Off the top of my head observations:
Golden parachutes: we may detest them, but they are not the cause of the problem. And every one of the Democrats involved in this bailout benefited from Fannie Mae and Freddie Mac, and every one of them was in favor of the CRA provisions requiring more and more sub-prime loans in order to increase home ownership.
And listening to Pelosi and Reid's press conference, I am guessing that their provisions for helping keep people in their homes probably means that those who should not have been buying houses in the first place will be protected in one way or another. People who made horrible decisions and bought houses without down payment and interest only loans will be bailed out by those who put up a down payment and took out a normal 30 year amortization loan and have made their payments all along. Perhaps this is a good thing. Ownership promotes a certain independence. But I suspect that things will be gimmicked so that in order to keep the house you should never been able to buy, you will have to continue to support the Democrats. But then I have a nasty suspicions mind.
On protecting Wall Street:
Of course when government forces banks to make bad loans, is there then a moral obligation from all of us to make the banks whole again? They were only doing what we told them they must do. I know, I know, we the people didn't vote to force the banks to make bad loans; but our government did, and the Congress did, and we continued to elect those who did that, and we are now to cheer them as heroes for rescuing us from the financial collapse. Barney Frank, Chris Dodd, Pelosi, Reid -- they were all for regulations requiring more sub-prime loans. Banks that didn't comply were in a world of hurt.
Biden is asking where McCain was! Well, Biden, McCain was in 2003 trying to curb Fannie Mae and Freddie Mac and cut back the pressure from the CRA, that's where he was. Where were you? And where was Obama?
In their own words HERE...
This video is of a hearing held by Congress to take testimony from Armando Falcon, head of the Office of Federal Housing Enterprise Oversight (OFEO).
In this video you will see Democrats fighting tooth and nail to keep Fannie and Freddie from being reformed before these government-sponsored entities blew up, the fallout from which is now threatening the world's financial structure. Here is the video of the hearings in which Democrats tell us "nothing is wrong," everything is great, there are no problems. They use the hearings as an opportunity to beat up on the would-be regulators, accuse them of wanting to lynch Franklin Raines, and tell us that Fannie and Freddie are operating exactly as they want them to act.
We see Maxine Waters (DEMOCRAT) accuse the regulators of “…trying to fix something that wasn’t broke;” and stating that “under the outstanding leadership of Mr. Frank Raines everything under the 1995 act has worked just fine.” She also praised “desktop underwriting and 100% loans.”
We see Gregory Meeks (DEMOCRAT) tell OFEO’s Falcon “I’m pissed off at OFEO” and “Nothing that’s indicated that’s wrong with Freddie Mac.” He’s attacking the regulators for raising questions about Freddie’s business practices; practices that led to catastrophe just four years later.
We see Arthur Davis (DEMOCRAT) say “…that sounds like some kind of invisible line has been crossed” when regulators dared to raise concerns about Fannie and Freddie.
We see Lacy Clay (DEMOCRAT) claim that “This hearing is about the political lynching of Franklin Raines.”
We see Barney Frank (DEMOCRAT) defending Fannie and Freddie’s accounting practices stating that “I don’t see anything in your report that raises safety and soundness problems.” Frank goes on: “It serves us badly to raise safety and soundness as a general shibboleth when it does not seem to be an issue.
And then we have the testimony of Franklin Raines, CEO of Fannie Mae testifying that the real estate backed assets (mortgages) he holds are “so riskless” that he should be able to leverage his assets 50 to 1. At the time he was borrowing $30 for every $1 of capital. That means that if real estate declined just 3% Fannie Mae is wiped out. That is exactly what happened – and worse - and we are left holding the bag.
Meanwhile Franklin Raines has collected $100 million and is advising Barack Obama.
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