From the SF Chronicle:
"The average American listening to all the news of bank failures, and Fannie Mae and Freddie Mac (who?) being taken over by the government, and now a "bail-out" of large, privately owned and well known companies, is at first bewildered, and then angry. The average American should be furious.
But with whom should Americans be furious? That seems to be the big question as political fingers are pointing in every direction. Was it greedy CEOapos;s with their "golden parachutes?" Was it the Democrats? Was it the Republicans? Was it Wall Street? (Who, exactly IS "Wall Street?") The simple answer is that it is all of the above.
Treasury Secretary Henry Paulson, Jr., and Federal Reserve Chairman Ben S. Bernanke were on Capital Hill taking a verbal beating from some of the very people who should not be asking the questions, but answering them and answering those questions under oath.
Senator Chris Dodd, (D-Conn.) and Congressman Barney Frank, (D-Mass.) are the first two who should be grilled, not by fellow politicians, but by an independent and hopefully very clever, angry, and mean attorney hired by the American people. No one from the present Justice Department need apply. Both should be asked how much money they have taken from lobbyists hired by the CEOapos;s of Freddie Mac and Fannie Mae. Since that is public record, they should then be asked what Fannie and Freddie got in return for that money. Barney Frank should be questioned about his House Bill, H.R. 3838, that is clearly designed to keep Fannie and Freddie afloat as long as possible despite all the signs that there was serious trouble ahead. But all his bill did was make the hole bigger in the side of the Titanic. Basically all H. R. 3838 did was: "To temporarily increase the portfolio caps applicable to Freddie Mac and Fannie Mae, to provide the necessary financing to curb foreclosures by facilitating the refinancing of at-risk sub prime borrowers into safe, affordable loans, and for other purposes."
Barney Frank and his counterpart in the Senate, Chuck Schumer, (D-N.Y.) did everything they could to delay and cover-up the outright fraud and book-cooking that was going on within Freddie and Fannie. As far back as 2003, Freddie and Fannie were $9 billion dollars in debt because of bad loans that continued to be accepted on a daily basis. Pressure from liberals in Congress to continue giving out bad loans was relentless and for years it continued with CEOapos;s, who happen to be friends of Dodd, Frank, Schumer, and Clinton, leaving with millions in their bank accounts as the companies they ran went under.
The truth is that this financial disaster for the American taxpayer didnapos;t begin under George Bush, or Bill Clinton, or George Herbert Walker Bush, or Ronald Reagan. It started under Jimmy Carter. It started with the passing of The Community Reinvestment Act in 1977. Basically, this act pushed local community banks and lenders, to "bend" the rules a little and give loans to low-income families. Like many liberal schemes, it seemed like a good idea at the time. There was a provision that protected the nervous lender in the clause that stated that loans should be given "in a safe and sound manner." This gave the bank some leeway and choice in the loans that were given out.
Under Bill Clinton, The Community Reinvestment Act was revised. Basically, the revision started to put pressure on lenders to take more financial risks. It was felt that lenders were not being "fair" to minorities and the poor who only wanted to share in the American dream of owning their own home. Janet Reno began to outwardly threaten banks and mortgage lenders with prosecution if home loans were not approved for those who wanted to purchase homes that, in truth, they could not afford. Fearing federal retribution, loans started being approved for people who had no down-payment, no jobs, no collateral, and absolutely no hope of ever being able to meet any mortgage payment after the grace period of low interest ran out. Then, the greed took over. Banks would "bundle" up loans, good and bad, and sell them to Fannie Mae and Freddie Mac, making all their money up front for loans they knew would default eventually. As these loans did default, in larger and larger numbers, even Fannie and Freddie could no longer stand up under the hemorrhage of money loss. Wall Street panicked and so did the federal government.
Were there warning signs that a disaster was looming? Of course, there were. But there was money to be made and politicians and CEOapos;s alike were not about to give up the gravy train of money being crammed in their pockets. The CEOapos;s of Freddie and Fannie would hire lobbyists to slip money into the pockets of Senator Chris Dodd, (D-Conn.), chairman of the Senate banking committee, who was supposed to be overseeing the banking industry, to the tune of $133,900 since 1989. Barack Obama was number two at the trough with over $120,000 which was no small feat since he has only been in the Senate for three years. Dodd and Obama were closely followed by the last Democratic nominee, John Kerry, (D-Mass.) and then Senator Hillary Clinton, (D-N.Y.)
What were these lobbyists buying for the millions they sprinkled around the Senate and House of Representatives? They were buying a blind eye. They were buying little or no oversight into the juggernaut that has finally crashed on the heads of the American taxpayer. CEOapos;s got rich, politicians got rich and they got votes, being able to tell minorities and the poor, "See what we are doing for you?" For years, the red flags were stuffed under the desk and ignored.
Early in his administration, George Bush sounded an alarm over the small amount of working capital Fannie and Freddie had on hand. He urged them to sell more shares to increase their reserve in funding and put them on a more stable ground. He urged them to be more selective in the loans they bought. This suggestion was declined because the current stockholders would not make as much profit. Franklin Raines, the Fannie Mae CEO from 1999 to 2004, decided to retire early, taking millions with him, under a cloud of accusations that he had cooked the books to make it appear the company was making money instead of going head-long into debt. Another player in this financial kabuki dance is Jamie Gorelick. That name should ring a bell with every American. She seems to surface right at the heart of every American disaster in the last 15 years. Ms. Gorelick was vice-chair of Fannie Mae from 1997 to 2003. Like all the others, she left with millions in her pocket while declaring that Fannie Mae "is among the handful of top-quality institutions."
The next year it was found that Fannie was $9 billion dollars in the red. Oddly, this $9 billion had been overlooked in the books Ms. Gorelick and Mr. Raines kept. Letapos;s put Mr. Raines and Ms. Gorelick on the stand. The American people deserve to hear how much they gave lobbyists to pass on to their friends in Congress to keep the blinders on. That number is a staggering $16.2 million dollars since 1997. That amount bought very large blinders. And, it bought time. It bought time for the likes of Raines and Gorelick to make their millions and bow out before the bottom fell out.
Republican nominee John McCain raised the alarm two years ago but his plan for more oversight was killed in the Democrat-controlled committee. Over 20-year span, McCain took $20,000 but this did not stop him from voicing his concerns. The problem was that Democrats didnapos;t want to hear about it. President Bushapos;s warnings were also ignored. Should Bush have done more? Yes he should have. Unfortunately, Bush was distracted by the 9/11 attack and wars in Afghanistan and Iraq. So now, nearly every hour Americans watch as a pompous Chris Dodd or Barney Frank struts to a microphone to declare the "failed economic policies of the Bush administration are responsible for this mess." No, Senator, he is not. YOU and your greedy friends are responsible. It took three decades to reach the point of no return and some were there with their hands out nearly all of those years. The Federal Bureau of Investigation is launching (what I hope will be) a full investigation into all of this. This investigation will abruptly end should Barack Obama win in November. The last thing Democrats want is the American people learning how complicit so many of them are in the illegal practice at Fannie and Freddie that led to the taxpayers bearing the brunt of the their unbridled greed. While politicians want oversight over the "bail-out," there has been little outcry for an investigation into how all this evolved.
Itapos;s time for Americans to go to their windows and throw them open and yell, "We are mad as hell and we arenapos;t going to take it anymore" Then, in November, vote the lot of them out of office"
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