Duplicitous Democrats Deceitful

Don’t believe the Dems when they blame the Republicans for the defeated bail-out plan. Dems don’t care about the country or about you. They only care about one thing.

That is Barack Hussien Obama’s election. They have a majority in the House and could easily pass any legislation they wanted. Pelosi’s crazy speech sealed the defeat. She is so weak and ineffective that 90 people from her own party deserted her. Her approval rating is lower than George Bush’s. Nice work if you can get it.

Democrats will do anything to win the White House. Meanwhile, they do nothing to deal with the fallout from their own mismanagement of the whole housing mess. Democrats forced the banks to loan to people who could not possibly pay them back. Remember that one fact, if nothing else. Democrats.

They should be ashamed, but they needed two vacation days to relax and avoid any scrutiny. I, then, will be ashamed for them.

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  • Anonymous

    The rotten egg that is the CRA was laid by Carter, hatched by Clinton, and nurtured by congressional dems, but Nancy felt she needed to scold the GOP and castigate Bush. She claims no dem responsibility whatsoever.

    http://www.youtube.com/watch?v=cMnSp4qEXNM

    Obama is also deperately trying to distance himself, calling for more “oversight”. This is all the more interesting as his chief economic advisors are two CEOs and a CFO from Fannie May, all under investigation for fraud. One of the CEOs, Jim Johnson, was even appointed by Obama to select his VP:

    Franklin Raines was a Chairman and Chief Executive Officer at Fannie Mae. Raines was forced to retire from his position with Fannie Mae when auditing discovered severe irregulaties in Fannie Mae’s accounting activities. At the time of his departure The Wall Street Journal noted, ” Raines, who long defended the company’s accounting despite mounting evidence that it wasn’t proper, issued a statement late Tuesday conceding that “mistakes were made” and saying he would assume responsibility as he had earlier promised. News reports indicate the company was under growing pressure from regulators to shake up its management in the wake of findings that the company’s books ran afoul of generally accepted accounting principles for four years.” Fannie Mae had to reduce its surplus by $9 billion.

    Raines left with a “golden parachute valued at $240 Million in benefits. The Government filed suit against Raines when the depth of the accounting scandal became clear. http://housingdoom.com/2006/12/18/fannie-charges/ . The Government noted, “The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner.” These charges were made in 2006. The Court ordered Raines to return $50 Million Dollars he received in bonuses based on the miss-stated Fannie Mae profits.

    Tim Howard – Was the Chief Financial Officer of Fannie Mae. Howard “was a strong internal proponent of using accounting strategies that would ensure a “stable pattern of earnings” at Fannie. In everyday English – he was cooking the books. The Government Investigation determined that, “Chief Financial Officer, Tim Howard, failed to provide adequate oversight to key control and reporting functions within Fannie Mae,”
    On June 16, 2006, Rep. Richard Baker, R-La., asked the Justice Department to investigate his allegations that two former Fannie Mae executives lied to Congress in October 2004 when they denied manipulating the mortgage-finance giant’s income statement to achieve management pay bonuses. Investigations by federal regulators and the company’s board of directors since concluded that management did manipulate 1998 earnings to trigger bonuses. Raines and Howard resigned under pressure in late 2004.
    Howard’s Golden Parachute was estimated at $20 Million.

    Jim Johnson – A former executive at Lehman Brothers and who was later forced from his position as Fannie Mae CEO. A look at the Office of Federal Housing Enterprise Oversight’s May 2006 report on mismanagement and corruption inside Fannie Mae, and you’ll see some interesting things about Johnson. Investigators found that Fannie Mae had hidden a substantial amount of Johnson’s 1998 compensation from the public, reporting that it was between $6 million and $7 million when it fact it was $21 million.” Johnson is currently under investigation for taking illegal loans from Countrywide while serving as CEO of Fannie Mae.
    Johnson’s Golden Parachute was estimated at $28 Million.

    WHERE ARE THEY NOW?
    FRANKLIN RAINES? Raines works for the Obama Campaign as Chief Economic Advisor
    TIM HOWARD? Howard is also a Chief Economic Advisor to Obama
    JIM JOHNSON? Johnson hired as a Senior Obama Finance Advisor and was selected to run Obama’s Vice Presidential Search Committee

    It gets better.

    As recently as two months ago, Obama made much of his legal experience in Chicago as he sought to boost his resume. What cause was Obama pursuing?

    He was a lawyer in a class-action suit against Citicorp which forced them to accept ever more marginal mortgage applications under the CRA.
    http://sweetness-light.com/archive/obama-fought-mortgage-red-lining

    The linked original Sun-Times article is worth reading. Very interesting, what a “community organizer” does. Motor-Voter, Tony Rezko…

    • Steve Plunk

      Wow! I sure wish I knew who you were anonymous. Anyone who can write something that good needs recognition. You summarized the entire mess accurately and quickly. Keep it up. The Dems must be exposed for the damage they have done to this country before they do more damage.

      • Nichole

        Are you KIDDING me?!

        This country is in the toilet because of BUSH and MCCAIN’s failed policies and duplicity– not the democrats.

        I’m sure the only reason you’re against “Barack Hussein Obama” is because you are uncomfortable with his level of MELANIN.

        The $700b bailout is meant to keep the rich RICH, while castigating the working people who allowed their desire to OWN HOMES affect their judgement. The professional bankers should be held accountable for their predatory lending practices.

        McBush must be kept OUT of the white house if there’s any hope for this country.

        • Steve Plunk

          Strong words Nichole. Accusing me of being a racist without any evidence is typical liberal nonsense. Those of us here who are more civil would avoid such accusations without something to back them up lest we be forever shamed.

          Your other accusations against President Bush and others are as well without foundation. If you would like to throw in some facts or evidence please do.

          As for my opposition to Senator Obama, that would all rest on his liberal policies. I see his quasi-socialist agenda as bad for the country.

          Now Nichole, you see how that’s done in a rational, reasonable, and civil tone? Give it a try.

          • Nichole

            The media has repeatedly tried to associate Obama with known terrorists (Osama and Saddam) due to his name. Of course this is CRAZY, which is why it amazes me that so many americans believe that Obama is either Moslem or that he has terrorists ties. When you wrote his full name, I got the impression that you were attempting to give the same impression. If I am wrong, you have my sincere apology, Steve.

            I’ll agree to disagree with you on the foundation of our current crisis, however.

        • Chris McMullen

          Nicole, please provide some proof and cite some sources for your outlandish claims.

          There is ample proof of Barney Frank, Chris Dodd and Barry O knee-deep in promoting Fannie Mae, Freddie Mac and ACORN — all of which are culpable in causing this crisis. There’s also ample proof of McCain and Bush pleading with congress to pass more regulation that would have reigned these entities in.

          The only thing Republicans can be accused of is not pushing hard enough for reforms. Pelosi, Reid and all congressional Dems didn’t lift a finger to divert this meltdown.

        • sybella

          His level of melatonin has nothing to do with anything except in his and your minds. It’s his policies that are wrong, it’s the shady side of those around him.

          Trust me that 700 billion, which I hope does not go through will help you, because if the rich go down, there will be nothing for you. Grow up and learn.

          • Nichole

            I don’t want the RICH to fall, Sybella– not at all. But if MY tax money will be the difference between them having $500m in their accounts rather than $400m, I’m not interested.

            And please take your heads out of the clouds… Racism is at an all-time high in this country among caucasians under 30.

            There’s a book you should read: The Lies My Teacher Told Me by Loewen. Very enlightening.

    • Nichole

      Goodness… are you naive, or just clueless?

      http://www.nytimes.com/2007/11/04/weekinreview/04bajaj.html?pagewanted=print

      Funny how subprime mortgages were given to so many minorities when whites with similar financial profiles were offered better loans. But I guess that’s not the fault of the lenders, right?

  • snow

    Listening to Fox News this morning, one of Obama’s campaign people was being interviewed. He was asked about McCain trying to get the house to do something about Fannie and Freddie and the dems told him not on your life. There was a video with Barney Frank saying so. The comback from the Obama camp said that didn’t matter because before that McCain was against regulation before that.

    I don’t know why that bothered me so, but it seems like the democrats call the republicans wrong unless they are 100% right.

    Yes, I know the road goes both ways, but it’s realy grating on me. Although I’m not impressed with some (1) of the Republican candidates, the attitude of the democrats with their “holier than thou” attitude have caused me to decide to vote a straight Republican ticket, just to vote against them. Yes, I know the arguments and it’s unfortunate I feel that way because there are honestly a few good democrats out there and they won’t get my vote.

    • John in Oregon

      > *I don’t know why that bothered me so, but it seems like the democrats call the republicans wrong unless they are 100% right.*

      Snow, I agree with you completely.

      Although I go a step further. The Democrats call the Republicans wrong even when they are 100% right. And they do so in the face of obvious contrary facts.

      The last step is the Legacy Media aids and abets the Democrats at every step.

    • Nichole

      Here’s a tip, Snow: Try CNN or BBC. Fox stopped reporting objectively over 8 years ago.

      I have a question, though: Have you watched both the democratic and republican conventions? During the democratic convention, actual ISSUES were discussed. The republican convention was a witch hunt. Their speeches were condescending and arrogant and just nasty, while absolutely NO issues were bought to the table. I mean, in the past 7 years, what positive results could they claim? The US dollar is at it’s weakest, China are now our bankers, so of course we’re in THEIR pocket, unemployment and foreclosures are at record highs… but you want to vote republican across the board?

      ARE you in the top 10% of the wealthiest in the country? Yes? I understand, then. You can keep YOUR children from dying in Iraq, and you’re one of the few benefiting from Bush’s tax breaks.

      FYI– the House would have passed the $700b bailout plan, I’m sure, if it encompassed aid to those who have lost their homes. They’re worried about their constituents with the impending election, and although Oregon is a red(neck) state that will likely be awarded to McCain, people from other states who are actually concerned about the country and not race will vote for the most suitable candidate.

      • snow

        sorry, I’m in the upper low income.

        • Nichole

          And yet, you would vote for someone whose policies are not in your best interests?

          Okay, Snow. I don’t understand your logic, but okay.

          • snow

            It’s because I treasure my freedom.

          • Nichole

            Our “freedom” as Americans has never been more limited since the Bush era.

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  • John in Oregon

    A very key number is that 40% of Democrats voted against the bailout.

    Obama said he was *on top* of the problem, *in constant touch* by phone and *ready to act* when needed. If the Democrats goal is to solve the problem, and this bailout bill which they negotiated is the solution, then they failed. And, *Obama’s leadership utterly failed as well.* The last thing I expect if for the Legacy Media to admit that point.

    John Hinderaker has some appropriate thoughts. He asks “Was the Bailout Vote a Partisan Set-Up?” He continues;

    “Nancy Pelosi must be the most ineffective House Speaker of modern times. The Democrats have achieved virtually nothing since taking control of the House and Senate… Which may explain why, until very recently, most Americans were unaware that the Democrats were actually in control of Congress.”

    “Pelosi’s ineffectiveness has been due, in part, to her unrelenting and strident partisanship, which brings us to today’s vote on the bailout bill: suspicion is growing that Pelosi and the *Democrats made no serious effort to pass the bill,* and that it failed at least in part because Pelosi tried to misuse it for political advantage. ”

    “Everyone has heard about the weirdly partisan and inaccurate rant which Pelosi contributed to the debate on the bailout bill. But that speech did not take place in a vacuum. Public opinion is running strongly against the bill, and it required political courage to vote for it. If you look at the list of those who voted “No” in both parties, it is mostly members who are engaged in tough re-election campaigns. This is true on both sides of the aisle.”

    “That being the case, and given the fact that the legislation was in fact a negotiated, bipartisan compromise, the first duty of the majority party is to line up its members to support the majority’s bill. *But evidence is growing that the Democrats did no such thing.”*

    “As of yesterday, the Democrats’ House whip, Jim Clyburn said that he hadn’t even begun “whipping” Democratic representatives, and wouldn’t do so unless and until he got orders from Nancy Pelosi. Today, Democratic Congressman Peter DeFazio told NPR that he never was “whipped” on the bill. So Pelosi evidently left Democrats to vote their consciences–which is to say, vote against the bill if they thought it was politically necessary–while counting on Republicans to put the bill over the top.”

    “Pelosi gives a speech that frames the issue, *falsely,* as the result of bad Republican policies, then allows her own threatened representatives to do the popular thing while expecting Republicans to take one for the team by casting an unpopular vote. Which, of course, their Democratic opponents would use against them, thereby increasing the Democratic majority in the House.”

    “If this was Pelosi’s plan it failed, in part, perhaps, because her over-the-top partisan diatribe tipped off Republicans as to what was afoot. If, as it now appears, it’s true that the Democrats made no serious effort to pass the bailout bill, it is just one more example of the failure of leadership we have seen since they took control of Congress.”

    All of which leads me to ask if the Democrats goal is the good of the United States, or is the Democrat goal the enhancement of Democrat political power?

    • snow

      I think it’s pretty obvious, the goal is the enhancement of Democrat political power.

      Question? What do you think about the three busses from the Obama camp going into Ohio to register and pass out ballots to college students?

      • John in Oregon

        On the surface get out the vote is a good thing.

        This particular environment (transient college students) is one ripe for potential voter fraud, residency issues are just one example. The activity in Ohio and elsewhere is consistent with ACORN operations.

        Two facts about ACORN are;

        ACORN has an extensive history of involvement with widespread voter fraud issues. They registered 8 Japanese exchange students here in Portland for example.

        Obama has a long and close relationship with ACORN. Obama was the lawyer on the Green Line lawsuits to force banks to make more loans in “black” neighborhoods.

        • snow

          That’s what I thought also. Ohio determined it was legal, can it be?

  • Tim Lyman

    When the D’s have a house majority and can’t get 95 of their reps to vote for the legislation, it’s not Republicans stopping passage of the bill.

    • Anonymous

      That would be true unless the house leadership told them how to vote. I was encouraged that some of them had ad least thought it over, even if I didn’t totally agree with there reasons. I think a bailout is not the answer at all.

  • Rupert in Springfield

    One thing I really wonder was why Pelosi gave that speech which she had to know would kill the bill.

    Does she think that the longer this hangs out there the more damage will accrue to Republicans?

    We all know the Democrats will gladly sacrifice country for party, Harry Reid cemented that in place with his “The War is Lost” speech. However I cant help but wonder Pelosi’s motivations? If she had wrapped this up, people would have been seething that they had to bail out the government for its mistakes yet again, and that would be that. However she has to know the longer this hangs out there, the more people will begin to think about and understand the cause of this, the largest single factor being the lowering of CRA standards.

    Doesn’t she realize there is endless video footage of Democrat after Democrat standing at the podium insisting that those who were against lowering standards were essentially racist republicans? Doesn’t she realize that the longer this problem hangs out there, the less time people have to put it behind them and the more they might think a little bit more about the wisdom of putting in Obama, a man with little experience and about as deeply in bed with the vermin that put us in the situation as a politician can get?

    I would think Pelosi would want to get this off the table real quick, and am really wondering about her motivations in torpedoing the bill.

  • JessseO

    What the heck?

    A majority of Democrats supported this bill.
    A majority of Republicans opposed it.

    Of COURSE it’s the Republicans who killed the bill. And now they’re saying they voted NO because Nancy Pelosi said something in a speech? That’s insane.

    Those who say the Democrats killed the bill are guilty, as George Bush would say, of “Fuzzy Math.”

  • Anonymous

    Nicole,

    Try and grasp reality and what the democrats did to enable the subprime frenzy. It’s prettyy clear above what happened.

    So are Are you KIDDING me?!

    Try this again.
    The rotten egg that is the CRA was laid by Carter, hatched by Clinton, and nurtured by congressional dems, but Nancy felt she needed to scold the GOP and castigate Bush. She claims no dem responsibility whatsoever.

    http://www.youtube.com/watch?v=cMnSp4qEXNM

    Don’t just escape from reality by clamoring that “This country is in the toilet because of BUSH and MCCAIN’s failed policies and duplicity– not the democrats.”

    If that’s your imaginary world you should back it up.

    And “Barack Hussein Obama” is what he is.
    A far left political hack aligned with corrupted organizations and individuals.

    The $700b bailout you oppose was voted for by more dems than reps.
    The so-called predatory lending practices were facilitated and promoted by your friends the dems who tried to have the federal government provide homeownership where none was justified.
    Typical liberals.

    McCain is far from Bush depsite the left wing’s crazy campaign and your foolish buying of it.

    • Nichole

      Unfortunately, I can’t access the youtube video– I’ll have to try again from a different computer. However, I believe that the housing/banking crisis is largely due to deregulation– and that is a right wing favorite, anonymous.

      McCain has voted for 90% of Bush’s bills. What am I getting wrong here?

      Honestly, I really like McCain as a person– I think that he has a very strong character and he is genuinely interested in pointing the country in the right direction. I don’t believe, however, that he has the ABILITY. His 26 year record in congress is a clear indication of his ability.

      • Chris McMullen

        Nicole, you are entitled to to your own opinion, but you’re not entitled to your own facts.

        You believe the housing crisis is due to deregulation? Prove it. Don’t just say, “I believe…” Without any proof to back up your statements, you look merely unhinged and irrational.

        The public record shows that Community Reinvestment Act and ACORN pressured banks into making bad loans. And morons who were too irresponsible to own a home took these loans. Congressional Dems stated over and over that these was nothing wrong with Fannie and Freddie.

        Why do we ned to keep bailing out people who make bad decisions? Welfare, Medicaid and Section 8 housing ARE NOT WORKING. After decades of “the New Deal”, we have more poor and needy people than ever. Throwing more money at the problem is obviously not helping.

  • Nichole

    Sorry I can’t send the link– this article in its entirety was sent to me by a friend who works for the NY Daily News.

    Spitzer Charges Feds Conspiring to Shield Banks Against State Consumer Protection Laws
    June 17, 2005
    New York Attorney General Eliot Spitzer says a lawsuit filed against him by the federal Office of the Comptroller of the Currency (OCC) is a “shameful … effort to shield the banks from scrutiny by state regulators.” Spitzer has been investigating whether there are racial disparities in lending practices.

    In a blistering response to the OCC’s suit, Spitzer said the agency is working with banks to preempt the states from bringing consumer protection and anti-discrimination cases against national banks.
    “It’s unconscionable that the OCC would help the banks it regulates draft litigation to shield them from reasoned enforcement of consumer protection and civil rights laws and then sit at Counsel table right next to those banks, as happened in court this morning,” Spitzer said.

    “My office has asked a number of leading banks to disclose information regarding the interest rates charged on home mortgage loans. At issue is whether minorities are being charged higher rates. Evidence already disclosed by the banks appears to show a significant racial disparity that could violate state civil rights laws, which my office is responsible for enforcing,” he said.

    Spitzer said the OCC’s claim “defies common sense and a century of joint state and federal oversight of the banking industry.”

    “This position, coming as it does after the OCC effort last year to shield nationally-chartered banks from enforcement of state consumer protection laws, is another indication that the Bush administration sides with corporate interests over consumer interests.”

    Spitzer noted that the OCC�s efforts to protect banks has been opposed by all 50 state attorneys general and all 50 state banking superintendents. Numerous consumer groups also have voiced their opposition, as have the NAACP and AARP.

    In recent testimony to Congress, New York State Banking Superintendent Diana Taylor said the OCC’s actions “usurp the powers of the Congress, stifle state efforts to protect their citizens, and threaten not only the dual banking system but also public confidence in our financial services industry.”

    The OCC’s action followed the filing of a similar suit by The Clearing House Association.

    “This action is consistent with numerous other actions taken by The Clearing House over many years to help ensure uniform regulation of banks that operate in multiple states,” the association said in a statement on its Web site.

    It’s the latest in a series of setbacks for the crusading attorney general. Last week, former Bank of America Corp. broker Theodore Sihpol was found not guilty of improperly trading mutual funds, the first real courtroom test of Spitzer’s campaign against financial fraud.

    “The OCC is absolutely committed to assuring that the national banking system is free of lending discrimination of any sort,” said acting Comptroller of the Currency Julie L. Williams. “This issue is vital and it is complex and it must not be politicized.”

    “Last month, I reached out to the Attorney General’s office to discuss how we each might work in a complementary way, in the areas of our respective jurisdiction, to ensure that laws against lending discrimination are upheld,” she said.

    “The Attorney General’s office has indicated that it is not interested in pursuing such a collaborative approach. Unfortunately, the Attorney General’s actions undermine the OCC’s ability to effectively implement our supervisory responsibilities.”

    “While the New York Attorney General’s office has legitimate authority for a great number of lending institutions operating in the state, federal law provides that lending activities of national banks and their subsidiaries are under the jurisdiction of the OCC,” said Williams.

    “These are not new legal standards,” she added. “The laws here were enacted in 1864.”

    The Clearing House Association said the issue is “whether there should be uniform oversight of national banks that do business in many states.”

    “Regulation by potentially thousands of state and local governmental entities would exponentially increase the complexity of providing credit to consumers and significantly increase lending costs for financial institutions. The direct consumer impact would be higher borrowing costs and reduced access to mortgage financing,” the association said.

    The OCC is in the process of assessing new data collected under the Home Mortgage Disclosure Act as part of its fair lending evaluations.

    “The efforts of the New York Attorney General to examine and direct the actions of national banks and their operating subsidiaries creates confusion and uncertainty concerning the OCC’s authority and its supervisory expectations for national banks that undermines our ability to carry out our supervisory responsibilities,” said Williams.

    In its suit, the OCC noted that the New York Attorney General’s office has sought both public and non-public information about the mortgage lending business of four national banks that do business in New York.

    However, Section 484 of the National Bank Act, enacted in 1864, generally forbids any assertion of visitorial authority by state officers to supervise or examine national banks and prohibits state authorities from inspecting the records of national banks or bringing enforcement actions against national banks, except as specifically authorized by federal law.

    Under federal law and OCC regulation, the operating subsidiaries of national banks are treated the same as the bank itself.

    In seeking relief, the OCC’s complaint states that the New York Attorney General’s “violation of the federal law interferes with the OCC’s ability to carry out its responsibilities under federal law, causing irreparable harm to the OCC’s administration of the national banking system.”

    In addition to seeking a preliminary injunction, the OCC is asking the federal court to:

    • Declare that the state Attorney General may not demand, examine, or inspect the books and records of national banks or their operating subsidiaries, except as specifically authorized under federal law.

    • Declare that the New York agency has no authority to enforce the Equal Credit Opportunity Act, New York Executive Law section 296-a or other laws, rules or regulations concerning the banking activities of national banks or their operating subsidiaries except as specifically authorized under federal law.

    • Permanently enjoin the New York Attorney General from demanding, examining or inspecting the books and records of any national banks or their operating subsidiaries, except as specifically authorized by federal law.

    • Permanently enjoin the New York Attorney General from instituting any enforcement activities against national banks or their operating subsidiaries, except as specifically authorized by federal law and from any further usurpation of the OCC’s exclusive authority to supervise and examine national banks or their operating subsidiaries, except as specifically authorized by federal law.

    The Office of the Comptroller of the Currency was created by Congress to charter national banks, to oversee a nationwide system of banking institutions, and to assure that national banks are safe and sound, competitive and profitable, and capable of serving in the best possible manner the banking needs of their customers.

  • Nichole

    http://www.politico.com/news/stories/0308/9246.html

    This story addresses the specifics behind the cause of the housing crisis, not just state rights to regulate lenders.

    • dean

      I’m still wondering how folks like Chris continue to point to the CRA as a prime cause for the housing meltdown, given the data. CRA has been around since the late 70s, and the juicing up of subprime loans happened in the 2001-2006 period.

      Then add in that one of the places with the highest numbers of foreclosures is the sun belt, particularly Arizona, Nevada, Georgia, Florida, and California. And these foreclosures are concentrated in the the ex-urban areas, not the inner cities. So how did CRA have anything at all to do with this? Maybe in Detroit, but not in the sun belt exurbs.

      What we had was a whole lot of people betting the future on ever rising home prices, and a failure of the Bush administration to regulate. CRA had nothing to do with it.

      • Charlie L

        Dean, you are TOTALLY CORRECT that the CRA didn’t have anything to do with the subprime mess. As recently as 2006, over 85% of subprime loans were NON-CRA related. And, of course, CRA doesn’t force subprime lending, just FAIR and EQUAL lending IF the lender wants FDIC protection.

        But, Dean, you miss the point. “Blame the CRA” is the current Republican talking point, so you should expect everybody here to parrot it, without letting the facts get in the way.

        Oh, and Ruper: “That the goverment put severe pressure on banks to lend to unqualified people is inarguable.” is total bullshit. The facts are right here if you would actually like to read them, rather than just talk the talking point.

        http://www.ourfuture.org/blog-entry/2008094030/firing-back-cra-strikeoutexcuse-diversionstrikeout-libel

        I don’t expect you folks to actually CARE about the facts and figures behind this talking point, but if you DID respect truth, you would.

        • Chris McMullen

          Charlie, care to cite a source that’s not left-wing agitprop?

          CRAs aside, the bottom line is that Fannie and Freddie, run by Democrats and backed by Democrats, caused this mess with their lax standards and Government Sponsored status.

          • Charlie L

            Excuse me? “Run by Democrats?” “Backed by Democrats?” Did I miss somethign about who was in charge from 2000 to 2006?

            Oh, and don’t get me started about how Bush/Cheney/Et Al. were so happy to ride the housing boom and “growth of the ownership society” when they KNEW the trouble under it? Or didn’t they know? They were either a. pandering liars or b. stupid idiots. It doesn’t really matter which, does it?

            But of course, the Democrats who had very little to do with managing and/or profiting from this “crisis” are totally responsible for it, and the Republicans are the good guys, as always.

          • Chris McMullen

            Look at the video Charlie: Maxine Waters and Barney Frank chastising Fannie Mae regulators for scrutinizing their cash cow. They said they couldn’t see anything wrong with Fannie/Freddie. Meanwhile, Frank Raines and Jamie Gorelick cooked the books and made off with millions.

            Artur Davis of Alabama issued the following statement to “Hannity & Colmes”:

            “Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong. By the way, I wish my Republican colleagues would admit that they missed the early warning signs, that Wall Street deregulation was overheating the securities market and promoting dangerously lax lending practices. When it comes to the debacle in our capital markets, there is much blame to go around for both sides.”

            Put that in your pipe and smoke it.

          • Charlie L

            Rep Davis received nearly $300K in donations (almost 25% of his total donations received) in the last cycle from the “Finance/Insur/RealEst” arena, i.e. exactly the people who got us into this mess.

            But gee, I don’t suppose that impacts his “confession” in any way.

            P.S. I don’t smoke. That crap’ll kill you. But of course, that’s a PERSONAL decision, I wouldn’t hold the tobacco manufacturers responsible in any way for making the poison.

          • Chris McMullen

            Yeah and Obama received $126,349 from Fannie/Freddie. Glad he worked so hard on reforming that entity.

            Listen, Republicans screwed the pooch on this thing as well, but deregulation was not the major problem. No action taken concerning Fannie & Freddie was.

          • Charlie L

            Yeah, spending some time and money to get Fannie and Freddy in line would have been a good idea in 2004 and 2005 or even as late as 2006.

            Remind me who was in charge of Congress back then, would you please?

            But NO, admitting that there was a problem then might have put a dent in the “soaring” economy (rich people getting MUCH richer, while the middle class shrunk or died) and impacted on the possibility of Republican victories, so they took the easy “look the other way” approach.

            You are not really suggesting that it was the responsibility of the newly minted Democratic Congress that was still looking at a 50-50 senate and veto-loving President to “solve” the problem of Fannie and Freddy in 2007 and 2008, are you?

  • Anonymous

    “Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.”
    ~The Honorable Senator John McCain, September 2008

    And funny thing– this is a speech made by Obama a year ago warning about deregulation.
    http://www.nytimes.com/2007/09/17/us/politics/16text-obama.html?_r=1&oref=slogin

    My research also shows that deregulation began in the REAGAN era. What exactly am I missing here, Chris?

  • Nichole
  • Nichole

    I went to Europe in July, and was amazed at how everyone just KNOWS that Obama will win the ticket. I have my doubts, but it’s already clear that many of you don’t agree with me about the race issues in the US. Here’s a foreigner’s take on the bailout… and I have to say, I agree with him.

    http://seekingalpha.com/article/96726-keiser-us-dollar-backed-by-bananas

  • Rupert in Springfield

    Good points Chris McMullen, couldn’t have said it better myself.

    From your post:

    >Why do we ned to keep bailing out people who make bad decisions? Welfare, Medicaid and Section 8 housing ARE NOT WORKING.

    Probably because the entire liberal economic philosophy is based upon forcing those who make good decisions to work ever harder harder to pick up the slack for those who make bad decisions. Its an economy based upon the lowest common denominator. That is to say, the economy, both personal and national, should be held back by to the rate of the slowest individual in the race rather than advanced by the fastest.

    Liberals like to think of it as altruism for disadvantaged, Conservatives like to think of it as punishment for the responsible. I prefer to think of it as simple idiocy, need on one persons part does not compel a responsibility to provide a fiscal salve to a third party’s liberal guilt feelings.

    No matter how you slice it though, its a very strange philosophy for a group that largely tends to think of evolution as fact. Combining belief in evolution with belief in a liberal economic system is not necessarily logically incompatible. However claiming society will advance under such conditions is.

    I like to point out this little gem to my liberal friends whenever I need to blow off a little steam in a brawl or drink throwing match.

    • dean

      Rupert…like those of us who did not make bad decisions on our mortgages now having to bail out those investors who made bad decisions? That is part of the liberal economic philosophy? Working people paying for Wall street errors?

      Why is claiming society will advance under a liberal philosophy a logical error? Didn’t America advance quite a bit economically in the decades following the Roosevelt Administration? Hasn’t it not advanced an inch under the Bush Administration? Which philosophy appears to be more flawed?

      • Rupert in Springfield

        >Working people paying for Wall street errors?

        It would sure seem to be part of the liberal philosophy, Pelosi did push for the bill after all. And it did seem more democrats voted for it than Republicans. Those Republicans that didn’t said they had a big problem with provisions in the bill that allowed for the government paying for peoples mortgages, or resetting the terms. Those Democrats who didnt vote for it were upset it wasnt liberal enough. So I don’t know, you tell me? I sure hope you aren’t trying to argue the bailout package is any part of conservative fiscal policy. I mean you arent really trying to say that are you?

        Oh, and by the way, I hope you don’t come back at me with anything like “well Bush supported the bill”

        Bush is hardly a conservative especially in fiscal matters.

        Again, as I have reminded you of often, you argue from a partisan perspective, I argue from an ideological one. Do not conflate party and ideology, you will lose every time.

        >Hasn’t it not advanced an inch under the Bush Administration?

        Double negatives aside, with that, you have just defeated your own argument. Bush has an incredibly liberal economic philosophy. Are you unaware of this? The only conservative aspect of the Bush fiscal policy has been the tax cuts, and with them revenues went up. Thus proving my point again.

        See Spending, Bush

        See Prescription Drug Plan, Bush.

        Your next point would be what?

        Advice, avoid the Clinton era to bolster your point, you will be defeated in one move.

  • Anonymous

    “I went to Europe in July, and was amazed at how everyone just KNOWS that Obama will win”

    Gee I wonder how they “Know” that?

    Could it be the annointing of Barak by our own media?

  • John in Oregon

    Nicole, A little tip about CNN / BBC is illustrated nicely by a specific example. During the recent rocket war against Israel BBC did a report from a small Lebanese town. The BBC reporter walked down the street showing the bombed out devastation. As she approached the intersection, she turned, facing the camera and intoned that the Israeli airforce had totally destroyed the town, every one was homeless.

    As it happens there was a reporter from London ch4 on the same journalist tour. He did a report from the same street and the same intersection. He showed the street and the bombed out devastation. At the end of his report he commented about the precision of the Israeli air strikes. Pointing to his right the camera paned down the cross street showing block after block of untouched houses.

    That’s your problem with Fox. They don’t edit out the news you don’t want to hear. CNN and BBC do.

    > * [T]he House would have passed the $700b bailout plan, I’m sure, if it encompassed aid to those who have lost their homes.*

    First, a $300 billion package of compensation for homeowners was passed the week prior to the bailout bill.

    Second, in the House the Democratic Whip is Congressman Jim Clyburn. The responsibility of the Whip is to get the troops to support the party position on legislation.

    Congressman Jim Clyburn told Ploitico that he had not begun encouraging Democratic representatives to support the bailout bill, and wouldn’t do so unless and until he got orders from Nancy Pelosi.

    Yesterday, Democratic Congressman Peter DeFazio told NPR that he never was encouraged to support the bill.

    So now we have independent conformation from two Democratic Congressman that Speaker Pelosi, as a matter of Democratic Party policy _did not support_ the bailout bill.

    And that is why *almost half of the Democrats voted no* on the bill.

    > *[A]nd although Oregon is a red(neck) state that will likely be awarded to McCain…*

    Yeah I got your rant about Iraq but Red Neck Oregon? I am forced to wonder which alternate universe you perceive. Oregon a Red State? I mean, REALLY?

  • John in Oregon

    Dean you said > *I’m still wondering how folks like Chris continue to point to the CRA as a prime cause for the housing meltdown, given the data. CRA has been around since the late 70s, and the juicing up of subprime loans happened in the 2001-2006 period.*

    Your facts are accurate.

    Your facts are also incomplete. An example of how history can be edited by deletion.

    It is true the CRA originated in the late 70’s and in its original form encouraged outreach to low income groups. In terms of the financial markets the act was benign and it did result in growth of home ownership.

    That changed in the mid to late 90s when three things happened.

    First, the CRA requirements were increased and enforcement tools added to _compel_ the low income loans.

    Second, changes were made that pushed Fannie and Freddie into a newly formalized sub-prime lending market.

    Third, no less than four different Federal regularity arms began to enforce the requirements.

    Which is why, for example, in 1998 the updated FED manual for mortgage lenders said;

    *”Discrimination may be observed* when a lender’s *underwriting policies contain arbitrary or outdated criteria* that effectively disqualify many *urban or lower–income* minority applicants.”

    Those out dated criteria included;

    *O* “Credit History: Lack of credit history should not be seen as a negative factor.”

    *O* “Down Payment and Closing Costs: Accumulating enough savings to cover the various costs associated with a mortgage loan is often a significant barrier to homeownership by lower-income applicants.”

    *O* “Sources of Income: In addition to primary employment income, Fannie Mae and Freddie Mac will accept the following as valid income sources: overtime and part–time work, second jobs (including seasonal work), retirement and Social Security income, alimony, child support, Veterans Administration (VA) benefits, welfare payments, and unemployment benefits.”

    Accepting these new criteria was hardly voluntary. The Fed warned the banks:

    “Did You Know? *Failure to comply* with the Equal Credit Opportunity Act or Regulation B can subject a financial institution to *civil liability for actual and punitive damages in individual or class actions.* Liability for punitive damages can be as much as $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor’s net worth in class actions.”

    By 1999 the lawsuits to punish banks that didn’t make the loans were unleashed. The class-action suit brought by Obama and ACORN against Citicorp which forced them to accept ever more marginal mortgage applications under the CRA is only one example.

    So, as you can see this is all consistent with your observation that the problem exploded after 2000.

  • Rupert in Springfield

    Excellent post John.

    However I would like to point out that it is some peoples position that Obama has spent a fair amount of time in the Senate and is thus qualified to be president. Yet despite that time and being the second largest recipient from the Fmae Fmac slush fund he had absolutely no connection to the entities. Its odd that Obama’s connection here is not questioned more by most of the press. It seemed there was a lot of interest in payola during the last election cycle. Curious.

    That the government put severe pressure on banks to lend to unqualified people is inarguable. We have Barney Frank on the floor of the house two years ago championing this policy. The fact that the consequences of that sort lending might take some time to manifest, seems to be very hard to grasp for some people. Why this is so is beyond me.

    • dean

      Rupert….Obama was elected late 04, took office in early 05, and the housing bubble popped in mid 05. Even assuming he got all the money you say he did (which I suspect is for his presidential campaign, even more after the fact,) what bearing does this have on assigning responsibility for the subprime meltdown? What legislation did he write or vote in those few short months between his swearing in and the meltdown on that in your view contributed to it?

      And again with the Barney Frank. If he was arguing this point 2 years ago, that was after the bubble burst, not before. So what is your point?

      Plus…are you in favor of public financing for House and Senate campaigns? If not, how do you recommend getting legislators out of the clutches of big donors?

      John…thanks for dealing with the facts. Question: if the CRA requirements increased in the mid to late 90s, who increased them, the Clinton Administration or the Republican Congress or both? And if these were a problem later on, then why didn’t the Republican Congress and Republican president change the rules back in the early 2000s? They had 5 years to get a handle on this. Why didn’t they? Did Barney Frank stop them?

      Your list of loan criteria is interesting….but not particularly damning. Income is income. Loan costs should not be higher for minorities than majorities. And they are often amortized into the loan (they were in my case).

      Yes…the Fed has requirements to help prevent red lining. But again, they only apply to banks with insured deposits. They did not apply to the investment banks that have now all gone bye bye. They did not apply to the Hedge funds that will be the next to go bye bye. And they did not apply to the mortgage brokers who arranged 50% of the subprime loans. I still see at best a very weak case for blaming this mess on poor people. After all, the insured banks who were “forced” to make loans to poor people are the ones still in business.

  • Rupert in Springfield

    Oh, ok, I see, Obama isnt responsible for anything, wasnt there, didnt do it.

    Oh, unless we are talking about experience, then he was there and had a lot of responsibility.

    Oh, and I guess he was number two on the Fmac and Fmae bribe list just because they had too much money laying around.

    I got it now. That makes sense.

    Good lord, you do get yourself into controtions defending your buds dont you?

    As for Frank, he has made the speech countless times. You and I both know that had I listed an earlier example, you would have said it was way too early. Now you are saying it was way too late.

    Basically, for a democrat to have any guilt whatsoever, he would have had to say exactly what Frank has been preaching for years, on the exact day you have in mind, and gotten legislation passed immediatly right after saying it and had the bill named after him

    But for Republicans its different. For Republicans, Bush as an example, “It happened on his watch” is all you need.

    Come on, you dont expect anyone to buy that partisan garbage do you?

    I sure dont, the Dems are guilty as hell on this one and I think you know it.

    • dean

      Oh…so Barney Frank made other speeches when he was a minority member of the House…and what? Those speeches caused the subprime meltdown? That is your entire case? Like Republicans not supporting the bailout bill because Nancy P. hurt their feelings? This is your version of how the world works?

      I didn’t say Obama had no responsibility. I can’t prove a negative. I’m asking you to cite something….anything Obama sponsored that caused or contributed to the financial meltdown. You did not respond, so I’ll asume you’ve got bupkiss on that one.

      University of Oregon economist Marc Thoma has crunched the numbers, and says that CRA regulated institutions initiated all of 20% of the subprime mortgages. And those are the institutions that are presently sound. If his numbers are correct, case closed on the CRA. Over and out. Find another scapegoat.

      I’ll put 75% of the blame on neither the Democrats nor the Republicans, but on Wall Street investors who fashioned the noose they and we are now hanging from. I’ll assign 10% of the blame to we the people who chowed down on the free meals our rising real estate values (through no effort on our parts) provided. I’ll assign 12% to the Republicans in Congress and the White House who managed the nation and economy during the period in which the housing bubble inflated and then burst. And I’ll assign the remaining 3% to Democrats for being enablers.

      Guilty as hell? Whatever.

  • Charlie L

    Rupert:

    I think EVERYONE is guilty as hell on this one, and mostly, it’s because of the MONEY. Fan/Fed were throwing around 40+ MILLION in “lobbying” cash (please note, the people spreading that money around now work for McCain) at the direction of executives making tens and hundreds of millions (yes, those people are now working for Obama) and they were giving it to Democrats and Republicans alike, so that the gravy train would continue. Bush (or, more accurately, the people who run the administration) looked the other way because it helped them to keep power and continue to get THEIR hundreds of millions.

    The money corrupted EVERYONE.

    And I wouldn’t have any problem admitting that, except for that really nasty title that this thread has, that I haven’t seen one of you Rethuglican-apologist regulars make any comment about.

    If it really isn’t a “partisan” issue, then let’s call it like it is: ALL THE POLITICIANS (DEMOCRATS AND REPLUBLICANS) SCREWED US FOR THE MONEY, AND NOW THEY WANT TO DO IT SOME MORE.

    And guess what, neither Obama nor McCain is going to do a damn bit better. McCain has most of the Fan/Fed money people working for him, and Obama has all the rest of them working for him.

  • Rupert in Springfield

    >I think EVERYONE is guilty as hell on this one, and mostly, it’s because of the MONEY.

    I sure dont and I dont think the facts support that in any way.

    If people are guilty as hell due to the money that Fmac and Fmae were bribing people with, then it doesn’t follow that EVERYONE is guilty, since most bribes went to Democrats. Are you unaware Chris Dodd and Obama were the number one and two recipients respectively? Seems odd a freshman Senator should rank that high, but there you go. Wonder why he got all that money and it only was his first term? Well, I guess we would know if the media was as concerned about this scandel as they were with Jack Abramof. Gee, I wonder why they were interested in who got money in that scandel right before an election and not in this one? I mean this one is way bigger. Way further reaching. Why wouldnt they be reporting on who got the money, what they did in exchange for it…..why … oh why I wonder?

    >(please note, the people spreading that money around now work for McCain)

    What? Fannie Maes former chairman Harold Raines, is on Obama’s staff as a lead economic advisor. I realize the media has tried to keep a lid on this so maybe you missed it.

    >The money corrupted EVERYONE.

    To some extent it corrupted a lot of people. But lets face it, those calling to loosen up CRA restrictions were by and large Democrats, those calling to strengthen them were by and large Republicans. The CRA is the genesis of this mess, and since it is a Democrat creation, the balance of blame certainly tilts towrds them.

    >that I haven’t seen one of you Rethuglican-apologist regulars make any comment about.

    Well maybe because the title is apt given Pelosi’s speech and her entire attitude regarding this issue. “Don’t blame us ( democrats ) for any of this”

    The Democrats are totally duplicitous on this, they want to lay it all at the feet of Republicans, which is absurd given the history of events that led us here are for the most part the Democrats own making.

    >And guess what, neither Obama nor McCain is going to do a damn bit better.

    Maybe, however, with McCain there is a chance the CRA might be repealed. A real slim chance but a chance nevertheless. With Obama you can count on it being expanded. Neither will cure the problem, but given his far left leanings on spending, you can be assured Obama will exacerbate it.

  • Charlie L

    Ken Guenther, Rick Davis, William Timmons Sr., Arthur B. Culvahouse Jr., Aquiles Suarez, John Green, Frederic V. Malek ALL work for McCain now.

    It’s so interesting that the Republicans already had advertising in place to attack the Democrats for passing the bailout, even while they were supposedly being rounded up by McCain to support it. Hmmm. Now THAT is duplicitous beyond words.

    I’m sorry that you can’t see that that YOUR side could EVER do ANYTHING wrong.

    I guess that’s why we liberals will lose — we can actually see when our side is wrong, while you are so sure of your side’s correctness that you can’t even see the truth when it hits you in the head. Keep “making your own reality.” It seems to be the solution to all Rethuglican problems, whether they be with the Constitution, any given Rule of Law, or even scientific consensus like evolution or global warming.

    • dean

      Rupert…let’s play a game. You can keep making stuff up and I’ll keep calling you on it.

      Rupert wrote: “Fannie Mae’s former chairman Harold Raines, is on Obama’s staff as a lead economic advisor.”

      Only he isn’t. His actual name is Franklin, not Harold, and he has nothing whatsoever to do with the Obama campaign. This is according to himself and Obama and the Washington Post reporter who was the one who interviewed Raines, but what do they know? By the way, he left Fannie 4 years ago…but hey….don’t let facts get in the way of what you believe. Just read right wing blogs and repeat their nonsense.

      http://voices.washingtonpost.com/fact-checker/2008/09/obamas_fannie_mae_connection.html

      It is already lying at the feet of Republicans. Bush is at 23% approval, it is looking like an electoral landslide for Obama, and the Dems are going to increase their majorities in the Senate and House. As I’ve said before, the Dems did nothing to earn their way back into power. The Republicans are simply imploding.

      You may need to start hunting for real estate in a more conservative nation, if you can find one.

      • dean

        And Rupert…have you ever heard of Ocam’s Razor? Do you agree or disagree with its central premise, that the explanation of any phenomenon should make as few assumptions as possible, eliminating those that make no difference in the observable predictions of the explanatory hypothesis or theory?

        It seems to me you can’t acept the simple, obvious, logical point that an essentially free capital market created an unsustainable bubble in search of the proverbial gravy train. In other words, it was capitalism that failed here. As it does from time to time. Blaming poor people and out of power politicians violates Occam.

  • John in Oregon

    Dean you asked > *[W]ho increased them, the Clinton Administration or the Republican Congress or both?*

    The proposal was driven from Democrat side with Clinton’s backing. Keep in mind the dynamics here. Clinton was a strong president and he was dealing with a new Republican majority. The Republicans didn’t have a strong Senate majority, the measure sounded good (who could oppose more home ownership), and the measure has an implied racial component. Clinton played his hand well and importantly he had the support of some Republicans.

    > *And if these were a problem later on, then why didn’t the Republican Congress and Republican president change the rules back in the early 2000s? They had 5 years to get a handle on this. Why didn’t they? Did Barney Frank stop them?*

    We can get to Barney Frank later. Short answer, the Republicans and some Democrats did.

    1999 Legislation introduced which removes the requirement that banks must make bad loans. Sponsored by Gramm, McCain, other Republicans and some Democrats. Clinton played the Veto card.

    2002 McCain had introduced legislation—co-sponsored with the House Democratic leader Dick Gephardt—to create a Corporate Subsidy Reform Commission.

    2003 Bush pushed to increase the regulation of Fannie Mae and Freddie Mac. Bitterly opposed by Democrats.

    2004 Raines and his team “sought to interfere” with the OFHEO investigation by trying to get Congress to start up a separate probe of OFHEO. Fannie Mae also lobbied Congress to cut OFHEO’s funds unless it got rid of the top official in charge of investigating Fannie Mae. Raines and his team grossly overstated Fannie Mae’s earnings — to the tune of $10.6 billion — for the purpose of paying themselves big bonuses.

    2005, Following the Raines / Fannie corruption, Republican Senators to cosponsor the Federal Housing Enterprise Regulatory Reform Act, the strongest legislation introduced up to that time to control Fannie and Freddie.

    2006 But there still is the matter of cleaning up Fannie Mae. Senator Sununu and his colleagues on the Senate banking committee have been trying for two years to win approval of a bill that would create a new regulatory body for Fannie Mae and give that body the authority to crack down on the company’s riskier practices. Schumer, Dodd and others “slow-walk the process”.

    2007 Barney Frank and other Democrats try to remove the cap on Fannie and Freddie loans.

    2008, May. Barney Frank and other Democrats try to remove the cap on Fannie and Freddie loans. Frank proclaims Fannie and Freddie sound.

    2008 . Fannie and Freddie seized, now under criminal investigation by the Justice Department, and will likely be in trouble with the Securities and Exchange Commission,

    > *Your list of loan criteria is interesting….but not particularly damning. Income is income…*

    You left out Credit History and Down Payment.

    > *Yes…the Fed has requirements to help prevent red lining. But again, they only apply to banks with insured deposits.*

    The FED is only one of four Federal Regulators involved. All in the financial community were regulated. Countrywide had a CRA rating and aggressively kept it high.

    > *They did not apply to the Hedge funds that will be the next to go bye bye.*

    Hedge Funds do not make loans. They trade financial instruments, made their killing in late 07 and early 08. One “gentleman’s” personal take was $30 Billion.

    > *And they did not apply to the mortgage brokers who arranged 50% of the subprime loans.*

    See above.

    > *[T]the housing bubble popped in mid 05*

    Correction, Mid 06.

    This is a key point. We have had many housing bubbles in the past, none caused this kind or scale of problem. Also, 2006 doesn’t look like the usual “Housing Bubble”.

    The housing bubble follows a predictable pattern. Demand increases push housing prices up. Rising prices push housing construction up. Increasing construction causes prices to fall or if supply cannot meet demand then high prices push down demand.

    That’s not what happened here. In 2006 housing prices stopped rising and went flat. Some markets fell back 5% at most.

    It wasn’t until nearly 2 years later that housing prices fell. And prices fell do to falling demand not increasing supply. This is not what is found in a demand / supply bubble.

    It is consistent with a Credit Bubble created by easy credit conditions. Yes, interest rates had an impact. The impact of CRA pushing down normal financial controls combined with Fannie and Freddie serving as a conduit for suspect mortgages is a lot larger. Either way, government is the root cause of this problem and the serious damage was done between 2004 and 2007.

    The point Rupert is making is Obama had the opportunity to stand on the side of reigning in Government and chose more of the same. The donation figures come from government reports and can be found at Open Secrets and others.

  • Charlie L

    John, you seem to overlook a few (hardly) minor points in trying to put this on the Democrats, rather than (at the very least) sharing it with the Republicans.

    >2003 Bush pushed to increase the regulation of Fannie Mae and Freddie Mac. Bitterly opposed by Democrats.

    So what if the Democrats opposed it? In 2003, Bush could push through absolutely ANYTHING he wanted (and did) as long as he had his “majority of the majority” walking the line. If he didn’t get what he (supposedly) wanted, it was only because he couldn’t convince his own party. The Democrats were (unfortunately for all of us) fairly impotent in 2003.

    >2006 But there still is the matter of cleaning up Fannie Mae. Senator Sununu and his colleagues on the Senate banking committee have been trying for two years to win approval of a bill that would create a new regulatory body for Fannie Mae and give that body the authority to crack down on the company’s riskier practices. Schumer, Dodd and others “slow-walk the process”.

    Hmmm. Seems like 2004 to 2006 was a time when the Democrats couldn’t stop a snail with a bazooka. The Republicans were pushing through anything and everything and totally ignoring the minority as if they were invisible. Schumer and Dodd were somehow in their way? I DO NOT THINK SO.

    TAKE SOME FUCKING RESPONSIBILITY. The Republicans COULD have done something, but they were riding the gravy train of contributions and goodwill just like the Democrats, and were not about to do ANYTHING that would possibly slow down the (supposed) economic prosperity.

    The REPUBLICANS were in COMPLETE CHARGE for 6 FULL YEARS and DID EXACTLY WHAT THEY WANTED, which was to remove regulation, remove controls, remove oversight and SET CAPITALISM FREE. And guess what, capitalism ate everything it could get its hands on and then threw up all over us. The “invisible hand” throttled us.

  • John in Oregon

    Charlie L said > *[T]he CRA didn’t have anything to do with the subprime mess. As recently as 2006, over 85% of subprime loans were NON-CRA related. And, of course, CRA doesn’t force subprime lending, just FAIR and EQUAL lending IF the lender wants FDIC protection.*

    Lets take this apart a bit at a time.

    > *loans were NON-CRA related*

    There is no such thing as a non-CRA loan. All loan paperwork contains the Government Monitoring section. Some loans were given to comply with CRA quotas however there is no way to determine which loans they are.

    > *CRA doesn’t force subprime lending, just FAIR and EQUAL lending IF the lender wants FDIC protection.*

    This is patently false. There are four, I repeat FOUR, and again *FOUR* different Federal Regulators involved. Far more than just FDIC.

    > *CRA doesn’t force subprime lending*

    Do I understand you to mean that lending, to comply with CRA, that is made to borrows with poor credit histories, no down payments, and unstable income are PRIME loans?

    > *As recently as 2006, over 85% of subprime loans*

    I have no idea what you were trying to tell us here. The fact is that the bulk of sub-prime loans are performing. That is they are current and making payments on time.

    The present problem is Fannie and Freddie mixed low quality and high quality loans into derivatives. No one has a way to know what that paper is worth. This is a credit problem generated by attempts to comply with CRA and provide outlets for those low quality loans.

    Comments by Ralph Alter illustrate this nicely. He worked in mortgage brokering and knows the business. He states;

    “In hindsight, a series of conversations I had with representatives from Countrywide has become illuminating. There is a portion of Fannie Mae Form 1003, the basic mortgage loan application, that is listed as “Information for Government Monitoring Purposes.” In this section, the loan officer, together with the mortgage applicant, describes the potential borrower’s Ethnicity, Race and Sex. There is also a section to describe the nature of the interview: one fills in either “Face-to-face; Mail; Telephone, or Internet.”

    He then describes a typical conversation with a Countrywide Underwriter.

    *CW Underwriter:* I need your help on the “Smith” file. We need you to complete the Government Monitoring Section of the 1003.

    *Broker:* I did complete the Government Monitoring section.

    *CW Underwriter:* But you haven’t filled in the borrower’s Race or Ethnicity.

    *Broker:* If you notice, the Borrower checked the box indicating: “I do not wish to furnish this information.”

    *CW Underwriter:* You also checked the box indicating that this interview was done face-to-face

    *Broker:* So?

    *CW Underwriter:* So you saw him. Is he black?

    *Broker:* I don’t understand. My client indicated his preference to keep this information to himself.

    *CW Underwriter:* Well, you saw him and you know his race and ethnicity. *Our ability to fund our deals and source new money depends on doing a certain percentage of loans with black and minority clients.* If you want this loan underwritten at Countrywide, you need to furnish this information: Is he black?

  • Charlie L

    Right. Talk all about how it was the DEMOCRATS fault.

    When I explain that the DEMOCRATS WERE NOT IN CHARGE, you change the subject and ignore that fact.

    This CRA stuff sound AWFUL, John. Really, the REPUBLICANS WHO HAD COMPLETE AND TOTAL CONTROL OF GOVERNMENT FROM 2001 to 2007 SHOULD HAVE FIXED IT.

    But, they didn’t.

    I wonder why?

    COuld it be that they were financially and politically riding the wave of “the housing boom” and “the ownership economy” and “the great rise in housing.” Hmmmm?

    WHY DIDN’T THE REPUBLICANS FIX THIS? THEY WERE ABLE TO FIX EVERYTHING ELSE WITHOUT A SINGLE DEMOCRATIC VOTE WHENEVER THEY FELT LIKE IT.

  • Rupert in Springfield

    Dean

    Yep, you are right, Franklin Delano Raines, not Harold Raines. See how easy it is to admit someone is right and I was wrong?

    Would that you could have that maturity level, but, for the time being I will assume it remains ever vacant from you. I would assume you still will insist the word “several” has interchangeable meaning with the word “all”.

    At any rate.

    The point remains. Obama did have very strong ties to Fmae and Fmac and you cant really dispute that. He was the second largest receiver of bribe money after Dodd and its real hard to believe he was getting that money just because they had no place else to put it.

    Obama getting advice from Raines and Johnson is a bonus.

    As for Occam’s Razor, what in the world are you on about? I think we need a little charting of the Dean theory on all of this.

    Stage one – It was all the Republicans fault – reason, it happened on Bush’s watch. Ok, so this simplistic reasoning was easily defeated by pointing out if there is a stain on my carpet and I am home, its more likely that my dog had an accident than that I need immediate help from a urologist.

    Stage two – Denial of any responsibility of the Democrats. Why? Because the CRA happened 20 years prior, thus could not be responsible. This was easily defeated by pointing out that Medicare tends to cost us a lot of money now, even though it was passed decades ago. Laws do carry over.

    Stage three – After you looked up what the CRA was, trying to make a correspondence between Clintons adjustment of standards and housing defaults. This was easily defeated by pointing out that adjustment of standards does not result in immediate default, cyclical housing prices combined with them do.

    OK – So now we are on stage four. Occam’s razor and attempting to say I am blaming poor people. If nothing else it seems you are admitting defeat in this by saying there was no conspiracy, just simple incompetence (that is Occam’s razor btw ). Ok, so at least you are not off laying all the blame on the Republicans.

    As for me blaming poor people, nice try, but it does reveal your classism. I said the government lowered standards and forced loans to people who could not afford them. That has nothing to do with poor people. Your leap to that is incredibly classist. Re-education camp and a set of black pajamas for you!

    As for Bush’s approval ratings, get over it, Bush has approval ratings Pelosi would give her right arm for.

    I do think its possible Obama will win, maybe even likely. as far as any sort of mandate? Forget about it. With a press wholly in the tank for him unwilling to raise the slightest eyebrow at the most outrageous of Obama’s ties to this whole fiasco he still only beats McCain by single digits in the polls at best.

    Obama may very well win, but he will have a mandate less than that of Bush’s first term. As for his big spending plans? Decimated. The last thing this country can afford right now is another wild spending Democrat in the White House so there will be little appetite for that I’m afraid.

  • Rupert in Springfield

    Charlie L:

    >This CRA stuff sound AWFUL, John. Really, the REPUBLICANS WHO HAD COMPLETE AND TOTAL CONTROL OF GOVERNMENT FROM 2001 to 2007 SHOULD HAVE FIXED IT.

    You wont find me defending the Republicans on this issue, they definitely should have fixed it. They didn’t.

    However, that does not mean they are responsible for it. This was a Democrat law, passed by Democrats with the standards lowered more and more by Democrats, not Republicans. When any Republican protested, as some did, they were immediately called a racist or hating of the poor by Barney Frank.

    Republicans did have congressional majorities for six years, that’s true. That is not the same as total control and I think you know that. To say that within those six years, anything they didn’t fix they had culpability for is really a little much.

  • Charlie L

    Hmmm. Let’s see. The Republicans had control of the House, the Senate, The Executive, every single administrative agency was stocked with cronies who “towed the line,” even the supposedly impartial Justice Department turned out to be an arm of the political White House. They had almost every single District Court totally in hand, and the SCOTUS.

    Exactly what part of government didn’t they control? Oh right, the Dog Catcher in East Buckcrap was still a Democrat.

    But the Democrats are “responsible” for anything that the Republicans chose to enjoy the benefits of, even as they knew it would someday explode in SOMEBODY’s face.

    BTW, Rupert, I don’t really care if you defend or attack the Republicans. It was John in Oregon who refuses to admit or acknowledge that the Republicans let this problem fester because they could profit from it politiclly and financially. Unless, of course, you two are the same person.

  • Charlie L

    Hmmm. Let’s see. The Republicans had control of the House, the Senate, The Executive, every single administrative agency was stocked with cronies who “towed the line,” even the supposedly impartial Justice Department turned out to be an arm of the political White House. They had almost every single District Court totally in hand, and the SCOTUS.

    Exactly what part of government didn’t they control? Oh right, the Dog Catcher in East New Jersey was still a Democrat.

    But the Democrats are “responsible” for anything that the Republicans chose to enjoy the benefits of, even as they knew it would someday explode in SOMEBODY’s face.

    BTW, Rupert, I don’t really care if you defend or attack the Republicans. It was John in Oregon who refuses to admit or acknowledge that the Republicans let this problem fester because they could profit from it politiclly and financially. Unless, of course, you two are the same person.

  • Rupert in Springfield

    Oh, and Dean?

    Nice try with the Raines having no connection to Obama thing. I sure hope that was meant in jest, especially in light of the Washington Post citations. Given that the post is hardly an unbiased source in general I would laugh off a cite from them. However the have reported more than once about Obamas connection to Raines, especially his advising them on mortgage matters.

    Weirdly, Obama never denied his involvement with Johnson and Raines until recently, even though these events were reported a while ago.

    Oh thats right, back then he was touting his experience, how inteligent he was to have all these great advisors.. Now I guess its different.

    Anyhooooo, time to serve up a heapin helpin of crow for ya:

    Anita Huslin reported in the Wash. Post on July 16th 2008 on Raines:

    “He has shaved eight points off his golf handicap, taken a corner office in Steve Case’s D.C. conglomeration of finance, entertainment and health-care companies and more recently, taken calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing policy matters.”

    OOpps, too bad Dean

    But wait, there’s more

    In the same paper, the Washington Post, an editorial on August 28, 2008 said the following:

    “But a few Republicans, such as Mr. McCain and Sen. Richard C. Shelby (Ala.), who has been chairman and ranking Republican on the Senate Banking Committee, have taken them on over the years, warning about their use of an implicit government guarantee to pursue private profits. Meanwhile, Democrats were not only politically but intellectually committed to the companies, seeing them as innovative public-private institutions that have been a boon to homeownership. In the current crisis, their biggest backers have been Democrats such as Senate Banking Committee Chairman Christopher J. Dodd (Conn.) and House Financial Services Committee Chairman Barney Frank (Mass.). Two members of Mr. Obama’s political circle, James A. Johnson and Franklin D. Raines, are former chief executives of Fannie Mae. ”

    Ouch….Dean, I feel for ya now.

    You know I think if I was in the airforce that would be called a shoot down. Maybe I could start putting little Dean logos on the side of my plane for all the shoot downs?

    At any rate, there goes your contention that Obama had no ties to Raines.

    This Is JacklordGOD, splash one one bandit, returning to base.

  • Rupert in Springfield

    Charlie, don’t be obtuse. You know having majorities in congress doesn’t mean they control everything.

    But fine, you want to play it that way?

    Great, then using your logic the Democrats are totally responsible for Iraq.

    They have majorities in the house and the Senate, thus according to your definition they totally control those branches. They can cut off Iraq funding anytime.

    Therefore, they are entirely responsible.

    Get real, Republicans had majorities for six years and any problem they didn’t solve is therefore totally their responsibility?

    Can I count on you to stick with that logic if Obama is elected and congress still has Dem majorities?

  • John in Oregon

    > *So what if the Democrats opposed it? In 2003, Bush could push through absolutely ANYTHING he wanted (and did) as long as he had his “majority of the majority” walking the line.*

    I have said here more than once that in 2003 the political zietghist did not exist to rein in Fannie and Freddie. I say this being fully aware that my party knows how to keep its Democratic troops in line on core Democratic positions.

    The question was, were attempts made to regulate Fannie and Freddie and the answer is YES. Your answer seems to be that by failing, the attempt was never made. Interesting that’s a variant of the argument Bill O’Reilly makes.

    > *The Republicans COULD have done something, but they were riding the gravy train of contributions and goodwill just like the Democrats, and were not about to do ANYTHING that would possibly slow down the (supposed) economic prosperity.*

    It is true Fannie and Freddie did spend a gravy train of money contributions. I would us the word corruption.

    Leaving out the expletives, pajoritives and four letter language. In 2005/2006 following the Fannie / Freddie accounting scandal, worse than Enron, was the time when regulating Fannie and Freddie was possible. The Democratic front was united against the regulation.

    > *The REPUBLICANS were in COMPLETE CHARGE for 6 FULL YEARS and DID EXACTLY WHAT THEY WANTED, which was to remove regulation, remove controls, remove oversight and SET CAPITALISM FREE. And guess what, capitalism ate everything it could get its hands on and then threw up all over us.*

    This is the part of this discussion I really enjoy. So lets review;

    The Senate Banking and House Financial Services committees provided the only oversight of Fannie and Freddie.

    On 6 occasions over the last 10 years attempts were made, mostly by Republicans, to regulate Fannie and Freddie.

    The position of the Democratic party was to oppose regulation.

    The Republican attempts failed to regulate Fannie and Freddie.

    —— *Therefor we conclude* ——

    The Republicans were at fault because they removed controls and the Democrats were not to blame because they wanted regulation.

    Further review;

    The CRA required risky loans to low income borrowers.

    Federal Regulators using the CRA compelled banks to make the loans.

    Fannie and Freddie provided a market for those banks to sell the loans.

    Fannie and Freddie bundled good and risky loans which they sold to investors.

    —— *Therefor we conclude* ——

    Free market capitalism ate everything it could get its hands on and then threw up all over us and Republicans were at fault because they removed regulation.

    > *WHY DIDN’T THE REPUBLICANS FIX THIS? THEY WERE ABLE TO FIX EVERYTHING ELSE WITHOUT A SINGLE DEMOCRATIC VOTE WHENEVER THEY FELT LIKE IT… REPUBLICANS WHO HAD COMPLETE AND TOTAL CONTROL OF GOVERNMENT FROM 2001 to 2007 SHOULD HAVE FIXED IT.*

    Charlie, the fact that you are shouting and screaming speaks volumes. You don’t want to know that politics is at the center of the problem. Hopefully it shows you are beginning to understand this mess was caused by Government meddling in the markets.

    Get Real. You know Government is to blame. Otherwise why would you shout and go to such twisted extremes to turn day to night and point the blame elsewhere.

    Notice Obama says lets fight the fire and worry about blame later. When? Like after November?

    So what does Government propose? Rush to a bailout. Ignore the cause that will just keep pouring gas on the fire.

    • dean

      John…I agree government is partly to blame. But not for the reasons you cite. You can’t deny that the Republican party, egged on by conservatives, and abbeted by some Democrats, were deregulators, not regulators. A deregulation philosophy led them to put people in charge of the 4 institutions you mention who were not of a mind to reign in a market bubble. Fannie and Freddie, as private capital institutions took a late stake in the bubble and they cashed in on it for a short time. The core issue you have raised is about the “implicit” guarentee that the Feds would bail them out if they overreached. Okay…the Fed has now done this. The Fed also bailed out AIG, which had no implicit guarentee, and they bailed out several large banks, also with no guarentee. They just sent $25 billion to the auto industry as well. Key point, some private insitutions are “too big to fail.” They wreck too many lives on the way down.

      To me, this is a lesson in political capitalism. It suggests that our system is both politics and capitalism, or a mixed social and private framework mitigated through legislation and regulation. I have no problem with this. I just want the social end well managed by intelligent people who have the public interest in their minds and hearts. It is free marketers who have a problem with it because it contradicts their core philosophy, that the less government has to do in markets the better. This is why it is so important for you and Rupert and otehr conservatives to fix the blame for this debacle on government, when it was clearly a market failure. I don’t buy it, and your evidence is weak.

      Rupert… I did not deny ANY responsibility for the Democrats in Congress. I just did not asign them the level or type of responsibility you want me to. Don’t exagerate my position. The Dems were weenie enablers. But the evidence is strong that the CRA and “poor people” had little to do with the rise or collapse of the bubble. I’ve shown you my evidence. You have not shown me any to counter it. John has presented some, but I think he way overstates his conclusion based on a few anecdotes.

      Your comparison of CRA with Medicare is instructive. Both are federal programs. They have that much in common. But Medicare’s problems are related to demographics (aging population) and ever rising health care delivery costs in a broken mixed market system. CRA, in my opinion, got caught up in the bubble. It did not cause it, and the evidence is clear in the change in the rate of loan denials during teh Bush Administration. They went way down. It was all about rising home values, not about government forcing lenders to loan to people they otherwise would not have loaned to. That is where the evidence points, and that is the problem to address.

      The Washington Post reporting was pretty clear that it was Raines who said he had “taken calls” from people in the Obama campaign asking for his sage advice. McCain then used that statement to claim falsley that Raines was in fact an Obama advosor, a lie you repeated. Raines then said no…he never did advise Obama, and Obama also said no. They were correcting the lie of McCain. Now you say

      “Weirdly, Obama never denied his involvement with Johnson and Raines until recently, even though these events were reported a while ago.”

      Why would he have denied it until McCain decided to make an issue of it? Should he go around denying every rumor lying under every rock? That would kep him busy.

      You have no case here. You are just flapping your arms around with no chance to take flight. Give it up.

      I’ll repeat one very last time. The Bush-Republican responsibility is POLITICAL. The market failed itself. But the voter will asign political blame to those in charge of government when the debacle happened. They can’t unelect Wall Street CEOs. After 3 years of an Obama administration with Democratic majorities in House and Senate, you can bet your life that you and John and Jerry and the merry Catalyst band will all blame the Dems for every problem on God’s green earth. And sooner or later things will get bad enough, whether the dems caused it or not, that the American voter will look the other way for solutions again. Yin and Yan. We are forever shackled to each other.

  • Charlie L

    BTW, I am just curious to ask the few people who waste their time here (unfortunately, for the last day or so, including me)…

    Do you favor the “bailout” as currently structured and approved by the Senate and to be voted in the house on Friday?*

    BTW, no Sarah Palin “non-answer” answers, please. A simple YES or NO will suffice.

    *For the record, I answer the question with a NO.

  • Rupert in Springfield

    Dean – Nice try, but I see the Washington post articles were a little too much for you. Kinda harsh of me to cite your own source back at you but I couldn’t resist when I found it so at odds with your assertion.

    Anyway, I like your take on it that unless Obama himself talked to Raines, then it doesn’t account. I guess Raines and Johnson were just yakking with some low level staffer about who has the best Chinese food in town. Yeah right, Raines talks to staffers. You know, its scary how much you will accuse the Dems. .

    As for the CRA, I have given you plenty of evidence, you just simply have a hard time refuting the fact that both Clinton and Reich took responsibility for something you say they have no responsibility for. Again, your argument that because something is disconnected in time, then it has no relation to events is about as weak as it gets and I think you know it. Your refusal to face the simple fact that it was Dems, not Reps that lowered the CRA standards is amazing. Why you insist it was the other way around is beyond me, I mean that one isn’t even close.

    This has got to be my favourite statement of yours:

    >Why would he have denied it until McCain decided to make an issue of it?

    Because Obama has been running around saying he is the voice of change. Pretty weird change if you ask me to be taking advice from Raines and Johnson. I would think Obama would want to be as far away as possible from these two guys who were both known to be about as close to criminals as you can get.

    So, I guess you are saying its fine for Obama to take advice from low life’s and its not something to be concerned about until someone else brings it up. I guess kind of like the way you excuse him hanging out in a racist church for 20 years before figuring out what the minister was saying. Or hanging around with terrorists to get his political career started.

    Gee, I really wonder if you are as able to fudge what’s right and wrong when it comes to Republicans? I wonder?

    Oh, and by the way, why don’t you get off this silly partisan “housing bubble”

    What’s a bubble anyway?

    Why is it anytime the economy is good under a Republican, its a bubble, any time its good under a Democrat it’s a sound economy?

    God, you really wound yourself up in a knot with this one. Frankly I think you should have quit with your “it happened twenty years ago” before you knew what the CRA was and how it had been changed.

    For the record, could you please state for me if your refusal to admit you are wrong still encompasses your past insistence that the word “all” means the same as the word “several”?

    • dean

      Rupert…ok…I’m chuckling. Thanks for that.

      Why did Obama take advice from Raines? Maybe because he didn’t, according to both Raines and himself. You keep citing the same source, yet I sent you a link to your Washington Post where they agreed with Obama. Raines is not his advisor, does not advise the campaign, and the 2 have never talked. Raines claimed in an interview that some Obama staff had asked his advice, but there is no corroboration. He may have been just puffing himself up. End of story.

      Johnson was close to Obama and at one point was on his VP search committee. He either resigned or was canned. McCain on the other hand, still has key staffers, on his payroll, who were on “retainer” from Fannie until last month. You didn’t bother to mention that.

      Obama does not say he is “the voice” of change. He is running on a theme of change. At times like this, not a bad theme, and even McCain has caught onto it. Obama is also not running for Saint. That he has past relationships with shady characters is not a disqualification. If it was, every politician with more than 2 years experience is probably disqualified. You and I are both disqualified by communicating with each other. And if it turns out some Nazi is the one who finances the Catalyst, every blogger who ever wrote in is going to be disqualified.

      No Rupert…you gave me no evidence at all on CRA. You keep repeating Clinton and Reich, yet you offered no citations. I did a search and found nothing from either of them on the topic. The CRA is a red herring. It had next to zero to do with this fiasco. There are not enough poor minority people out there with mortgages to bankrupt Wall Street. Its like a tick bleeding an elephant to death. Unlikely.

      What’s a bubble? You are kidding right? It is when people invest in something…anything…not for its intrinsic value but simply because other people are investing in it and the price is going up. So they are betting on that price continuing up. Amazon.com was a bubble. Tulips in 1637 were a bubble. Gold was a bubble in the 1970s. Beanie Babies were a bubble. The stock market is often a bubble.

      Most are fairly harmless…just a way to seperate a few fools from their money. Some, like the one we just experienced, are rather problematic because they drag down those who were mere passengers, like the sinking of the Titanic.

      Anytime the economy is good under a Republican is a bubble? Did I say that? I don’t remember saying that. I’ll have to think about it. The dot.com bubble was certainly a Clinton era happening, but it did not do much damage and left a great network of fiber optic cables that are quite useable behind.

      I honestly don’t know what you are talking about with the “all and several” bit Rupert. Its not like I carry around every Catalyst utterence I ever made in my frontal cortex. But for the record, no, I do not think several = all, unless in rare cases where several is all there is. If I ever stated or implied otherwise, I was wrong.

      For Charlie…my answer is I favor a YES vote on it. If I were designing it, I would change a few things. But given an up or down choice, I would vote AYE. The risk is too high if this goes down.

  • Rupert in Springfield

    Charlie L

    NO

    The fact that this is supposed to be an emergancy, and that it couldnt be a clean bill, no pork, tells me a lot. The money hasnt even been run off the printing press and they are already abusing it. That should give some indication as to how much supervison there will be so see that property flippers dont get their mortgage paid off.

    I think the bill will be passed and I think there will probably be a million tales of abuse of taxpayer money.

    At this point there seems to be only two certainties about the economy shold the bill pass.

    1) There will be abuse of the money. Payoffs to millionairs flipping houses etc.

    2) If Obama is elected, we will all have a fun time watching how Dean excuses every excess of the bill, or blames it all on Republicans.

  • Charlie L

    It’s a pity the won’t actually be printing the money. That would at least provide some work for paper and ink companies (though, of course, probably in China).

    This money they will move with the click of a few keys, and suddenly, America will be hundreds of billions of dollars poorer.

    The pork is particularly offensive, but I guess they couldn’t muster the votes without it. Please note, the pork is spread VERY EVENLY across both pathetic parties.

    • dean

      Charlie…no…it does not work that way. If we borrow money at 1-2% interest, which is what T-bills are selling at, and we buy up vacant Vegas McMansions and mouldering Miami Condos with that money, then we own the housing stock, or the mortgages on that stock. The bundled mortgages contain both good and bad loans, but since no one knows how much of each, a price is tough to set. The estimate I saw is that borrowing $700B results in a $20B annual payment. If this action prevents further decline in housing prices, we will eventually be able to either collect on the mortgages (because fewer will go into default if prices stop dropping) or we can re-sell the housing as the market recovers. And if Obama’s proposal goes through after he is elected to tax stock transactions to pay back the difference between the price and sale if there is a loss, then we are out nothing.

      On the other hand, if we gamble by doing nothing, and the market drops by another 25 or 50%, retirement savings are toast. And that is just the start if credit dries up.

      To the extent that the “pork,” like the tax credits on alternative energy results in more, better, cleaner, cheaper electrical power, we get somethign for that as well.

      It comes down to trust. Do we believe “the government” will hire professional green eyeshade dudes that do due dillegence on this stuff we are about to buy and sell? Having worked for the federal government, I think the odds are 50-50 we will do this right.

  • Charlie L

    Dean, we’re talking about a Bush appointee here, and you wonder if they’ll hire professionals?

    You mean like the people they hired at FEMA? The people they hired in Iraq? The people they hired ANYWHERE?

    And whenever you worked for the feds, Dean, it had to have been a time when QUALIFICATIONS might actually have factored into the hiring decision, rather than your opinion of Roe v. Wade (for reconstruction work in Iraq — it might have a value if you were going to be working for HHS).

    I don’t trust THIS government as far as I can throw it, and don’t trust the next one much more.

    I would let the economy tank. I know people who lost 50% of their pension in Leyman Bros., so I figure that’s a baseline. They’re not getting any help, why should the second round? Let’s see the DJIA at 5,000.

    • dean

      Well…you have a point there. Generally civil service hirees have to meet objective thresholds, but political appointees (i.e. head of FEMA) do not. Since by definition these will be temporary staff, they could end up with lax standards. Hopefully Congressional oversight, written into the bill, will prevent that. Plus they only have a few months left and it will take time to staff up. And I do trust the next administration more, especially if it is Democratic. They take governing more seriously.

      Watch what you with for Charlie. We are both probably too young to remember the great depresion, but my parents lived through it and it was pretty bad all around. There is no benefit in impoverishing millions of people.

  • John in Oregon

    Nice presentation Dean and nice try. I see you modified your language to new terms, however……

    > *You can’t deny that the Republican party, egged on by conservatives, and abbeted (sic) by some Democrats, were deregulators, not regulators.*

    Of course Republicans and Conservatives tend to less regulation, Government intervention, and meddling. Your argument is what? That six attempts to establish, for the first time, some sort of Fannie and Freddie overview is what, deregulation?

    > *A deregulation philosophy led them to put people in charge of the 4 institutions you mention who were not of a mind to reign in a market bubble.*

    That’s a nice “image” of deregulation philosophy you paint, and for sake of argument I will simply let it stand. Your image is also totally irrelevant. Beyond published balance sheet accounting accuracy, no Federal Agency had any real authority over Fannie or Freddie.

    In fact the OFHEO investigation of Fannie’s balance sheet which found the same kind of manipulations and irregularities that took down Author Anderson, Global Crossing, and Enron should have resulted in Democrat support of oversight.

    As recently as September 9th on NPR, Democratic Sen. Christopher Dodd, chairman of the Senate Banking Committee, questioned Treasury Department authority to takeover Freddie and Fannie.

    > *Fannie and Freddie, as private capital institutions took a late stake in the bubble and they cashed in on it for a short time.*

    Nice mastery of the fine art of slippery language and misdirection. Good catch on the latest talking points.

    HOWEVER, Fannie and Freddie are Government Sponsored Enterprises. You do not get to rename them and move them from the DC belt way to Wall Street.

    > *The core issue you have raised is about the “implicit” guarentee (sic) that the Feds would bail them out if they overreached.*

    Again a nice attempt at misdirection. Any implicit guarantee of Fannie and Freddie assets is quite the lesser of the mess and wreckage left by Fannie and Freddie.

    The greater wreckage in the wake was that Fannie and Freddie served as the Government provided guarantor and purchaser of risky loans banks were compelled to make.

    As the amount of risky loans held by Fannie and Freddie grew beyond tolerable levels they repackaged them and sold them as class A paper.

    And that Dean is the key fact.

    • dean

      Well…we have our different interpretations. 90% of the damage was done by the time democrats assumed control of the relevant oversight committees in 2007. Fannie and Freddie are (were) governed by a private board. As far as I know, the government does not appoint any members, does not provide any funds, and has no role in operations other than banking oversight.

      Ask yourself John…if Fannie and Freddie were already government agencies, then why did they have to take them over under a conservatorship, same as for AIG?

      I don’t know what “government sponsorship” means. THey are chartered to perform a specific role in residential mortgages. They are limited to that role. But beyond that…what?

      Again….banks made the risky loans all on their own. They needed no prodding from anyone because they were making money hand over fist. It was a Ponzi scheme.

      As for Republican attempts at regulating Fannie-Freddie. As I understand it, this was a Chuck Hagel bill that never made it to the floor of the senate at the time when the Republicans controlled the senate. Horse left barn. Case closed.

      Yes, Fannie and Freddie packaged and re-sold lousy loans. And Moody’s, another private institution gave 3A ratings to these and other packages. No argument there.

  • John in Oregon

    Barney Frank lied to Bill O’Reilly on national television last night. Barney Frank stated last night that after 2006 was the first time he had the chance to get more oversight of Fannie and Freddie.

    That statement was a flat out lie.

    Barney had the chance to support such legislation in *2001.* Instead he opposed it.

    Barney had the chance to support such legislation in *2003.* Instead he opposed it.

    Barney had the chance to support such legislation in *2005.* Instead he opposed it.

  • Charlie L

    John in Oregon…

    Would you please be so kind as to point to the specific VOTES that were taken in 2001, 2003, 2005 where Mr. Frank could have gotten more oversight on Fannie and Freddie?

    I would like to look up the votes on the specific bills and see how Mr. Frank voted.

  • John in Oregon

    The original question here dealt with Nancy Pelosi’s partisan stewardship as speaker. The premise of the piece was to question whether Polosi had engineered a failure to pass the bailout bill.

    Some early data points suggested yes. Now additional data points are in.

    The earliest data point was the Polosi’s confrontational speech.

    Next came the revelation that Democratic Whip, Congressman Jim Clyburn told Ploitico that he had not begun encouraging Democratic representatives to support the bailout bill, and wouldn’t do so unless and until he got orders from Nancy Pelosi.

    Followed shortly when Democratic Congressman Peter DeFazio told NPR that he never was encouraged to support the bill.

    Now we can add from ABC news; Rep. Hank Johnson, D-Ga., told me yesterday that he felt no pressure at all to vote for the bill.

    And finally, during an extended vote period, 5 Democrat Committee Chairs in VERY safe districts vote against the bailout.

    One must admit that Pelosi is a very skilled political partisan.

    Its worth noting that Democratic Congressman Peter DeFazio had a very sensible no bail out proposal. The political maneuvering of the last week torpedoed all but one of his proposals. For the record his points were;

    1) Require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions.

    2) Require the Securities and Exchange Commission to restricting naked short sells permanently

    3) Require the Securities and Exchange Commission to restore the up-tick rule permanently.

    4) “Net Worth Certificate Program

    5) Increase the FDIC Insurance limit from $100,000 to $250,000.

    • Charlie L

      BTW, though for very different reasons, I suspect we are in total agreement that Nancy Pelosi’s stewardship as Speaker of the House has been pathetic.

      Perhaps she will lose her seat in November and the House will choose to take away her Speakership in January. Strangely enough, (and I wouldn’t put it past them), they are not REQUIRED to do so just because she wouldn’t be a member of Congress.

      • John in Oregon

        Nice try at misdirection. As you well know legislation is road blocked well before a vote to save embarrassment of an on the record vote.

        The specific legislation is below.

        *2002,* Corporate Subsidy Reform Commission Act. Sponsored by House Democratic leader Dick Gephardt and Senator John McCain. (I mistyped 2002 to 2001.)

        *2003,* I don’t have the bill number or name at hand at the moment. However this article from the New York Times sums it up nicely.

        *New Agency Proposed to Oversee Freddie Mac and Fannie Mae*
        September 11, 2003

        “The most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.”

        “The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.”

        *2005,* Congressman Mike Oxley, brought H.R. 1461 to the House Financial Services Committee. Senior HSF Committee Democrat Barney Frank opposed the measure.

        In the Senate, Senators. Richard Shelby, John Sununu, Chuck Hagel Elizabeth Dole. Supported the legislation.

        Senators in opposition were Democratic Sens Chris Dodd, John Kerry, Barack Obama and Hillary Clinton who _actively opposed_ such measures and _further weakened existing regulation._

        Barney Franks statement on national television was the first time he had the chance to support regulating Fannie and Freddie was 2006. As the record above shows that statement was a LIE.

        If in fact Frank had supported any of those three even though they failed his statement would still be a LIE.

        Had Frank supported any of those bills I am sure he would have said so.

        • Charlie L

          >>Nice try at misdirection. As you well know legislation is road blocked well before a vote to save embarrassment of an on the record vote.

          Well, this would be an issue, except for one tiny little problem.

          In 2002, 2003 and 2006, the REPUBLICANS, not the Democrats were in charge of Congress. In charge of the agenda. In charge of debate. In charge of EVERYTHING. And, as I recall, they were not interested in debate, not even within their own party, where they were following a “majority of the majority” rule to determine how things would go.

          Here’s a great speech by Bush where he talks about Fannie and Freddie letting first time home owners get the house they deserve even if their credit is bad:
          http://www.youtube.com/watch?v=GkAtUq0OJ68

          Yeah, the Republicans were ALL OVER the Fannie and Freddie problems it was the Democrats who were stopping them.

          So, I really don’t see where the MINORITY Chair of ANYTHING matters a damn.

          Republican House. Republican Senate. Republican President. So, please point me to all the bills that were passed between January 2001 and January 2007 to address all the problems. Or, were the Republians too busy riding the gravy train of “housing prosperity” to write any regulations or perform any oversight?

  • Charlie L

    Bill numbers John. Not more BS. I want the House Bill Numbers where Barney Frank voted NO on regulating Fannie and Freddie.

    Come on. They must be there. Barnie is a total LIAR, so he must have voted NO three times like you said.

    Can we have the BILL NUMBERS please, so I can check THOMAS for Frank’s lying votes? Please.

    • John in Oregon

      > *Bill numbers John. Not more BS.*

      Charlie, in time you will learn that kind of tactic doesn’t work with me.

      Any competent lawyer will tell you never ask a question unless you know the answer. If you do you will get the answer slammed back in your face.

      Kinda like what just happened above, huh?

      *HEH*

  • Charlie L

    You have not showed me a single bill where Barney Frank took a NO vote and the Republicans took a YES vote that would have altered this game.

    And Barney Frank is a red herring anyway. RULED IRRELEVENT. Not pertinent to this discussion.

    I am still amazed that you continue to try and put this on the Democrats. They didn’t have the POWER to change their underwear, much less the lending laws between 2001 and 2007.

    The REpublicans were in charge, and they made a mess of it. I don’t expect any supporters of them to take responsibility for the mess they made, accountability isn’t really a part of the Republican agenda, but I __am__ totally amazed that they think they can do a full 180 degree flip of responsibility.

    Giant, greedy investment houses and banks do the stealing while the corporate-supporting, regulation-hating Republicans are in charge, and the supporters of the Republican party here at Catalyst want to blame the poor home owners and the out-of-power and impotent Democrats for the problem.

    Next we’ll be blaming the Polar Bears for dying off. They should have migrated south or something, or learned to tread water better.

  • John in Oregon

    Sorry Charlie, its not my job to teach you the fifth grade fundamentals of the legislative process.

    A little food for thought. Bill O’Reilly is a rather interesting personality. Being on the opinion side I find he gets off the factual rails on occasion. He came up in the reporting side of the business and as a rule is the consummate professional.

    Bill can put the meaning to the old phrase “getting someone’s Irish up”. Somewhat inside the biz, I suspect that O’Reilly lost a bundle on Mortgage Backed Securities.

    Earlier this week O’Reilly unloaded on Frank big time for his failure to control Fannie and Freddie. I mean full blown, off the hinges, Irish up.

    Last night Congressman Frank went on O’Reilly to protest his innocence. He was asked a simple and direct question. What did you do Congressman Frank to prevent the damage of Fannie and Freddie?

    Frank’s answer is as I quoted earlier. O’Reilly unloaded on him big time.

    Under those circumstances, with only the remotest chance that Barney Frank had done anything to support those three pieces of legislation Frank would have said so.

    Congressman Frank had a duty as a steward of Fannie and Freddie to protect the public. He took no action to regulate either Fannie or Freddie until he moved the rotten egg to the Treasury Department just before it hatched.

    Within the acquisition of knowledge, some specialize, others generalize. Specialization that ranges from knowing everything about nothing on the one hand to nothing about everything on the other.

    Frankly I have no interest in playing the juvenile game of narrow the scope until we know nothing of anything Barney Frank did.

    • dean

      John…i saw the O’Reily-Frank smackdown. He didn;t have his Irish up. He had a phony tantrum in order to avoid a reasoned debate. Its a tactic he uses whenever its convenient to him.

      Between his embarrasing blathering, I heard Frank say a couple of important points. First, that he was not chair of the House banking committee until 2007. Second, that within a few months, under his leadership they got a bill out that increased oversight on Fannie. The first point is obviously true, the second I don’t know about one way or the other. But O’Reilly’s fake tantrum seemed to be about his inability to get Frank to admit to culpability in the demise of Fannie. he based what little point he had on a clip he played of Frank offering his opinion that in the long run Fannie would be sound as an investment, not so in the short run.

      Lets assume Frank was offering false encouragement to investors so that they would not pull their money out and bankrupt the place, leaving America with a mess to clean up. Was that a bad thing to do? For investors yes. For the American people no. But Barney Frank is not their investment counselor or broker.

      Anyway….we are left where we started. Barney Frank was a minority House member from 1995 through 2006. The housing bubble began in late 2001 and lasted through most of 2005. What he voted for or against, as one of 435 members, is just not relevant to the outcome. And you can’t make it so.

  • John in Oregon

    Interestingly I agree with much of what you say Dean. There is too much performance outrage. Whoopi, does it. Bill Maher does it. And of course the king of performance outrage is Michael Savage.

    John Stossel doesn’t do it, which shows its not necessary.

    > *I heard Frank say a couple of important points. First, that he was not chair of the House banking committee until 2007. Second, that within a few months, under his leadership they got a bill out that increased oversight on Fannie. The first point is obviously true, the second I don’t know about one way or the other.*

    Absolutely true that Frank became chair at the start of 2007, prior to that he was Ranking Member of the committee, the second most powerful committee position.

    On the second point, without getting into motivation and all that, in late July 2008 legislation was passed and signed transferring oversight from the Congress to the Treasury Department. The legislation, Federal Housing Finance Regulatory Reform Act of 2008, (HR6521) essentially identical to the 2003 proposal, created the new Federal Housing Finance Agency to regulate Fannie and Freddie.

    > *about his inability to get Frank to admit to culpability in the demise of Fannie. he based what little point he had on a clip he played of Frank offering his opinion that in the long run Fannie would be sound as an investment, not so in the short run.*

    One problem I have had is Bill tends to focus on one or two data points, looking at the trees not the forest. While a generalist like I. F. Stone would look at the forest and see the lay of the land.

    O’Reily used a clip from 2007 to make the point that the job of Frank (and Bush) was to warn people that Fannie and Freddie were bankrupt. Unfortunately for Bill that clip, aside from being a bit less strident and mentioning the housing slow down, is not much different from all the other clips of Frank going back to the mid 90’s.

    Unfortunately for Congressman Frank, there are all those clips going back to the mid 90’s so his position opposing regulation is abundantly on the public record. For example the Boston Globe reported that “Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.”

    So for Frank to state 2007 was the first chance is a lie. He could have supported the legislation back in 2003. He did not need to wait until 2007 to pass the legislation.

    BTW I disagree with O’Reily that Barney Frank, (Congress or Bush for that matter) had a duty to warn the public that Fannie and Freddie were bankrupt. The duty was and is policing Fannie and Fredie to make sure that they made decisions safely and honestly.

    Dean, the questions you raised prompted me to ponder something I hadn’t considered earlier. Why, after more that a decade of opposing oversight and regulation, did Barney Frank (and other Democrats) suddenly change position and support the oversight legislation originally proposed in 2003?

    First a bit about accountants. They are methodical going through books entry by entry. Checking the books of a multi-billion dollar can literally take years.

    On July 30 Bush signed legislation granting the Executive Branch authority over Fannie and Freddie for the first time. Although the authority did not become in force until early September, Treasury did begin to look at Fannie and Freddies books immediately.

    And now we come to the KEY event. Treasury authority over Fannie and Freddie came into effect on September 7. Within 36 hours Treasury seized Fannie and Freddie, delaying only long enough to inform the McCain and Obama campaigns.

    What that tells me is that when Treasury started looking at Fannie and Freddie’s books in August they found the books very far off the accepted accounting practices reservation. It must have been obvious in just 30 days that both were way past bankrupt.

    Dean you mentioned that Moody had given A bond ratings. Moody made those ratings based on representations of the bonds made by Fannie and Freddie.

    Should Moody have distrusted Fannie and Freddie’s representations? Should Moody have unraveled and checked each and every mortgage in a Fannie / Freddie bundle?

    In hindsight yes. Its clear now that mortgagee operations within Fannie and Freddie were fraudulent. Moody should not have relied on the repeated assurances of Congressman Frank and others that Fannie and Freddie were sound.

    I noticed today on Fox News Sunday that Britt Hume nailed the facts.

    But we don’t need to rely on Hume to make the point. Under Bill Clinton the Department of Housing and Urban Development tried to impose a new regulation on Fannie, and was thwarted by Frank. Clinton now blames such Democrats for planting the seeds of todays economic crisis.

    Clinton said recently “I think the responsibility that 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.”

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