The Bailout....Tom has the goods up at Bizzyblog.com
Fred/Fan and Who Was Asleep at the Wheel?
What do 9/11 and the Financial Crisis have in Common? Jamie Gorelick!!!!!
Imagine playing a central role in the biggest national defense disaster in 50 years. Imagine playing a central role in one of the biggest economic disasters in your country's history. Imagine doing both as an un-elected official. Imagine getting filthy rich in the process, and even being allowed to sit self-righteously on a commission appointed to get to the bottom of the first disaster, which of course did not get to the bottom of that disaster or anything else for that matter.
Imagine ending, ruining or at least causing signficant quality deterioration in the lives of millions of people, most of whom will never know your name. Imagine counting your millions of dollars while people who tried to stop you from causing all this mayhem were getting blamed for most of the ills you actually contributed to.
Well, as un-imagineable as this is, there is one American who doesn't have to imagine it. One Jamie Gorelick is this American. And without pretending that she caused the loss of countless thousands of lives and countless billions of dollars of wealth by herself, she certainly did push some of the early domino's in catastrophic chain events that are a major factors in life in America today.
This is not a bad millineums's work, when you think about it. Gorelick, an appointee of Bill Clinton, is the one who constructed the wall of separation that kept the CIA and the FBI from comparing notes and therefore invading the privacy of nice young men like, say, Muhammed Atta and Zacarius Moussaoui. While countless problems were uncovered in our intelligence operations in the wake of 9-11, no single factor comes close to in importance to Jamie Gorelick's wall.
In fact, it was Gorelick's wall, perhaps more than any other single factor, that induces some people to blame Clinton himself for 9-11 since he appointed her and she acted consistent with his philosophy of "crime fighting." She put the wall into place as Deputy Attorney General in 1995.
And for good measure, she was appointed by Tom Daschle to serve on the "non partisan" 9-11 Commission. And we thought the fox in the henhouse was simply a metaphor. Of course, in a splendid example of "reaching across the aisle," feckless Republican Slade Gorton of Washington did all he could to exonerate Gorelick in the commission. Thanks, Slade. God forbid the nation actually knows the truth.
But for Ms. Gorelick, one earth shaking catastrophe is just not enough. You might think that she caused enough carnage to us infidels on 9-11 as to qualify her for the 72 virgins upon her death. (this would also keep her consistent with several of Clinton's philosophies).
Alas, that's only part of her resume. Her fingerprints are all over the Fannie Mae-Freddie Mac mess, which is to say the mess that is central in the entire mortgage-housing crisis. Without so much as one scintilla of real estate or finance experience, she was appointed as Vice Chairman of Fannie Mae in 1997 and served in that role through 2003, which is when most of the systemic cancers that came home to roost today happened. She was instrumental in covering up problems with Fannie Mae while employed there and took multiple millions in bonuses as she helped construct this house of cards.
From Wikipedia:
One example of falsified financial transactions that helped the company meet earnings targets for 1998, a "manipulation" that triggered multimillion-dollar bonuses for top executives. On March 25, 2002, Business Week Gorelick is quoted as saying, "We believe we are managed safely. Fannie Mae is among the handful of top-quality institutions." One year later, Government Regulators "accused Fannie Mae of improper accounting to the tune of $9 billion in unrecorded losses"
As we know, the financial damage done by the housing related problems in this country are still incalculable. Ms. Gorelick's evil tab is still growing.
Whose Bailout is it? The IBD comes through again...
We've already documented how Fannie Mae and Freddie Mac were used as a jobs program for out-of-work Clinton administration officials and other Democrats, ranging from Franklin Raines to Jamie Gorelick to Jim Johnson.
And how tens of millions of dollars in political donations from those two government-sponsored enterprises distorted decision-making in Congress. This has been the problem all along.
The U.S. government regulates the private sector on behalf of taxpayers who expect competency, fairness and transparency.
But when the federal government messes up, those principles go out the window. And the lender of last resort isn't the Fed or Treasury, as some would have it. It's always the taxpayer.
Remember this when a Democrat-led Congress holds hearings — as House Speaker Nancy Pelosi now promises — and lambastes "the private sector" and "Bush economic policies" for these market meltdowns. Neither deserves the blame.
President Bush tried to reform Fannie and Freddie in 2004 but was rebuffed. A Democrat-led Congress, with some help from weak GOP members, has made repeated mistakes in turning our world-class financial system into an over-regulated, politicized piggy bank for Democratic causes and candidates (see editorial above).
Virtually all the mistakes have been caused by errors in regulation — not by "corporate greed," as liberal Democrats would have it.
Whose Policies Led Us Here?
The credit crisis and the lack of oversight over government-subsidized lenders like Fannie Mae and Freddie Mac occurred on the watch of George Bush, and many blame his economic team for their lack of oversight in the collapse. Barack Obama has made this point one of his major campaign themes, arguing that John McCain would provide more of the same failures that Bush did. However, what many do not recall is that Bush wanted to tighten oversight with a new regulatory board for Fannie Mae, Freddie Mac, and other government recipients for the express purpose of addressing bad loan practices — and Democrats blocked it.
The New York Times reported this five years ago:
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
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.
This should have been a no-brainer, right? With hindsight, we can see that the Bush administration had accurately diagnosed the problem in the lending market and had a plan to address it. Fannie Mae and Freddie Mac reluctantly supported the plan. However, Democrats objected (emphases mine):
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.
Sounds a little like the Democratic denial of problems in Social Security, doesn’t it? Nothing to see here, no crisis on the horizon. Everybody just move along, now. The Democrats had forced lenders to assume more risk at lower interest rates in the 1990s, as IBD points out today, and they didn’t want to countenance an end to their populist policies:
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.
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.
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory.”
Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the ’90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.
It was the Bush administration that wanted to rein in the madness in the credit markets, and the Democrats who wanted to extend the Clinton policies that created the crisis we have now. After the fit hit the shan, as Michelle says, these same Democrats want to shift blame back to the administration that wanted to increase oversight and curtail risk in lending practices while reducing patronage at the giant GSEs.
The Bush administration isn’t blameless in letting this get out of hand, but clearly the origins of the disaster and the efforts to keep bad policies in place fall on the Democrats in this case.
This is the Guy Barry Obama Leaned on for Advice on Mortgage? How is that going to help the "crisis"? Wiki link here.
Barney Frank Says Economy is Sound...Why Isn't Obama Crucifying Him Like He Did McCain?from the PBS Charlie Rose Show:
There are good sovereign wealth funds and bad sovereign wealth funds because there are bad and good countries. They're buying because of the security in the United States. Even with volatility this is still a place people want to put their money. This is a very stable democracy with a fundamental economy which has been damaged now but which we expect to come back.
The WSJ's Recent Compendium of the Fred and Fannie Mess
Meanwhile....in the political fun and games....
Biden: Founders Were Wrong and Unpatriotic in Not Paying Tea, Stamp Taxes...I mean, after all, if it is patriotic to pay more, why declare Independence? And, why doesn't he simply give MORE?
And, can we at least now, going with Biden's thoughts on Taxes and Patriotism, question the patriotism of Charles Rangel?
Joe Biden Says Palin Had a Harder Job as Mayor than He and Obama as Senators:
.""I used to be a councilman," he said while praising a local member where he was campaigning. "I left that for this job, for the senate, you know why? Your job was harder."
Here is the video:
Another Obama Supporter Who Hates America: Josh Howard. Check out the Video...
I guess his real campaign slogan is "G.D. America--Obama 08".
Obama Trying to Race Bait: The Limbaugh Ad....Tapper and Others Shoot Down the Despicable Ad.
Former Clinton Supporter Comes Out In Favor of McCain....Says Obama is an elitist snob...who knew?
Even Bubba is giving Palin some love....but not the kind he is famous for....
Obama Using Racial Antagonism--WSJ piece
Obama Heckled in Florida...by African Americans....
Gang of Porky 20 Disbands...Congress going to let offshore drilling ban expire....You won't hear it being reported...the Dems don't want to let the nutjobs protest....
This is old news in the blogosphere, but I'd be remiss if I didn't mention on the Corner that the Gang of 10 16 20 won't offer its energy bill after all. The gang's bill would have opened up only a smidgen of the Outer Continental Shelf for drilling, leaving close to 80 percent off-limits. It was loaded with pork — mostly tax credits for hybrid cars and subsidies for biofuels — and it would have raised taxes on domestic energy production. It was a bad deal, and taxpayers should be glad to see it go.
Instead of passing a sham energy bill, it looks like Congress will let the ban on offshore drilling expire October 1. Just months ago this looked like an impossible goal, and a lot of people deserve credit for the turnaround. House GOP leaders and Sens. Jim DeMint and Tom Coburn are at the top of that list. Leading Democrats swear that this is merely a temporary defeat, and they have promised to renew the ban as soon as the election is over. They could not have handed McCain a better talking point. He needs to be out there telling voters that he would veto any attempt to restore the ban
Check out more in the Energy Tab here at WMD.
Biden the Gaffe that Keeps on Giving in Ohio....He Says a Bunch of Hens could Kick the Buckeyes Butts? Uh...NO....
