The Road To Hell Is Paved With Good Intentions

[Shady]

New Agency Proposed to Oversee Freddie Mac and Fannie Mae

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.

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.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

The New York Times

And what did the Democrats have to say, you may be asking?

''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, Democratof North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

And they proceeded to block the legislation. All under the "good intentions" of affordable housing. Well, we can all see for ourselves, what the good intentions of Democrats/liberals, have done to the economy. Never forget.

[GostHacked]

And McCain thinks the economy is sound ... and oh .. he is a Republican.

[Drea]

''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

That is correct. The more people panic the worse the situation will be. Why do you think Bush told everyone to "go shopping" right after 911? To keep the economy humming of course.

We have investments in AIG but are not selling them because it would be stupid to pull out at a loss. Better to just let the money sit there forever than lose it.

Of course the democrats are to blame. They got elected in 2000 remember? The last eight years of Republicans is a figment of some Liberal's imagination -- the dems have actually been in power the whole time! /sarcasm

Goodness the silliness is simply astounding!

It's panic that will cause the decline, not democrats.

Shady... love your sig line. Proves that looks are not everything -- unless you are S. Palin or B. Obama or B. Spears. LOL

[eyeball]

Accountability and transparency for corporations? Bring it on...I dare you.

In the meantime what about the sink-holes that have formed along the road to hell since September 11, 2003, what were they paved over with? How about the good intentions of stimulating a war-torn over-extended economy? The Republican administration provided the banking sector with the nod and wink it needed to deliberatly inflate a housing bubble to produce the 'equity' required for a binge of mass-consumption.

Republicans used gasoline to put out the fire they started and now its time to blame someone else for the blowback. We've been down this worn out old road many many times.

[Shady]

Of course the democrats are to blame.

Yep. It's a classic case of the law of unintended consequences.

[Pliny]

Fannie Mae and Freddie Mac are government backed mortgage lenders similar to the CMHC in Canada.

Fannie Mae was started in 1938 by then Democratic President Franklin Delano Roosevelt and Freddie Mac was instituted in the late sixties by LBJ, I believe.

They were both based upon the "good intentions" of government to make housing affordable for Americans.

Like most government programs the taxpayer winds up bailing them out. I think the Government should let them fail just like any private enterprise would without taxpayer money.

[Shady]

Fannie Mae and Freddie Mac are government backed mortgage lenders similar to the CMHC in Canada.

Fannie Mae was started in 1938 by then Democratic President Franklin Delano Roosevelt and Freddie Mac was instituted in the late sixties by LBJ, I believe.

They were both based upon the "good intentions" of government to make housing affordable for Americans.

Like most government programs the taxpayer winds up bailing them out. I think the Government should let them fail just like any private enterprise would without taxpayer money.

Well said, and completely right, except in this case, the Government can't afford to let them fail. It would cause too many serious problems.

Now, on to more of the Democrat's unintended consquences/corruption.

The Real Culprits In This Meltdown

The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory."

Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standardsto make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.

And there's more! :angry:

As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.

Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.

Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.

In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes in its accounting procedures and ways of managing risk.

Investor's Business Daily

And there's even more! :angry: This is an exerpt from Robert Reich on MSNBC, Clinton's former Labor Secretary:

REICH: In the latter years of the Clinton administration -- when I was not there any longer, I should add -- there was an attempt by Alan Greenspan and Bob Rubin and a few others to deregulate financial markets, and they did. They split commercial banking off from investment banking. And many people say, "Well, that was the beginning of the problem," and then, of course, in 2003-2004, Alan Greenspan reduced short-term interest rates to the point where every single bank wanted to lend money. I mean, if you could stand up straight you could get a bank loan because there was so much pressure to get that money out the door. Money was so cheap. So, yes, there is some responsibility on Democrats, some responsibility on Alan Greenspan and the Fed.

[Sulaco]

Let's not forget, however, that Bush stronlgy supported this kind of "financial outreach". Prior to 9/11, Bush's vision was at times referred to as seeking an "ownership society". The idea was that as more minorities and others in the lower strata become owners, neighbouthoods will be lfted out of misery. This theory involves some sociological alchemy but is not the stupidest idea in the wortld given some worthwhile studies. Until Bush was elected linerrals were enthusiastic. Once Busah won in '00 liberals started undermining the idea as naive - but by then they already hated Bush.

Point is that to put this on the dems is ridiculous. the responsibility is shared. Heck I thought the idea was cool beans and I identify as a conservative. I was - erm - wrong in expecting the application to be worthwhile.

Edited September 17, 2008 by Sulaco

[Shady]

Point is that to put this on the dems is ridiculous.

Nope. Not ridiculous, but totally and completely appropriate. Especially when considering the New York Times link I referenced. The Bush Administration proposed new oversight of Freddie Mac and Fannie Mae 3 YEARS AGO!. But the Dems blocked it, and at the same time championed both institutions, as well as pseudo-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.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing'' Mr. Watt said

Edited September 17, 2008 by Shady

[Shady]

Not only that, but John McCain was ahead of the issue, and spoke to the Senate on the seriousness of this problem.

From 2005

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation

Link

Again, from 2005!.

[Sulaco]

Not only that, but John McCain was ahead of the issue, and spoke to the Senate on the seriousness of this problem.

From 2005

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation

Link

Again, from 2005!.

And he was talking to whom? A Democratic Senate - but with a Republican House right there, and a Republican president. Look, isofar as any party can be said to be complicit with "exuberent" investors - both parties are obviously complicit.

[Shady]

And he was talking to whom? A Democratic Senate - but with a Republican House right there, and a Republican president.

Yes, but the Republican's didn't block the legislation which recognized the problem. Democrats not only blocked the legislation, but refused to even acknowledge any problem with Mac and Mae. It's quite simple. The blame cannot be spread equally amoung both parties. One party is primarily responsible. And there is no logical and intellectually honest way of debating it. As the saying goes, the science is settled. The Democrats have seriously damaged the American economy due to the unintended consequences of their "good intentions".

[Sulaco]

Yes, but the Republican's didn't block the legislation which recognized the problem. Democrats not only blocked the legislation, but refused to even acknowledge any problem with Mac and Mae. It's quite simple. The blame cannot be spread equally amoung both parties. One party is primarily responsible. And there is no logical and intellectually honest way of debating it. As the saying goes, the science is settled. The Democrats have seriously damaged the American economy due to the unintended consequences of their "good intentions".

Again - you ignore Bush's hand in promoting the same approach to lending. You can point to McCain as a lone voice bucking the trend but that doesn't change the fact that the trend, initiated by Clinton, was ideologically and philosophically supported by the Bush administration.

[Pliny]

Yes, but the Republican's didn't block the legislation which recognized the problem. Democrats not only blocked the legislation, but refused to even acknowledge any problem with Mac and Mae. It's quite simple. The blame cannot be spread equally amoung both parties. One party is primarily responsible. And there is no logical and intellectually honest way of debating it. As the saying goes, the science is settled. The Democrats have seriously damaged the American economy due to the unintended consequences of their "good intentions".

It is precisely the "good intentions" of politicians without knowledge of Economics only the pressing need for social welfare.

Democrats would never spot an economic problem and will continue with their good intentions come hell or high water. Republican politicians, while a little more pragmatic and "conservative" will make the same mistakes because of their lack of Economic knowledge.

Barack Obama I believe lacks any understanding of economics and the only change he will bring to America is more "good intentions". McCain is a maverick republican. He spotted the problem in 2005 and correctly predicted what would happen. The loose money policies, the low interest rates, the easy credit. All "feel good" policies of the Federal Reserve which has wreaked havoc. But then again the Federal Reserve exists out of the "good intentions" of government. It is the instrument that enables them to govern with such "good intentions".

I think McCain was wrong to say that America's economic foundation was sound. It won't be until control of the economy is returned to the people. I think many Americans understand this but I believe many are dependent upon the good intentions of government and would like to continue on that well paved road to their destination. Canadians and Europeans are hopelessly ignorant of economics and have many good intentions for society - if only the right wing extremists weren't in their way perfection could be achieved.

[PoliticalCitizen]

Not only that, but John McCain was ahead of the issue, and spoke to the Senate on the seriousness of this problem.

From 2005

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation

Link

Again, from 2005!.

I don't know if I'm the only one who finds your

USE OF BIG BOLD FONTS EXTREMELY ANNOYING !!!

Is it not better to talk in a normal tone of voice?

[Shady]

Again - you ignore Bush's hand in promoting the same approach to lending. You can point to McCain as a lone voice bucking the trend but that doesn't change the fact that the trend, initiated by Clinton, was ideologically and philosophically supported by the Bush administration.

No, it wasn't supported by the Bush Administration. As I've already posted, the Bush Administration sought to make changes back in 2005, and Republicans in Congress proposed changes back in 1997. If by support, you mean championing the idea of home ownership, of course, everyone is in favour of more people owning their own homes. However, you don't rip to threads the economy under the gise of affordable housing to accomplish it. Which is exactly what the Democrats have done. Again, it's the unintended consequences of good intentions.

I don't know if I'm the only one who finds your

USE OF BIG BOLD FONTS EXTREMELY ANNOYING !!!

Is it not better to talk in a normal tone of voice?

No. The only thing that's annoying you, is the liberal complicity in the current financial problems.

In fact, that leads me to post some new information.

House Banking Chief Wants Freddie Mac Bond Inquiry

The chairman of the House Banking Committee called today for an investigation into the investment practices of Freddie Mac, the Congressional-chartered, shareholder-owned mortgage finance company, saying it had abused the preferential borrowing terms it enjoys through its ties to the Government

The New York Times

And when was this proposed? 1997!

And who proposed this? Representative Jim Leach, Republican of Iowa

And who rejected this? The Democrats in Congress.

[Shady]

Barack Obama's Fannie Mae/Freddie Mac Connection

A group called the Center for Responsive Politics keeps track of which politicians get Fannie and Freddie political contributions. The top three U.S. senators getting big Fannie and Freddie political bucks were Democrats and No. 2 is Sen. Barack Obama.

Now remember, he's only been in the Senate four years, but he still managed to grab the No. 2 spot ahead of John Kerry — decades in the Senate — and Chris Dodd, who is chairman of the Senate Banking Committee

The Clinton administration's White House Budget Director Franklin Raines ran Fannie and collected $50 million. Jamie Gorelick — Clinton Justice Department official — worked for Fannie and took home $26 million. Big Democrat Jim Johnson, recently on Obama's VP search committee, has hauled in millions from his Fannie Mae CEO job

Link

[Shady]

Brit Hume hammers Democrats for Fannie/Freddie mess. And is a great summary of the important events from 2001 to the present economic and financial problems.

YouTube

My favourite part of the video, is watching Democrat Barney Frank, say the following"

"The more people, in my judgement exaggerate the threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the treasury, which I do not see. I think we see entities that are fundamentally sound financially, then the less, I think we see, in terms of affordable housing."

How is this joke of a bureaucrat, able to show his face in public? And why is this joke of a bureaucrat, allowed anywhere near the proposed solutions to this problem?