Posted on 10/11/2008 4:52:27 AM PDT by markomalley
Once, Fannie Mae and Freddie Mac seemed a relatively quiet backwater of politics and finance.
Now the world echoes with the collapse of banks that stumbled into the American subprime lending mess, and any political connection to Freddie and Fannie can be almost as toxic as their loan pools.
Minutes into Tuesday’s debate, John McCain was calling the failure of the two federally chartered mortgage giants “the match that started this forest fire.”
The Republican accused Barack Obama of taking a hike while McCain and other lawmakers pushed for reform in 2005. McCain’s ads, meanwhile, try to tar the Democrat with associations with Fannie’s ex-CEOs.
Obama was ready.
“Let’s, first of all, understand that the biggest problem in this whole process was the deregulation of the financial system,” he said, and then noted how McCain “bragged about the fact that he is a deregulator.”
Another touche was on McCain’s campaign manager’s lobbying firm getting Freddie Mac money — $15,000 a month almost until the government takeover.
“There are no saints in this saga, only sinners,” said Larry Sabato, University of Virginia political scientist. “Fannie and Freddie were honey pots for consultants, lobbyists and political hacks. They were all making out like bandits, and they’ve contributed to the public cynicism.”
The political finger-pointing has become so furious that it has reached all the way to Kay Barnes, who is running for Congress. When she was Kansas City’s mayor, she served on a Fannie advisory board, an “important role” in the corporation’s “reckless agenda,” according to the National Republican Congressional Committee, working for U.S. Rep. Sam Graves.
That’s like blaming a Titanic passenger for running into the iceberg, retorted Barnes spokesman Steve Glorioso.
(Excerpt) Read more at kansascity.com ...
McCain proposed legislation specifically to tighten the regs that govern what sort of mortgages Fanny and Freddy would buy. Libs killed it claiming there was no problem.
McCain is a de regulator and only liberals and other morons actually believe more regulation is better then less in a capitalistic system such as we have, BUT never the less he DID NOT vote to loosen regulations on these 2 agencies, that was the Dems doing.
The McCain campaign said the $15,000 a month went to Davis's firm, not to Davis. "Mr. Davis has received no salary or compensation ... no profit or partner distributions ... neither has Mr. Davis received any equity in the firm based on profits derived since his financial separation" from the firm in 2006, the campaign said in a statement posted on its Web site.
Sorry, markomalley, but that attitude (”a pox on all of them”) is why Democrats get to skate through this kind of scandal.
Fannie and Freddie were Democrat political machines. You leave the Clinton Administration and enter senior corporate management (maybe even CEO) of Fannie Mae. Being a GSE (government sponsored enterprise), your business thrives by being “guaranteed by the full faith and credit” of the US Treasury. And being a GSE, you have a “public role” to support low income housing and the policy makers (in the Dem Congress) demanded more subsidized low income housing — because they were in the pocket of Fannie and Freddie.
Fannie Mae was considered one of the “Great” Companies back in 2000 when Jim Collins wrote his wildly popular best seller “Good To Great”. This book focused on the few (11) campanies that made the jump from “good to great” in the decade of the 1990’s. I’d like to see Collins or some analyst like Larry Kudlow dig in to see what happened to completely unravel that “Good To Great” story. There’s a follow-up best seller in there someplace.
Ok but he must also answer the Deregulator label
I assume McCain meant stifling regulations on business that drive them out of the country and NOT on the banking industry
Is this correct ?
In terms of the financial crisis and especially at F&F, it was a case of government regulations and interference forcing banks to issue toxic mortgages to people who couldn't afford them. Due diligence was thrown out the window to eliminate "redlining." And it was the Dems in Congress who harassed and demeaned the government regulators when they testified before Congress. There is plenty of video out there showing Maxine Waters, Meeks, Frank, et. al., browbeating and castigating USG regulators of F&F calling them the problem and "lynching" Raines.
May I add that it was Dems in Congress exempting Fannie and Freddie from Sarbannes-Oxley which stifled and constrained a major portion of our economy in the years after the 2000-1 recession and forced much of the IPO market to exit NYC in favor of London.
Democrats favor regulation ALL THE TIME (79,000 pages added to the Federal Register this past year) except when it impacts their pet projects and favorite donors (Nancy Pelosi wanting exemptions for Guam or American Somoa from the Minimum Wage law because the largest employer there was substantially owned by her husband? I think that’s one example) and Fannie and Freddie qualified on all counts.
Thing is the public will hear the term DEREGULATOR and not care about a lengthly explanation
Just like the mindless CHANGE and HOPE
See my post 10
Bump
Those politicians who got lots of money from Fannie and Freddie need to come before a Senate hearing board. Funny thing is — some of them are either members of or buddies with members of those groups.
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