Tuesday, September 23, 2008

It's always 'them'

No matter what issue, no matter what crisis, there is one thing you can count on. Politicians blaming other politicians. The latest example of finger pointing is our current financial predicament. I was watching C-SPAN the other day, yea I know, I am a political geek, listening to the Democrats in Congress rail against the lack of oversight and pointing their fingers squarely at the Republicans and the administration for the mess.

Chris Dodd, Democrat-CT, chairman of the Senate Banking Committee, sat in his leather chair and with a straight face lectured us on how the Fannie Mae and Freddie Mac's failure was someone else's fault. Okay, Mr Dodd, lets step into the way-back machine and take a look at how this crisis could have been averted. Bloomberg.com has an excellent piece on this.
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,'' he said. ``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.
So you would think with such dire warnings like the one issued by Greenspan, the Senate would set aside their partisan politics and act to avert a financial crisis, right?

Not a chance. This is Washington, a place where lobbyists and special interests always get their say, no matter who is in office. They did not want new regulations to tighten up the lending rules, and in the end, they won. Democrats and a handful of Republicans killed this legislation without it ever making it to the floor. Now we the taxpayers are left holding the bag and writing the check to bail them out.

So which Congressmen were on the receiving end of all that Fannie Mae/Freddie Mac money? If you guessed it's the same people who are 'outraged' at our current financial crisis, you get a gold star. Here they are, the top 5 recipients of Fannie Mae money.

Chris Dodd - Democrat-CT $133,900
John Kerry - Democrat-MA $111,000
Barack Obama - Democrat- IL $105,849
Hillary Clintion -Democrat -NY $75,550
Paul Kanjorski -Democrat-PA $65,500

Any of these names ring a bell?

Any guess who co-sponsored the bill that might have prevented this mess, the Federal Housing Enterprise Regulatory Reform Act of 2005?

John McCain.

Watch the video - You see, I'm not making this stuff up!


Moderator said...

The type of relationship with these individuals also makes me nervous with the bailout plan currnetly being debated.

With Warren Buffet puting up 5 Billion for Goldman Sachs, the very company that has close ties with Secretary Henry Paulsen it raises servious questions. In January Paulsen will be out of his position (unless re-nominated) and I'm sure he will resume his work with Goldman Sachs.

I am not a conspiracy hack, but this really raises a warning flag

RG said...

Howdy Cowboy,

Was checking out cowboy blogs and thought I would invite you over to the W bar E blog:


Looking forward to seeing you there.