Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis.
At a 2004 hearing see Democrat after Democrat covering up and attacking the regulations to protect Fannie Mae and Freddie Mac (their Cash Cows) that are now destroying our economy because the Democrats let them cheat.
Also read “A New Opportunity for McCain“
By Peter Ferrara
Published 10/1/2008 12:08:01 AMAccording to House Speaker Nancy Pelosi, the financial crisis is all due to the Bush Administration’s “right wing ideology of anything goes, no supervision, no oversight, no regulation.”
But at a hearing in the House in 2004, now available in video on YouTube, the Republicans sought to expand supervision and regulation, over Fannie Mae and Freddie Mac. Federal regulators testified that the reckless financial practices of these two government-sponsored enterprises threatened the entire financial system. Republican after Republican called for a new regulatory authority to supervise Fannie and Freddie and impose standard bank regulation on them.
Franklin Raines, the former Clinton budget director who went on to serve as chairman and CEO of Fannie Mae, testified that the mortgage-related securities of these two organizations, which have now rocked the entire financial world, were “riskless.” During his tenure, Raines criminally led Fannie Mae to falsify its books so that he would qualify for excessive bonuses and compensation eventually totaling $90 million.
But the Democrats excoriated the Republicans for criticizing the wonderful practices of Fannie and Freddie that had been so successful in achieving their goals of affordable housing. The Republican concerns for safety and soundness were dismissed as trumped up efforts to frame the brilliant leadership of Mr. Raines, and said to show once again that Republicans don’t care about the middle class and the poor. Barney Frank, now chairman of the House Financial Services Committee, foolishly laughed off concerns over safety and soundness without offering any evidence to rebut these concerns. Instead, he shamefully led the Democrats in attacking the regulators, who had provided the evidence that Fannie and Freddie were increasingly threatening the safety and soundness of the entire financial system.
The following year John McCain was one of three co-sponsors of legislation to impose such regulatory supervision and controls over Fannie and Freddie. The Bush Administration supported this as well, in one of its four attempts to win legislative approval for such expanded regulatory authority. But the Democrats shouted these proposals down as an assault on affordable housing for the middle class and the poor.
So it was the Republicans who tried time and again to expand proper regulatory controls to prevent this crisis. And it was the Democrats who stopped them because such regulation threatened their policy of turning Fannie and Freddie into welfare programs. It is Chairman Barney Frank, not SEC Chairman Chris Cox, who should resign for his shameful and stupid role in creating this crisis. And if Franklin Raines is not prosecuted and sent to prison for his naked thievery, then we must let all of the Enron convicts out of jail and issue them a national apology.