Media Recast The Crisis Villains

IBD Editorials ^ | June 21, 2011 | Staff

[Kaslin]

Subprime Scandal: With the housing market crashing again, the truth is finally dawning on some media elite that Washington played a bigger role in the mortgage mess than first told.

A new book, "Reckless Endangerment," zeroes in on the corrupt partnership between Fannie Mae and Beltway insiders — who used the federally chartered firm as a giant slush fund to enrich themselves while pushing liberal housing schemes.

This may be nothing new to our readers, who have read as much on these pages from the first days of the crisis. What's surprising here is the author — a New York Times business editor. And some of her colleagues are applauding her "courage" in breaking from the tired blame-everything-on-Wall Street narrative.

Refreshingly, the lead villain in Gretchen Morgenson's book isn't Lloyd Blankfein or some other "fat cat" banker. It's ex-Fannie chairman Jim Johnson, one of many Clinton cronies who helped set the stage for the financial disaster back in the 1990s.

She blames Johnson and Fannie for fanning the easy credit flames by underwriting home loans for low-income minorities. But this is still only half the story.

The Clinton White House and Democrat Congress were obsessed with closing the racial mortgage gap, and they enlisted Fannie and its brother, Freddie Mac, in their reckless social crusade.

Fannie and Freddie didn't co-opt regulators, as the book argues. It was the other way around. Their chief regulator — HUD — pressured them to target credit-poor blacks and Hispanics with subprime loans. If they didn't meet HUD's increasing quotas, they were threatened with fines and stiffer oversight.

[NohSpinZone]

What about Barney Frank? Chris Dodd? ACORN? Billy Jeff himself? The worst instance of “liberal feel-good” policy gone amok that I can recall off the top of my head.

[MadMax, the Grinning Reaper]

Raines got about $90 MILLION in bonuses during his rule at Fannie Mae. Gorelick was low-balled at about $4 MILLION. The rest got more than $10 MILLION each as bonuses while the whole sysem sank into a financial cesspool.

Yep, Bill Clinton certainly looked out for the “little guy”. Maybe he could put a few of the up as his New York fancy house in Westchester County. He could move Hillary’s fat ass out for these homeless.