But first, a word from our sponsors...
The myth of the ingrained stupidity of Bush has been greatly exaggerated over the last 8yrs. Say what you will but should you manage to actually look at the record, you'll see the guy clearly had the presence of mind to anticipate the threat posed by "Fannie and Freddie's" ramped up engagement with sub prime lending -a fact the liberals geniuses wouldn't recognize until it was too late to avert catastrophe, and some amongst them still don't get it (hence the foolish blaming of the Gramm-Leach-Bliley Act)...
It was back in April of '01 when the Bush Administration, in the FY02 budget, first declared that the size of Fannie and Freddie was "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity." Then in a letter to OFHEO in May of '02, the Administration called for the disclosure and corporate governance principles contained in Bush's '10-point plan for corporate responsibility' to apply to Fannie Mae and Freddie Mac.
It was discovered that Fannie had cooked their books in September of '03 after Fannie released the findings of a SEC investigation and concurrently admitted that a review of The Office of Federal Housing Enterprise Oversight (OFHEO) had discovered 'earnings manipulations' (it was October of of '03 when Fannie disclosed a $1.2 billion 'accounting error').
The Bush administration (in September of '03 still) called for Congress to enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises". CEA Chairman Greg Mankiw elaborated the Administration proposal further that following November, saying that "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk" and the "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE".
In the FY05 budget, published in February of '04, the Bush administration again warned of the risks posed by Fannie and Freddie, and called for regulation. The Administration is continuously on the record *consistently* warning about Fannie and Freddie danger to the economy, and *consistently* calling for further regulation all the way up until as recently as June of '08. In July (after it was clear that Fannie and Freddie were failing) Congressional Democrats finally -after over SEVEN YEARS saw fit to heed the call, but it was too late...
Republicans spoke out on Freddie and Fannie as well, which culminated in the -Republican controlled- Senate Banking Committee adopted a regulatory bill for Fannie and Freddie (this was 2005!) which every Democrat on the same committee *unanimously* opposed. When the bill reached floor of the Senate (where McCain spoke out as Obama said nothing) it was the concerted opposition of the Democrats which killed the bill there.
What a bunch 'deregulation whores' Republicans were! I mean when I looked up the facts on this stuff I was steamed by these greedy wind bags who clearly set out to let the markets run wild. Clearly I'm saying this tongue in cheek... To all who've been duped into believing Obama has the better judgment on economic issues I challenge to tell me who exactly it is you think was among those regulation loving Democrats who were doing and saying as much as the administration and Republican about the economic threat from Fannie and Freddie? Who amongst them were saying anything?
If your interested in the other half of the truth then I suggest that you go look at what exactly was the Democrats response to the the Administration's calls for the regulation of Fannie and Freddie. Here I'll help you out...
As far as deregulation goes though, The Glass-Steagall Act only keep depository banks from engaging in investment banking, it never *regulated* Fannie and Freddie. The Gramm-Leach-Bliley Act (or Financial Services Modernization Act) -which was voted in by a count of 90 in the Senate -and signed by Clinton with no protest- did however permit banks to be affiliated with firms that underwrite securities, which thus allowed Bank of America Corp. to acquire Merrill Lynch & Co. and JPMorgan Chase & Co. to buy Bear Stearns Cos. Both transactions saved the government the costs of a rescue and spared the market substantial additional turmoil. Beyond that, it had nothing to do with this debacle.
Looking for someone to blame? Well just remember that the central cause of our economic problem stems from the fact that there are too many people defaulting on mortgages they should never been granted to begin with. Collecting interest off of loans is the life's blood of our financial system. If you compromise that for any reason (even with the best of intentions), then the whole system will fail. The very impetus for these folks being able to get these loans was the Democrats misguided 'Robinhood' complex.
If the polls are correct, then it only shows -unfortunately- that we've once again miss the only lesson to be learned from this debacle that will keep us from repeating this error again.
I'm Black and I approve of this message!
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