Barack Obama has been on the campaign trail telling everyone that the failed policies of George Bush and his the Republicans are the reason for the economic problems and the financial meltdown of major investment companies. Nancy Pelosi is calling for an investigation into the crisis and she wants administration officials questioned to see why this happened and see if new regulation is needed. Pelosi is trying to make political hay with this but it will be a welcomed investigation because the Democrats are responsible for this. When she digs into which members of Congress are in the hip pockets of these companies she will see some familiar names at the top of the lists; names like Barack Obama, Christopher Dodd, and Hillary Clinton.
House Speaker Nancy Pelosi has ordered a broad, swift investigation of Wall Street and will demand testimony from Bush administration officials and captains of finance, congressional officials said.
House Democrats plan an aggressive look at the administration’s role in this weekend’s meltdown, and explore further regulation and government structures that would be taken up under the new president. Politico
Let’s be clear here. Nancy Pelosi wants Henry Waxman and Barney Frank to investigate this matter. She is trying to pin these problems on the Bush administration but the truth is the Democrats have caused this problem. Fannie Mae and Freddie Mac were run by Clinton cronies who received millions of dollars from the organizations. Democrats were in bed with these companies and refused to listen to George Bush when, in 2003, he “recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.” [New York Times]
The same Times article states:
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.
”There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,” Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.
The administration recognized the problems in this industry and tried to take action to keep problems from arising. This story is from 11 September 2003 which indicates that the President was on top of this more than five years ago. Instead of working with President Bush to make this happen and provide better oversight, the issue was OPPOSED by Congressional Democrats.
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.
”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. [emphasis mine]
Let us take a look at this. Congressional Democrats opposed the plan and they were worried that it would reduce the commitment to low income, affordable housing. The problem is, this morphed into no income you can have a house anyway. The Democrats came up with plans that allowed people to buy houses they could not afford and this is why there are so many foreclosures. Add the greed of companies who wanted to make a buck (and were afraid of penalties if they denied loans) and you have a recipe for disaster.
Look at who said that the companies were not facing any kind of financial crisis. Barney Frank, the same guy Pelosi wants to look into this mess (I guess it would be wrong to say Frank will get to the bottom of it). This guy could not find his ass if his hands were in his back pockets and she wants him to investigate. I guess we know how that financial crisis issue turned out.
The last part discusses the whole poor family/affordable housing issue. I have no issue with people buying a house. I think that is a great thing to do but people should never buy more than they can afford. Democrats were so worried about helping out poor people that they failed to enact regulation (that Pelosi now calls for) that would have helped keep this meltdown from happening.
Nancy Pelosi was asked today if Democrats have any responsibility in this mess and she quickly answered “NO.” The mantra of the left is “don’t blame us for this.” Well the fact of the matter is, it is all their faults. They have been using Fannie Mae and Freddie Mac as ATM machines for their friends for a long time and they have been reaping the benefits of large cash donations from those very friends who controlled the companies. The Democrats opposed tighter control because they wanted to allow anyone, credit worthy or not, to buy a house and they wanted the money to flow to them and their friends.
Keep this in mind when Barack Obama (the second biggest recipient of Lehman Brothers and Fannie/Freddie money1) tells you that it is failed Republican policies that led to this. It was the Democrats who caused this problem because they refused to work with President Bush to get it solved. The President saw it and tried to put a plan in place and the Democrats decided that they would rather keep their friends and themselves rolling in dough rather than address the problem.
Now, they want you to put them in charge of everything.
Nancy Pelosi is a liar. She and her Democrats bear most of the responsibility for this. They are all squawking now and they are saying the same things over and over. They are all blaming this on the Republicans because if they say it often enough, people will believe it. They are trying to cover their tracks because they are neck deep in this mess. This could, and should, cost them the election.
Here is an idea. Instead of wasting time and money investigating this why doesn’t the Speaker launch a full scale investigation into the tax evasion of Charlie Rangel. There is some real corruption to handle. I already solved the who caused the financial problem mystery (and saved the taxpayer millions of dollars) so let’s get busy and investigate Rangel. Anyone want to bet that this jackass criminal gets reelected?
1 The figures are from 1989. John McCain has received $117,500 ($13,055/year) from Lehman Brothers since then. Barack Obama has been in the Senate for just under four years and he has received $395,600 ($98,900/year).
