UPDATE: RESCUE BILL FAILS; Democratic House Speaker Nancy Pelosi From SF Blames Bush’s Economic Policies For Current Economic Crisis, But Are Democrats Really to Blame?

In an amazing display of hypocrisy, Democratic House Speaker Nancy Pelosi, who hails from that country called “the San Francisco Bay Area,” took to the House floor to deceive the American public into thinking the Bush Administration - which I am mostly no fan of - and Republicans are at fault for the current economic credit crisis our country, and the entire world, faces today.

“When was the last time anyone asked you for $700 billion dollars? It’s a staggering figure. And many questions have arisen from that request,” Pelosi animated.

“A staggering number, but only a part of the cost of the failed Bush economic policies to our country. Policies that were built on budget recklessness,” she continued.

“When President Bush took office, he inherited President Clinton’s surpluses…on a trajectoryto 5.6 billion dollars in surplus. And with his reckless economic policies, within 2 years he had turned that around. (she purposely leaves out that little economic problem called 9/11 that caused our economy to lose trillions of dollars?) And now 8 years later that fiscal irresponsibility, combined with an anything goes economic policy, has taken us where we are today,” she continued to lament.

“No regulation, supervision; no discipline. And if you fail, you will have a golden parachute, and the taxpayer will bail you out,” the San Francisco Democrat bemoaned. Those days are over! The party (Party?) is over!“

Those last two sentence are about the only thing I agree with Nancy Pelosi about. I want investigations (not led by those that have been tainted by ties to Fannie Mae, Freddy Mac or ACORN) into political favors and corruption of all the failed and culpable entities thus far - especially Fannie Mae, Freddy Mac and ACORN.

The reality is that this country used to be built around the 30-year fixed mortgage that served us well, until the Clinton Administration promoted policies to change and loosen those restrictions on home ownership that has been so successful to our economic greatness.

When Bill Clinton was asked in an interview recently about Democrats being culpable to know that a fiscal train wreck was coming, he took time and thoughtfully and truthfully stated that Democrats had been “resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.” Those two quasi-government entities are THE most responsible for economic credit crunch we now face.

These giant entities bought up massive amounts of borderline and bad loans and bundled them together without any transparency and resold them to financial institutions around the world. When the housing market corrected a big bubble caused by Democrat policies, instead of a manageable amount of people losing theirhomes as is the case naturally, the country was flooded with a massive, multi-year wave of people not being able to pay their mortgages, causing great risk to the entire economic deck of cards. This is Democratic socialism at it’s very worst, where too much federal government intervention without proper regulation, corruption, greed and socialism replaced free-market enterprise principals.

President Clinton put people like Jamie Gorlic, who received a $25 million dollar “golden parachute,” and Franklin Delano Raines, who received a malefic amount of money totalling $90 million dollars, into padded seats overseeing his failed policies at Freddie and Fannie.

HUD Director [Andrew] Cuomo [son of Senator Mario Cuomo], picked by Clnton without any real banking or real-estate experience, was given sole responsiblity in Washington with power to regulate the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC), better known as Fannie Mae and Freddie Mac. That was the beginning of fiscal irresponsibility that eventually led us to our current, world-wide economic crisis.

A Village Voice story by legendary investigative reporter Wayne Barrett said this about Cuomo:

“Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country’s current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why.

“[Andrew Cuomo] turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded ‘kickbacks’ to brokers that have fueled the sale of overpriced and unsupportable loans.”

After 1997, restrictions were loosened so that in order to qualify for a mortgage a borrower no longer needed a job, income, or even their own money for a deposit. As a result of Democratic policies pushed by groups like ACORN and the Congressional Black Caucus, many people who previously were ineligible to buy a home were suddenly able to. Requirements to prove to a bank that they had the ability to pay back those mortgages were thrown out the window.

The sudden injection of millions of newly eligible potential homeowners caused more people to buy homes, which caused there to be fewer homes on the market available for purchase, which caused the value of existing homes to skyrocket. But BECAUSE those home values went up so much so quickly, an inevitable housing correction was necessary. That correction caused so many people to lose so many homes that it eventually overloaded our entire credit system, causing our credit meltdown we face today.

In April 1997 the New York Times wrote that ”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.  Representative Jim Leach, Republican of Iowa, said Freddie Mac” had “borrowed $125 million in the bond markets on Monday at 6.99 percent, an interest rate reflecting the market’s belief that the Treasury had effectively guaranteed repayment.”  Freddie Mac then “used the $125 million to buy corporate bonds issued by the Philip Morris Companies with identical 10-year maturities yielding 7.68 percent.  Mr. Leach said that such an investment strategy might be legal, but that it was not appropriate. ‘Freddie Mac was established by an act of Congress for a specific purpose: to advance home ownership, not to facilitate tobacco sales,’ he said. ‘What Freddie Mac’s action amounts to is taxpayer subsidization of corporate arbitrage and, implicitly, the tobacco industry.”’

The facts are that the Bush Administration rang the alarm bell to fix Freddie and Fannie way back in 2003.

They had ”recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago,” says a September 11, 2003 New York Times story on the subject.

Under the plan, a new agency would have been created within the Treasury Department to assume supervision of Fannie and Freddie. The agency would have the authority, which STILL rests with Congress, to set one of the two capital-reserve requirements for the companies. It would then have have authority over any new lines of business. “It also would have been given authority to determine whether the two were being adequately managed” the Times article said.

“These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis,” Frank said back in 2003, as 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.

Rep Melvin L. Watt, (D-NC) agreed with his fellow Democrat.

”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 who in particular is to blame for not allowing proper oversight into Fannie and Freddie? This is from ibdeditorial.com:

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

“But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street’s most revered institutions.”

And what about Barack Obama’s involvement? This is from canadafreepress:

“Mortgage lenders were forced by congressional Democrats, specifically Barack Obama and the Congressional Black Caucus, to lower lending guidelines to welfare levels in order to make home ownership possible for Democrat constituents who would otherwise never qualify to own a home. This 2005 video clip of Fannie Mae CEO Daniel Mudd before the Congressional Black Caucus swearing in ceremony connects the dots that Obama hopes you will never see…”

The article goes on to say that CNN reported that “Freddie Mac spent over $94.8-million on lobbyists since 1998, making it the nation’s 12th-largest lobbying client, while Fannie Mae bought $79.5-million of influence, the 20th biggest spender, according to the Center for Responsive Politics.” – “They wanted to fend off regulation of their enterprises,” said Massie Ritsch of the Center.

“Sen. Barack Obama is the No. 3 recipient of Fannie and Freddie campaign dollars, having collected $123,000 from the companies since he first ran for the Senate in 2004, according to the Federal Election Commission and the Center for Responsive Politics.”

The article lists other top recipients as Christopher Dodd (D), Chairman of the Senate Banking Committee, John Kerry (D), Barney Franks (D) and Charles Schumer (D). The article says that “all played a major roll in creating today’s financial crisis and they all are favored recipients of Fannie and Freddie lobby funds.”

John McCain recently said it best in describing Barack Obama’s involvement in our financial crises:

“We need reform in Washington and on Wall Street. The financial markets are in crisis. Times are tough. Enormous strain is being put on working families and individuals in America. I know that the events unfolding can be difficult to understand for many Americans. The dominos that we have seen fall this week began with the corruption and manipulation of our home loan system. The reason this crisis started was the abuses that took place within our home loan agencies, Fannie Mae and Freddie Mac and within our home loan system.”

“Two years ago I warned this Administration and Congress that regulations for our home loan agencies, Fannie Mae and Freddie Mac, needed to be fixed.

“But nothing was done.

“Senator Obama talks a tough game on the financial markets but the facts tell a different story. He took more money from Fannie and Freddie than any Senator but the Democratic chairman of the committee that regulates them. He put Fannie Mae’s CEO who helped create this disaster in charge of finding his Vice President. Fannie’s former General Counsel is a senior advisor to his campaign. Whose side do you think he is on,” McCain asked. “When I pushed legislation to reform Fannie Mae and Freddie Mac, Senator Obama was silent. He didn’t lift a hand to avert this crisis,” McCain charged. “While the leaders of Fannie and Freddie were lining the pockets of his campaign, they were sowing the seeds of the financial crisis we see today and enriching themselves with millions of dollars in payments. That’s “not change, that’s what’s broken in Washington,” McCain insisted.

McCain and the GOP were right to push for more oversight for Freddie and Fannie, but the Democrats used race-card and class warfare rhetoric to keep their political corruption and greed from being reined in or shown to the American people.

In other political news, Fannie Mae and Freddie Mac: The Democrat’s Scandal That The MSM Will Never Tell You!

Fannie, Freddie Spent $200M to Buy Influence

Fannie Mae and Freddie Mac Invest in Democrats

BREAKING NEWS UPDATE: Lawmakers Blame Partisanship for Failed House Bill

Text of Discussion Draft of Rescue Bull Bill

Dow Dives 778 on Rescue Vote

McCain-Palin<—true leadership with a record to prove it needed now more than ever!

   Tagged: fannie mae, fannnie mae freddie mac, John McCain, sarah palin