he distanced himself in the interest of avoiding a conflict of interest. Other people are running it in a manner he has no say in.
If you have information to show me in error, I would like to se it. However, nothing you say here makes my statements in error otherwise. To think I am wrong is to jump to conclusions not stated as fact.
Even if he refused to receive compensation from the company (which is unknown at this time), it's still his company. Every time the company earns a profit, the company value obviously grows, and so does the value of his stake on the company.
This is a fact and very basic economics.
If he wanted to avoid a conflict of interest, he would have sold his stake on this company or severed the relations between his company and Freddie.
Now you are into a matter of opinion that others don't share. Thing is, he has no legal say in the company right now. He could wake up one day and the people running his company could bankrupt it. They could make a big profit. Either way, he is not in charge.
By the way. Retainers are common in he corporate world.
Please, you are a lot smarter than this. I know that much.
That he has any say in the company right now does not matter in the slightest.
Answer me this: Does he pays taxes on that Company, being that he's part owner, and even though he has no 'legal say'?
Don't be silly. A retainer is a work for hire contract. He's not contracting for the company. He OWNS part of the company.
OK, now we are getting into an area I have to make some guesses in. Here's my best shot;
No. He does not pay taxes on it, except for stock dividends, but that is also dependant on how he managed them. As an owner, it will be in shares of stocks. They may or may not pay dividend income, and then that may or may not be rolled into more stocks. As long as the stocks are not sold, there is no income.
All stockholders are part owners of a corporation, and there are more than one class of stocks. I don't know the breakdown in this case, nor do I care. The facts as I do know them are simple, legal, and there is no conflict. Again, if I am in error, I need to see factual data. Not unsubstantiated allegations. So far, I have seen nothing to show John McCain's statement on the matter in error. Only unsubstantiated allegations.
Where's the beef?
The retainer is between his company and (what was it?) Freddy Mac, right? Not between him and his company. His company received the $15,000 payments. Not him. Now I'm not sure why this retainer would be in place, but my guess is that it will keep his company legally bound to Feddy so that they cannot consult for a company that would be in conflict with Feddy. Just that simple. Just that simple, or some other simple reason.
Rather than make me guess, lord knows, I don't have the time to find the truth. Why can't you accept the 'innocent till proven guilty' concept unless you are going to find some real evidence? Since a reasonable explanation exists that there is no wrongdoing here, I leave it to you to show wrongdoing past unsubstantiated allegations.
I dare you. Show me I'm wrong. You've done so before.
This is not a corporation or a publicly traded company.
This is a lobbying firm. Not stocks, bonds, etc.
He owns a percentage of the firm, period.
Do you own a company? When taxes time comes around, you have to pay based on the company income. When you pay those taxes, is it your money or not?
And I'm not arguing about McCain's statement. I never did.
My outrage is that all these guys (both Reps and Dems mentioned in this thread and others) are caught with their hands on the Freddie and Fanny cookie jar, after spending years fighting for them not to be regulated, all the while these two monsters keep piling up the ty debt that got us into this mess. The original argument in this thread was that only Dems had Fannie/Freddie guys in their campaigns. Not true.
Then why not show the agreement? I mean, if it's really that innocent of an issue, just show the retainer agreement and this would be a non-issue.
Because they're politicians and lobbyists. I'm sure you learned your lesson by now. This is not a matter of legal wrongdoing. This is about conflict of interests. This is a guy who's in a political campaign championing how they're going to end the politics of excessive lobbying.
While y'all parse the facts over whether or not Davis has anything at all to do with Fannie Mae or Freddie Mac or whomever...
Democrat Barack Obama still gets advice from former Fannie Mae chairman Jim Johnson.
Oh sure, Johnson was kicked under the bus after the press disclosed that Johnson received loans directly from the CEO of Countrywide Financial.
Without Johnson heading that VP search committee, Obama selected the Dan Quayle of Delaware to be his running mate. (See what I did there? See what I did?)
But Ben Smith of Politico reported Johnson never really went away. He’s been advising Obama all along.
And the New York Times thinks it is bad because the firm of Republican John McCain’s campaign manager represents Fannie Mae?
Here is the architect of the self-destruction of Fannie Mae constructing the Obama presidency.
Speaking of Dan Quayle: "The media theme is Palin is unprepared and has zero knowledge of foreign affairs while Biden has decades of experience. So why does Biden sound like a complete idiot? . . . Dan Quayle is still a punchline 20 years later. Joe Biden gets a free pass."
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