Partially from a commentary on PoliticUsUSA.comSo many people are turning a blind eye to the fact that the Democrats, especially Bill Clinton, Barney Frank and Christopher Dodd, are responsible for the present state of our economy.
1977: President Jimmy Carter (D) signs the Community Reinvestment Act (CRA) into law. The law pressured financial institutions to extend home loans to those who would otherwise not qualify. The Premise: Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc. Results: Statistics show that CRA has not helped decrease crime nor significantly improved so-called poor communities.
1992: Representative Jim Leach (R- Iowa) warned of the danger that Fannie Mae and Freddie Mac were changing from being agencies of the public at large to money machines for the principals and the very few who held stock in the agencies.
1993: President Bill Clinton's administration extensively rewrote Fannie Mae and Freddie Mac's rules turning the quasi-private, mortgage-funding firms into semi-nationalized monopolies dispensing cash and loans to large Democratic voting blocks. Both were also growing into entities handing out favors, jobs and contributions to political allies. This potent mix led inevitably to corruption -- and now the collapse of Freddie Mac and Fannie Mae.
1994: Despite warnings, Bill Clinton unveiled his National Home Ownership Strategy, which broadened the CRA in ways Congress never intended.
1995: President Bill Clinton ordered Robert Rubin's Treasury Department to rewrite the rules of home finance. Robert Rubin's group reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans in order to receive a satisfactory CRA rating. The rating was key to expansion or mergers for banks. Loans began to be made on the basis of ethnicity -- specifically minority loans were approved almost carte blanche.
1997 - 1999: Bill Clinton , bypassing the newly Republican led Congress, enlisted Andrew Cuomo (then Secretary of Housing and Urban Development) to assist in allowing Fannie Mae and Freddie Mac to get into the sub-prime market in a BIG way. Led by Representative Barney Frank (D) and Senator Chris Dodd (D), Congress doubled-down on the risk by easing capital limits and allowing the agencies to hold just 2.5% of capital to back their investments vs. 10% holdings for normal banks. Since Fannie Mae and Freddie Mac could borrow at lower rates than commercial banks, their enterprises' boomed!
With incentives in place, banks poured billions of dollars of loans into poor communities, often "no documentation", "no income verification" -- requiring no money down and no verification of income.
Worse still was the cronyism: 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990's Fannie and Freddie enjoyed a subsidies of as much as $182 billion. Some analysts say that much of those billions went to the priviliged shareholders and not to poor communities.
1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie Mae and Freddie Mac's excesses. Congress held hearings the following year, but nothing was done because Fannie and Freddie had donated millions to key Congressmen and radical groups (such as ACORN), ensuring no meaningful changes would take place. "We manage our political risk with the same intensity that we manage our credit and interest rate risks," Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama advisor, bragged to investors in 1999.
2000: Treasury Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the "special status" afford by the CRA and Clinton's expansion of it. Democrats raised a ruckus, as did Fannie and Freddie, headed by a politically connected CEO. "We think that the statements evidence a contempt for the nation's housing and mortgage markets," Freddie spokesperson Sharon McHale said. That was the last chance, during the Clinton era, for reform.
2001: Republicans tried repeatedly to bring fiscal sanity to Fannie and Freddie, but Democrats blocked any attempt at reform. Rep. Barney Frank and Sen. Chris Dodd, who ran key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants, were especially critical of any reforms.
2003: President George Bush proposed what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago". Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.
2005: Federal Reserve chairman Alan Greenspan warned Congress: "We are placing the total financial system at substantial risk". Senator John McCain, along with two others, sponsored a Fannie/Freddie reform bill and said, "If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole". Senator Harry Reid (D) accused the GOP of trying to "cripple the ability of Fannie and Freddie to carry out their mission of expanding home ownership". The bill went nowhere.
2007: Fannie and Freddie own or guarantee over half of the twelve trillion dollar US mortgage market. The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall Street to repackage the bad loans and sell them to investors. As the housing market fell in 2007, sub-prime mortgage portfolios suffered major losses. The crisis was on, though it was fifteen years in the making.
2008: Presidential candidate John McCain has repeatedly called for reforming the behemoths. President Bush urged reform a recorded 17 times. Still the media have repeated Democrats' talking points about this being a "Republican" disaster. A few Republicans are complicit, but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats. That's why taxpayers are now being asked for $700 billion!
It's clear that the Democratic Party cannot be trusted with our tax dollars. Adding the extreme liberalism of Barack Hussein Obama will NOT turn our economy around -- but only make things MUCH worse. If you truly want to know how bad it can get, cast your vote for Obama. As for me and my house, "NObama - Keep the change!"
1977: President Jimmy Carter (D) signs the Community Reinvestment Act (CRA) into law. The law pressured financial institutions to extend home loans to those who would otherwise not qualify. The Premise: Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc. Results: Statistics show that CRA has not helped decrease crime nor significantly improved so-called poor communities.
1992: Representative Jim Leach (R- Iowa) warned of the danger that Fannie Mae and Freddie Mac were changing from being agencies of the public at large to money machines for the principals and the very few who held stock in the agencies.
1993: President Bill Clinton's administration extensively rewrote Fannie Mae and Freddie Mac's rules turning the quasi-private, mortgage-funding firms into semi-nationalized monopolies dispensing cash and loans to large Democratic voting blocks. Both were also growing into entities handing out favors, jobs and contributions to political allies. This potent mix led inevitably to corruption -- and now the collapse of Freddie Mac and Fannie Mae.
1994: Despite warnings, Bill Clinton unveiled his National Home Ownership Strategy, which broadened the CRA in ways Congress never intended.
1995: President Bill Clinton ordered Robert Rubin's Treasury Department to rewrite the rules of home finance. Robert Rubin's group reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans in order to receive a satisfactory CRA rating. The rating was key to expansion or mergers for banks. Loans began to be made on the basis of ethnicity -- specifically minority loans were approved almost carte blanche.
1997 - 1999: Bill Clinton , bypassing the newly Republican led Congress, enlisted Andrew Cuomo (then Secretary of Housing and Urban Development) to assist in allowing Fannie Mae and Freddie Mac to get into the sub-prime market in a BIG way. Led by Representative Barney Frank (D) and Senator Chris Dodd (D), Congress doubled-down on the risk by easing capital limits and allowing the agencies to hold just 2.5% of capital to back their investments vs. 10% holdings for normal banks. Since Fannie Mae and Freddie Mac could borrow at lower rates than commercial banks, their enterprises' boomed!
With incentives in place, banks poured billions of dollars of loans into poor communities, often "no documentation", "no income verification" -- requiring no money down and no verification of income.
Worse still was the cronyism: 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990's Fannie and Freddie enjoyed a subsidies of as much as $182 billion. Some analysts say that much of those billions went to the priviliged shareholders and not to poor communities.
1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie Mae and Freddie Mac's excesses. Congress held hearings the following year, but nothing was done because Fannie and Freddie had donated millions to key Congressmen and radical groups (such as ACORN), ensuring no meaningful changes would take place. "We manage our political risk with the same intensity that we manage our credit and interest rate risks," Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama advisor, bragged to investors in 1999.
2000: Treasury Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the "special status" afford by the CRA and Clinton's expansion of it. Democrats raised a ruckus, as did Fannie and Freddie, headed by a politically connected CEO. "We think that the statements evidence a contempt for the nation's housing and mortgage markets," Freddie spokesperson Sharon McHale said. That was the last chance, during the Clinton era, for reform.
2001: Republicans tried repeatedly to bring fiscal sanity to Fannie and Freddie, but Democrats blocked any attempt at reform. Rep. Barney Frank and Sen. Chris Dodd, who ran key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants, were especially critical of any reforms.
2003: President George Bush proposed what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago". Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.
2005: Federal Reserve chairman Alan Greenspan warned Congress: "We are placing the total financial system at substantial risk". Senator John McCain, along with two others, sponsored a Fannie/Freddie reform bill and said, "If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole". Senator Harry Reid (D) accused the GOP of trying to "cripple the ability of Fannie and Freddie to carry out their mission of expanding home ownership". The bill went nowhere.
2007: Fannie and Freddie own or guarantee over half of the twelve trillion dollar US mortgage market. The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall Street to repackage the bad loans and sell them to investors. As the housing market fell in 2007, sub-prime mortgage portfolios suffered major losses. The crisis was on, though it was fifteen years in the making.
2008: Presidential candidate John McCain has repeatedly called for reforming the behemoths. President Bush urged reform a recorded 17 times. Still the media have repeated Democrats' talking points about this being a "Republican" disaster. A few Republicans are complicit, but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats. That's why taxpayers are now being asked for $700 billion!
It's clear that the Democratic Party cannot be trusted with our tax dollars. Adding the extreme liberalism of Barack Hussein Obama will NOT turn our economy around -- but only make things MUCH worse. If you truly want to know how bad it can get, cast your vote for Obama. As for me and my house, "NObama - Keep the change!"
