Posted on 12/21/2008 11:26:20 AM PST by Sub-Driver
WH accuses Times of 'gross negligence' By: Mike Allen December 21, 2008 02:12 PM EST
The White House on Sunday issued a blistering 500-word response to a scathing 5,000 word article on the front page of Sunday's New York Times that says President Bush and his style and philosophy of governing played a direct role in the mortgage meltdown that's crippling the nation's economy.
The response accused the nation's largest Sunday paper of "gross negligence."
"The Times' 'reporting' in this story amounted to finding selected quotes to support a story the reporters fully intended to write from the onset, while disregarding anything that didn't fit their point of view," White House Press Secretary Dana Perino said in an e-mailed statement.
The article was part of the newspaper's "The Reckoning Series" about the nation's market implosion, and was headlined, "‘Ownership society’: White House Philosophy Stoked Mortgage Bonfire."
"Eight years after arriving in Washington vowing to spread the dream of homeownership, Mr. Bush is leaving office, as he himself said recently, 'faced with the prospect of a global meltdown' with roots in the housing sector he so ardently championed," says the article by Jo Becker, Sheryl Gay Stolberg and Stephen Labaton. "There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk. But the story of how we got here is partly one of Mr. Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials. From his earliest days in office, Mr. Bush paired his belief that Americans do best when they own their own home with his conviction that markets do best when let alone. ...
(Excerpt) Read more at politico.com ...
The Liberals PRAVDA has spoken and anyone that dares to question them will be re-educated by the Obama mania media...
We knew this was coming yesterday. Naturally, the white house is on the defensive instead of attacking the real perpetrators of this crisis: the incoming majority party.
The times is an absurd embarrasment to journalism and a stain on humanity.
"New Agency Proposed to Oversee Freddie Mac and Fannie Mae"
By STEPHEN LABATON Published: September 11, 2003 The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. ... ... Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing. ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'' Representative Melvin L. Watt, Democrat of North Carolina, agreed.http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63
bump for blatant lies
Nice find, The people at the Free Republic Rock
Ummmm...read the second-to-last paragraph. Dems are blamed.
This article is a good example of corrupt and twisted journalism. Of course, all of us want clean air, clean water and economic success for everyone! However to twist that into condoning the stealth socialism carried out by the Democrats is outrageous at best, more like criminal and irresponsible journalism.
What a shame. Perhaps now President Bush has an inkling about how our Marines think.
bttt
Should Congress Be ‘Perp-Walked’?
http://www.investors.com/editorial/editorialcontent.asp?secid=1501&status=article&id=307667278225125
INVESTOR’S BUSINESS DAILY
Posted 9/30/2008
Justice: A federal grand jury in New York is probing the accounting shenanigans at Fannie Mae and Freddie Mac. It’s about time, and we hope it doesn’t end there.
Remember the early 2000s, when companies such as WorldCom, Enron, Tyco and Xerox suddenly and spectacularly were revealed to have been cooking their books?
Remember the glee expressed by Washington politicians, especially Democrats, as they watched CEOs and their underlings get perp-walked out of their buildings and into federal custody?
Enron became the poster child for corporate misdeeds. In the accounting crisis of 2002, CEO Ken Lay was one of the most loathed human beings on Earth. And no, that’s not an exaggeration.
Here was California Attorney General William Lockyer, one of many Democrats on the national scene who gloated at the downfall of the Enron chief and others: “I would love to personally escort Lay to an 8-by-10 cell that he could share with a tattooed dude who says, ‘Hi, my name is Spike, honey.’”
Lockyer wasn’t the only one swept up in a spiteful prosecutorial frenzy. Sure, some of the prosecutions were deserved. But some were excessive, part of a corporate witch hunt.
As noted in a 2003 study by Kathleen Brickey, a Washington University law professor, the Justice Department brought 50 major fraud prosecutions from March 2002 to August 2003. An estimated 90 corporate officers were involved. That’s a lot of prosecutions.
Basically, any major-company CEO whose stock price fell sharply could be sued or charged with a crime and sent to prison.
Democrats wasted no time calling this a “GOP” scandal, tarring any Republican official with charges of corruption for taking so much as a dollar from any of the companies. Never mind that Democrats were also prominent on the political gift lists.
Fanning the fire were news media highlighting Republican ties to scandal-plagued firms while all but ignoring Democrat links.
In the end, what emerged from this atmosphere of retribution and attack was Sarbanes-Oxley the toxic corporate regulatory law that has arguably destroyed more wealth than anything WorldCom, Tyco or Enron ever did.
We mention all this because we now have an opportunity, thanks to the New York grand jury, to probe perhaps the greatest financial crime ever one that dwarfs Enron in size and scope.
Yes, we’re talking Fannie and Freddie.
Here’s how James B. Lockhart III, head of the Office of Federal Housing Enterprise Oversight, described the two companies back in 2006, before the meltdown occurred:
“The result of (Fannie’s and Freddie’s) rapid growth unconstrained by market forces and a weak regulator was years of mismanagement, flagrant earnings manipulation, and systems-and-controls problems. Managements of both companies were forced out, earnings were misstated by an estimated $16 billion, fines exceeding one-half billion dollars were imposed, and remedial costs will exceed $2 billion.”
Yet Congress did nothing.
Fannie and Freddie continued to enjoy a virtual monopoly of the housing finance market, holding nearly half the nation’s $12 trillion in mortgage assets in 2007.
And what happened to Fannie’s and Freddie’s top executives, almost all with deep ties to the Democratic Party?
Did they get perp-walked to prison like WorldCom’s Bernie Ebbers, Tyco’s Dennis Koslowski, Adelphia’s John Rigas, ImClone’s Sam Waksal, or any of the others who did time for corporate misdeeds in the early 2000s?
No.
Jim Johnson, former Walter Mondale aide, became head of Barack Obama’s vice presidential search committee.
Franklin Raines, who headed Fannie from 1998 to 2004, the years of its worst excesses, pocketed nearly $100 million in pay and bonuses from Fannie. He, too, became an adviser to Obama.
Other Fannie-Freddie alumni did equally well. Rep. Rahm Emanuel has been front and center in crafting a new rescue bill.
Ex-Clinton Justice official Jamie Gorelick [remember “The Gorelick Wall” ? ] careens from career catastrophe to catastrophe, and still gets top jobs.
It pays to have ties.
Meanwhile, as previously documented, Rep. Barney Frank and Sen. Chris Dodd repeatedly thwarted reforms. Yet today they stand front-and-center as Democrats try to “fix” a problem they created.
As such, any investigation into Fannie and Freddie must include Congress, both current and past.
There’s lots of evidence that the two mortgage giants had become little more than taxpayer-guaranteed front companies for Democrats, who used them to reward supporters with cheap loans and to provide jobs for out-of-work politicians.
it gets old.
Time for McCain to Name Names By C. Edmund Wright October 01, 2008
http://www.americanthinker.com/2008/10/time_for_mccain_to_name_names.html
I’m sure your brand of self loathinng vocalization helps a whole lot as well.
For a long time I tried to ignore the obvious fascism of the Left. in fact, I have scoffed at others for believing it. But this article is blatant evidence that this country has been taken over by fascism.
What George W. Bush should have done from DAY ONE is thrown those assholes under the bus and refuse them access if they were going to do nothing but trash him with a unending pack of lies.
He should have taken no prisoners with the leftist press and they would have had to have played fairly or be shut out of the White House for eight years.
When you fight back hard, people have to adjust or be run over.
That part is correct, the rest is BS. It is sort of like don't blame, I wasn't here the past eight years.
This article is a good example of corrupt and twisted journalism. Of course, all of us want clean air, clean water and economic success for everyone! However to twist that into condoning the stealth socialism carried out by the Democrats is outrageous at best, more like criminal and irresponsible journalism.
Propaganda. The very definition of it. It'll be getting thick in the next month.
NOTE: Peter Wallison was supposedly on John McCain’s short list to replace Paulson for Treasury Secretary should McCain be elected President in November ‘08.
[1] Watch (or listen) to this C-Span video while you work or surf on line:
http://www.c-spanarchives.org/library/index.php?main_page=product_video_info&products_id=281010-1
Peter Wallison talked about the history and background of Fannie Mae and Freddie Mac. His books include Serving Two Masters, Yet Out of Control: Fannie Mae and Freddie Mac and Privatizing Fannie Mae, Freddie Mac and the Federal Home Loan Banks: Why and How, both by AEI Press. He explained a video clip of Treasury Secretary Paulson from Sunday, September 7, 2008, announcing the federal takeover of Fannie Mae and Freddie Mac.
From the video
Wallison: Congress is part of the problem. They created Fannie and Freddie, keep them alive, protect them from attack, they get benefits from them. Through Fannie Mae Congress can direct money to their friends without appropriating it. Barney Frank was anxious to get a slush fund into his bill, which would give money to community groups to “support housing.” Money would go to the community groups which support particular congressmen. .....
Mr. Wallison is a fellow at the American Enterprise Institute. His previous positions include counsel to President Reagan, general counsel to the Treasury Department, and an aide to Nelson Rockefeller both his time as governor of New York and counsel during his vice presidency, 1972-1976.
*
[2] Serving Two Masters, Yet out of Control: Fannie Mae and Freddie Mac Edited by Peter J. Wallison
http://www.aei.org/research/shadow/books/bookID.233/book_detail.asp
Because two disparate, almost diametrically opposite clients demand loyalty from Fannie Mae and Freddie Mac, these government-sponsored entities must fulfill two ultimately irreconcilable roles.
As publicly owned corporations, they must maximize profitability for their shareholders; yet, as quasi-government agencies, they should use their huge, implicit government subsidies in support of their public missions. In reality, they split the difference as they transfer a large portion of their subsidy to their shareholders.
At the same time, Congress does not routinely scrutinize Fannie and Freddie, despite their enormous size and importance. The two are clearly too large and powerful for the small agency charged by Congress as their watchdog. Thus, while attempting to serve two masters, Fannie and Freddie are literally out of control.
Would privatization solve the dilemma of the dual public and private form? If not, what other options exist? In eleven essays, public figures, economists, and government officials probe the favored positions that have allowed the two agencies to grow to unprecedented size, realize extraordinary profitability, and achieve unparalleled influence over the political process.
*
[3] How Paulson Would Save Fannie Mae, By Peter J. Wallison
http://www.aei.org/publications/pubID.28601/pub_detail.asp
Posted: Friday, September 12, 2008
[excerpt] This after 20 years, during which Fannie and Freddie used government backing to enrich their shareholders, managements, lobbyists, former government officials and Washington insiders; after they rigged the political process with campaign contributions; and after their Congressional supporters resisted every effort at reform until the two companies were on the verge of collapse.
WH reply: “Democratic leaders brazenly encouraged Fannie and Freddie to loosen lending standards and instead encouraged the housing GSEs to play a larger and larger role in the housing market — even while explicitly acknowledging the rising risks. And while the story notes the political contributions of some banks to Republicans, it neglects that political contributions from Fannie Mae and Freddie Mac overwhelmingly supported Democratic officials — in particular the chairmen of the banking committees.”
***************************
WH, then why did you bail them out? Rescuing scorpions, and fatuously expecting that they won’t sting you at the first opportunity.
When you allow yourself to be a punching bag, your supporters see this and get discouraged and demoralized.
Bush could have called Dodd and Frank out and explained to Americans what really happened. But no what does he do. Massive bailout that has breeded more bailouts.
I found this speech that sounds like the New York Times today. I am frightened because of the similarities between the 2
http://www.youtube.com/watch?v=huRgKOlVMZM
You know first they came for Bush and nobody cared, then they came for you and still noboy gave a crap. That kind of thing.
Congressional Performance Approval of Congress Drops to Single Digits Again
We can only count down the days before PravdABDNC is in the tarpits of histoir. Not a word about the Fannie Mae fiasco that makes Enron look like the Girl Scouts.
Pray for W, America and Our Troops
Yep.
Four seven years the Bush administration kept silent in the face of Democrat lies about our military and the war in Iraq, and often even seemed to accept the premises of the lies, instead of standing tall and fighting back.
On another note, Maverick John McCain had a golden opportunity to turn crap into gold by pointing out the culpability of the Democrats in creating the financial melt down. Instead, he joined the Leftist Democrat bandwagon in denouncing "greedy capitalists."
The President is a lamb, and the senator is an ass.
I wonder how much Democrats have stashed in off shore bank accounts? Any FBI guys out there checking on money laundering and irregular money transfers?
For
NY TIMES Link below this:
Paulson led bailout of AIG; saved $20 billion for Goldman Sachs
Sunday, September 28, 2008, 10:47 pm, by cmartenson
http://www.chrismartenson.com/blog/paulson-led-bailout-aig-saved-20-billion-goldman-sachs/5632
This is another astounding article by the very respectable Gretchen Morgenson of the NY Times.
It is astounding because of all that is revealed in the opening paragraphs.
Quote:
Two weeks ago, the nation’s most powerful regulators and bankers huddled in the Lower Manhattan fortress that is the Federal Reserve Bank of New York, desperately trying to stave off disaster.
As the group, led by Treasury Secretary Henry M. Paulson Jr., pondered the collapse of one of America’s oldest investment banks, Lehman Brothers, a more dangerous threat emerged: American International Group, the world’s largest insurer, was teetering. A.I.G. needed billions of dollars to right itself and had suddenly begged for help.
The only Wall Street chief executive participating in the meeting was Lloyd C. Blankfein of Goldman Sachs, Mr. Paulson’s former firm. Mr. Blankfein had particular reason for concern.
Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.
Days later, federal officials, who had let Lehman die and initially balked at tossing a lifeline to A.I.G., ended up bailing out the insurer for $85 billion.
To recap:
Only one Wall Street executive was in the war room, and he was from Goldman Sachs (GS), the firm Paulson headed up before becoming Treasury Secretary.
Lehman, with whom GS did not have an overly large trading position, was allowed to go under.
AIG, with whom GS did have a large position, was handed an $85 billion handout.
Even if you don’t ascribe to all of this as a looting operation (which I do), hopefully you can allow that perhaps this doesn’t look too good from an appearances standpoint.
At this point I think we’re going to have to admit that, at times like these, the revolving door between Wall Street and the Treasury Department is too laden with conflicts of interest to be considered a good idea.
NY Times
September 28, 2008
Behind Insurer’s Crisis, Blind Eye to a Web of Risk
By GRETCHEN MORGENSON
http://www.nytimes.com/2008/09/28/business/28melt.html?_r=2&hp&o&oref=slogin
Are you kidding? They're probably looking for a Republican with dirty hands to go after.
Washington Prowler
Democrat Leaders Played to Lose
By The Prowler Published 9/30/2008 12:50:21 AM
http://www.spectator.org/dsp_article.asp?art_id=13967
Everything from the global warming “CRISIS” - to every other crisis that the left promotes - is specifically designed to manipulate people into acting out of FEAR. When you act out of fear, you will make huge mistakes.
James Simpson, a former White House economist, has just published “Barack Obama & the Strategy of Manufactured Crisis” on AmericanThinker.com.
http://www.americanthinker.com/2008/09/barack_obama_and_the_strategy.html
In the meantime, just remember that it is total BS to say that “BOTH SIDES ARE AT FAULT”.
The live C-Span camera doesn’t lie.
This video shows who is responsible for the FNMA/FreddieMac BS in the first place; connect the dots straight to Obama and his economics advisor, Franklin Raines
Here’s the Youtube Video to send out far and wide http://www.youtube.com/watch?v=_MGT_cSi7Rs
Sunday, September 21, 2008
Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone... Dems Ignored Warnings
http://gatewaypundit.blogspot.com/2008/09/bush-called-for-reform-of-fannie-mae.html
After President Bush committed to spend tens of billions of our dollars to push the car companies, failure onto the next administration, he must be enraged that the NYTimes persists in tarnishing his otherwise-golden legacy.
The fact is that, while Barney Frank and the rest of the Democrats in congress expanded the requirement of Fannie and Freddie to back insolvent mortgages, President Bush did use his bully pulpit to advocate for increased home-ownership among the financially-incapable, particularly those who are Hispanics.
Media Mum on Barney Frank’s Fannie Mae Love Connection
Watch the video here: http://www.businessandmedia.org/printer/2008/20080924145932.aspx
Democratic House Financial Services Committee Chair promoted GSEs while former ‘spouse’ was Fannie Mae executive.
[] By Jeff Poor
Business & Media Institute
9/24/2008 4:00:57 PM
Are journalists playing favorites with some of the key political figures involved with regulatory oversight of U.S. financial markets?
MSNBC’s Chris Matthews launched several vitriolic attacks on the Republican Party on his Sept. 17, 2008, show, suggesting blame for Wall Street problems should be focused in a partisan way. However, he and other media have failed to thoroughly examine the Democratic side of the blame game.
Prominent Democrats ran Fannie Mae, the same government-sponsored enterprise (GSE) that donated campaign cash to top Democrats. And one of Fannie Mae’s main defenders in the House – Rep. Barney Frank, D-Mass., a recipient of more than $40,000 in campaign donations from Fannie since 1989 – was once romantically involved with a Fannie Mae executive.
The media coverage of Frank’s coziness with Fannie Mae and his pro-Fannie Mae stances has been lacking. Of the eight appearances Frank made on the three broadcasts networks between Jan. 1, 2008, and Sept. 21, 2008, none of his comments dealt with the potential conflicts of interest. Only six of the appearances dealt with the economy in general and two of those appearances, including an April 6, 2008 appearance on CBS’s “60 Minutes” were about his opposition to a manned mission to Mars.
Frank has argued that family life “should be fair game for campaign discussion,” wrote the Associated Press on Sept. 2. The comment was in reference to GOP vice presidential nominee Sarah Palin and her pregnant daughter. “They’re the ones that made an issue of her family,” the Massachusetts Democrat said to the AP.
The news media have covered the relationship in the past, but there have been no mentions since 2005, according to Nexis and despite the collapse of Fannie Mae.
The July 3, 1998, Reliable Source column in The Washington Post reported Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his “spouse.” Another Washington Post report said Frank called Moses his “lover” and that the two were “still friends” after the breakup.
Frank was and remains a stalwart defender of Fannie Mae, which is now under FBI investigation along with its sister organization Freddie Mac, American International Group Inc. (NYSE:AIG) and Lehman Brothers (NYSE:LEH) – all recently participants in government bailouts. But Frank has derailed efforts to regulate the institution, as well as denying it posed any financial risk. Frank’s office has been unresponsive to efforts by the Business & Media Institute to comment on these potential conflicts of interest.
While the relationship reportedly ended 10 years ago, Frank was serving on the House Banking Committee the entire 10 years they were together. The committee is the primary House body which along with the Office of Federal Housing Enterprise Oversight (OFHEO) has jurisdiction over the government-sponsored enterprises.
He has served on the committee since becoming a congressman in 1981 and became the ranking Democrat on the committee in 2003. He became chairman of the committee, now called the House Financial Services Committee, in 2007.
Moses was the assistant director for product initiatives at Fannie Mae and had been at the forefront of relaxing lending restrictions at the company for rural customers, according to the Feb. 23, 1998, issue of National Mortgage News (NMN).
“Herb Moses, who helped develop many of Fannie Mae’s affordable housing and home improvement lending programs, has left the mortgage industry,” Darryl Hicks wrote for NMN. “Mr. Moses - whose last day was Feb. 13 - spent the past seven years at Fannie Mae, most recently as director of housing initiatives. Over the course of time, he played an instrumental role in developing the company’s Title One and 203(k) home improvement lending programs.”
Hicks explained in his story how Moses orchestrated a collaborative effort between Fannie Mae and the Department of Agriculture.
“The Dartmouth grad also played a crucial role in brokering a relationship between Fannie Mae and the Department of Agriculture,” Hicks wrote. “This led to the creation of Fannie Mae’s rural housing program where the secondary marketing agency agreed to purchase small farm loans insured through the department.”
While Moses served at Fannie Mae and was Frank’s partner, Frank was actively working to support GSEs, according to several news outlets.
In 1991, Frank and former Rep. Joe Kennedy, D-Mass., lobbied for Fannie to soften rules on multi-family home mortgages although those dwellings showed a default rate twice that of single-family homes, according to the Nov. 22, 1991, Boston Globe.
BusinessWeek reported in its Nov. 14, 1994, issue that Fannie Mae called on Frank to exert his influence against a Housing & Urban Development proposal that would force the GSE to focus on minority and low-income buyers and police bias by lenders regardless of their location. Fannie Mae opposed HUD on the issue because it claimed doing so would “ignore the urban middle class.”
Moses left Fannie in 1998 to start his own pottery business. National Mortgage News called Moses a “mortgage guru” and said he developed “many of Fannie Mae’s affordable housing and home improvement lending programs. Moses ended his relationship with Frank just months after he left Fannie.
Even after the relationship ended, however, Frank was a staunch defender of Fannie Mae even as other experts suggested there were serious problems building in Fannie Mae and Freddie Mac.
According to an article by Kathleen Day in the Oct. 8, 2003, Washington Post, Frank opposed giving the Bush administration the right to approve or disapprove business activities that “could pose risk to the taxpayers.” He told the Post he worried the Treasury Department “would sacrifice activities that are good for consumers in the name of lowering the companies’ market risks.”
Just a month before, Frank had aggressively thwarted reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Mac’s problems were “exaggerated,” a gross miscalculation some five years later with costs estimated to be in the hundreds of billions.
“These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis,” Frank said to the Times. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Frank has also reaped campaign contribution benefits from Fannie Mae and its counterpart Freddie Mac. According a front page story in the Sept. 19, 2008, Investor’s Business Daily by Terry Jones, Frank has received $40,100 in campaign cash over the past two decades from the GSEs.
Frank is ranked 16th on a list that includes both houses of Congress and fifth among his colleagues in the House. According to data from the Center for Responsive Politics’ OpenSecrets.org, political action committees financed by both Freddie and Fannie have contributed $3,017,797 to members of Congress since 1989. And according to the July 16 issue of Politico, the two entities have spent a whopping $200 million to buy influence – including not only campaign donations to members of Congress, but also presidential campaigns and lobbying efforts.
In a July 23 op-ed, Wall Street Journal Editorial Page Editor Paul Gigot put the blame for the GSEs’ collapse firmly on the members of the liberal establishment who took money from Freddie and Fannie. “Fan and Fred also couldn’t prosper for as long as they have without the support of the political left... This includes Mr. Frank and Sen. Chuck Schumer (D., N.Y.) on Capitol Hill, as well as Mr. [Paul] Krugman and the Washington Post’s Steven Pearlstein in the press.”
Frank was asked by CNN’s John Roberts on the Sept. 22, 2008 “American Morning” about this and his opposition to reform Fannie Mae and Freddie Mac. Originally, he claimed he didn’t think the two GSEs were facing any problems when the issue first surfaced in 2003. He instead blamed the Republican-controlled Congress for their ultimate fall, failing to mention his friendly relationship with Fannie Mae and the contributions it had made to his campaign over the years.
“Yes, I did not think we were facing a crisis in 2003, but that didn’t mean we didn’t have to have reform,” an animated Frank said when confronted with the question. “Here’s the deal, the Republicans controlled Congress from 1995 through 2006. They did zero to reform Fannie Mae and Freddie Mac.”
However, on Sept. 17, 2008, former Bush administration Deputy Chief of Staff Karl Rove elaborated on the Bush administration’s efforts to curb abuses at the two GSEs in 2003. He told Fox News’ “Hannity & Colmes” that Frank was among the most aggressive opponents of White House attempts to reform Fannie Mae and Freddie Mac.
“All of this bad stuff on Wall Street happened because people got greedy and the greed started at Fannie Mae and Freddie Mac,” Rove said. “And I know this because five years ago, the administration was alerted by the regulator, James Lockhart, that there was insufficient authority and that these institutions – particularly Fannie – were out of control.”
Rove said the Bush administration’s efforts to reform Fannie and Freddie were opposed by congressional Democrats – specifically Frank and Senate Banking Committee Chairman Christopher Dodd, D-Conn.
“And I got to tell you, for five years, I was part of an effort at the White House to fight this and our biggest opponents on the Hill who blocked this every step of the way were people like Chris Dodd and Barney Frank. And Fannie and Freddie are the $200 billion contagion at the center of this.”
Frank has been quick to blame deregulation for some of the problems in the financial environment, as he did on Bloomberg television’s Sept. 19 “Political Capital with Al Hunt.” However, as earmark crusader Rep. Jeff Flake, R-Ariz. pointed out – it’s not deregulation, but it was the structure of Fannie Mae and Freddie Mac that had been guarded by Frank and other members of Congress.
“Some people point at deregulation,” Flake said to the Business & Media Institute on Sept. 23. “It’s not deregulation at all. We have for far too long shielded Fannie and Freddie for example, with the implicit and now explicit guarantee. I just found it humorous.”
Flake specifically named Frank as one of the members behind letting allegations of transgressions at the two GSEs for slipping by without oversight from Congress.
“Just a few minutes ago, a reporter was asking me about this and saying, ‘Barney Frank is saying that’s just – because there were allegations,’ correct ones – ‘that Fannie and Freddie have been the playground for politicians for years and now the other side is saying Fannie and Freddie were just a small part of this and this goes far beyond.’ It does, but these same people a couple of weeks ago said, ‘You got to bail out Fannie and Freddie because they touch everything out there. They touch nearly every mortgage out there.’ And because of that explicit guarantee – that we would come and bail them out, nobody has been subject to market discipline.”
Frank claims differently, according to a letter to the editor published in the Sept. 17, 2008 Wall Street Journal. Frank noted that in 2005 he supported regulating compensation for Fannie and Freddie executives.
“In fact, my reform efforts had begun when we were still in the minority. In 2005, I joined Michael Oxley, then chairman of the House Financial Services Committee, in supporting legislation to increase the regulation of Fannie and Freddie that passed the House by a vote of 330 to 90,” Frank wrote. “When former Congressman Richard Baker proposed to examine the compensation structure of Fannie and Freddie’s top executives, and some members of Congress tried to block him, I explicitly spoke out in support of his right to do that and our right, as a Congress, to examine the GSE’s compensation practices.”
The red flags were raised long before the government bailed out the two GSEs in August 2008. The first egregious scandal involving Fannie Mae occurred in 2004. A 2004 Wall Street Journal editorial was first to point out claims in an OFHEO report that showed accounting malpractices by the GSE.
“For years, mortgage giant Fannie Mae has produced smoothly growing earnings. And for years, observers have wondered how Fannie could manage its inherently risky portfolio without a whiff of volatility, the Oct. 4, 2004, editorial, “Fannie Mae Enron?” said.
“Now, thanks to Fannie’s regulator, we know the answer. The company was cooking the books. Big time.”
See Related Sidebar: Networks, Once Silent on Fannie Mae, Blame Capitalism for Debacle
This is what I wanted to hear from McCain in the debates when Barky was on the topic. But no, not fair to fight back. Gotta reach across the aisle, etc. Gotta lose.
Bush permitted this sort of blatant distortion for 8 years and it was directly responsible for a great deal of damage to this nation and to the American public. Why in the world would he pick this particular time to hold the MSM responsible for what it reports? I didn’t believe anyone could be as dumb as Bush Sr., but I stand corrected.
Funny...I see Iraq and our military as the centerpiece of Bush's 8 years. I have seen a tireless campaign to move forward with Iraq and the WOT despite opposition.
Since 9/11 I have not seen ONE speech where Bush did NOT hail the Iraqi effort and highly praise our military.
I would call him far from "silent" on these issues.
With the Obama Administration in place, our FBI will be like foxes guarding the hen house. Chicago Politics comes to Washington DC.
What does that have to do with Bush's lack of responses from the NYT & liberals who railed on him for 8 years?
A better response would be to wonder just how fast this country is headed toward fascism when the press can print obscene lies without anybody calling them on it in their own profession.
Whereas said fascism would have grinded to a halt had the President and the political party he supposedly heads would have fought back against these lies.
You know first they came for Bush and nobody cared, then they came for you and still noboy gave a crap. That kind of thing.
I'm not a public official though. But if anyone comes for me, they'll be met with a size 14 Jordan sneaker up their behind.
Bump to the top!
The Leftist Democrat media refused to broadcast his speeches, unless he stumbled with his words (as opposed to eight years of a perfect Clinton soundbite on every news broadcast). That is not his fault. But if he wished, he could have gone around the news media the way Reagan did. He could have gone directly to the American people, and he could have marshaled every Republican politician in defense of the military, and in condemning the NYTimes when it slandered our military repeatedly. He did not.
He did the right thing most of the time when it came to his foreign policy decisions, although putting the State Department in charge of Iraq was a HUGE mistake. What sis did not do was to FORCEFULLY counter the Democrat lies about the war and about our military. The office demands COMMUNICATION with the American people. When it comes to communication, W gets an F-.
Yes sir, jimmy carter the second and his golden legacy.
ROFLOL
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.