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Meltdown!

After you read the e-mail I received "Subject: READ this and weep" below, click on the New York Times link (the first link) below to find out what that bastion of liberal media already had to say about this in 1999. On Clinton's watch, no less! The problem goes back even farther to Carter, who started the ball rolling during his disastrous term in office. Clinton then picked it up during his disastrous terms in office and it was Clinton's AG Janet Reno who told the banks to make these ridiculous loans or get sued by the government. The rest of the links just goes to show you that you can't be the government and mess with private industry, or whatever the hell you want to call Fannie and Freddie, or any other private enterprise for that matter. Now the Pelosi Dems want to put $700,000,000,000 (pronounced with a "B") of your hard earned dollars back into the very same system they created, built and destroyed and are also looking for anybody and everybody to blame it on, except themselves. This is not "responsibility" it is just plain "stupidity" and, by the way, did you know that that is the term all politicians use to describe "you" the American Voter! Vote the bastards out of office and pull their ridiculous self-imposed bennies. And while you are at it, don't vote for Obama. Why? Because he is up to his eyeballs in debt to Fannie and Freddie for their contributions (investigation anybody?) to his campaign. All you are going to get is "more of the same"! "Disaster" about sums it up nicely. And the CEOs of these companies (thanks to the Dems who put them in control) all walked with "millions" in bonuses for perpetrating the meltdowns??? This is criminal and heads should roll; i.e., politicians responsible for this (Frank and Dodd for starters) and the corrupt CEOs who collected millions while the market failed. I thought that some very hard lessons were learned after Enron, but the stupidity of our liberal politicians came shining through once again!

Little Man

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Subject: READ this and weep

Greenspan's Warning

Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing, potential, systemic risk down the road''. ``We are placing the total financial system of the future at a substantial risk.''

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

Different World

IF that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.

That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''

Mounds of Materials

Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.

But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.

Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.

Clinton, the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than $75,000 from the two enterprises and their employees. The private profit found its way back to the senators who killed the fix.

There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.

Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.