Wednesday, September 24, 2008

You coulda knocked me down with a feather...

This article was published by the San Francisco Chronicle!!!!  Will wonders NEVER cease?


"The average American listening to all the news of bank failures, and Fannie Mae and Freddie Mac (who?) being taken over by the government, and now a “bail-out” of large, privately owned and well known companies, is at first bewildered, and then angry. The average American should be furious.

But whom should Americans be furious? That seems to be the big question as political fingers are pointing in every direction. Was it greedy CEO’s with their “golden parachutes?” Was it the Democrats? Was it the Republicans? Was it Wall Street? (Who, exactly IS “Wall Street?”) The simple answer is that it is all of the above.

Treasury Secretary Henry Paulson, Jr., and Federal Reserve Chairman Ben S. Bernanke were on Capital Hill taking a verbal beating from some of the very people who should not be asking the questions, but answering them and answering those questions under oath.

Senator Chris Dodd, (D-Conn.) and Congressman Barney Frank, (D-Mass.) are the first two who should be grilled, not by fellow politicians, but by an independent and hopefully very clever, angry, and mean attorney hired by the American people. No one from the present Justice Department need apply. Both should be asked how much money they have taken from lobbyists hired by the CEO’s of Freddie Mac and Fannie Mae. Since that is public record, they should then be asked what Fannie and Freddie got in return for that money.

Barney Frank should be questioned about his House Bill, H.R. 3838, that is clearly designed to keep Fannie and Freddie afloat as long as possible despite all the signs that there was serious trouble ahead. But all his bill did was make the hole bigger in the side of the Titanic. Basically all H. R. 3838 did was: “To temporarily increase the portfolio caps applicable to Freddie Mac and Fannie Mae, to provide the necessary financing to curb foreclosures by facilitating the refinancing of at-risk subprime borrowers into safe, affordable loans, and for other purposes.”

Barney Frank and his counterpart in the Senate, Chuck Schumer, (D-N.Y.) did everything they could to delay and cover-up the outright fraud and book-cooking that was going on within Freddie and Fannie.

As far back as 2003, Freddie and Fannie were $9 billion dollars in debt because of bad loans that continued to be accepted on a daily basis. Pressure from liberals in Congress to continue giving out bad loans was relentless and for years it continued with CEO’s, who happen to be friends of Dodd, Frank, Schumer, and Clinton, leaving with millions in their bank accounts as the companies they ran went under.

The truth is that this financial disaster for the American taxpayer didn’t begin under George Bush, or Bill Clinton, or George Herbert Walker Bush, or Ronald Reagan. It started under Jimmy Carter . It started with the passing of The Community Reinvestment Act in 1977. Basically, this act pushed local community banks and lenders, to “bend” the rules a little and give loans to low-income families. Like many liberal schemes, it seemed like a good idea at the time. There was a provision that protected the nervous lender in the clause that stated that loans should be given “in a safe and sound manner.” This gave the bank some leeway and choice in the loans that were given out.

Under Bill Clinton, The Community Reinvestment Act was revised. Basically, the revision started to put pressure on lenders to take more financial risks. It was felt that lenders were not being “fair” to minorities and the poor who only wanted to share in the American dream of owning their own home. Janet Reno began to outwardly threaten banks and mortgage lenders with prosecution if home loans were not approved for those who wanted to purchase homes that, in truth, they could not afford.

Fearing federal retribution, loans started being approved for people who had no down-payment, no jobs, no collateral, and absolutely no hope of ever being able to meet any mortgage payment after the grace period of low interest ran out.

Then, the greed took over. Banks would “bundle” up loans, good and bad, and sell them to Fannie Mae and Freddie Mac, making all their money up front for loans they knew would default eventually. As these loans did default, in larger and larger numbers, even Fannie and Freddie could no longer stand up under the hemorrhage of money loss. Wall Street panicked and so did the federal government.

Were there warning signs that a disaster was looming? Of course, there were. But there was money to be made and politicians and CEO’s alike were not about to give up the gravy train of money being crammed in their pockets. The CEO’s of Freddie and Fannie would hire lobbyists to slip money into the pockets of Senator Chris Dodd, (D-Conn.), chairman of the Senate banking committee, who was supposed to be overseeing the banking industry, to the tune of $133,900 since 1989. Barack Obama was number two at the trough with over $120,000 which was no small feat since he has only been in the Senate for three years. Dodd and Obama were closely followed by the last Democratic nominee, John Kerry, (D-Mass.) and then Senator Hillary Clinton, (D-N.Y.)

What were these lobbyists buying for the millions they sprinkled around the Senate and House of Representatives? They were buying a blind eye. They were buying little or no oversight into the juggernaut that has finally crashed on the heads of the American taxpayer. CEO’s got rich, politicians got rich and they got votes, being able to tell minorities and the poor, “See what we are doing for you?” For years, the red flags were stuffed under the desk and ignored.

Early in his administration, George Bush sounded an alarm over the small amount of working capital Fannie and Freddie had on hand. He urged them to sell more shares to increase their reserve in funding and put them on more stable ground. He urged them to be more selective in the loans they bought. This suggestion was declined because the current stockholders would n ot make as much profit.

Franklin Raines, the Fannie Mae CEO from 1999 to 2004, decided to retire early, taking millions with him, under a cloud of accusations that he had cooked the books to make it appear the company was making money instead of going head-long into debt. Another player in this financial kabuki dance is Jamie Gorelick. That name should ring a bell with every American. She seems to surface right at the heart of every American disaster in the last 15 years. Ms. Gorelick was vice-chair of Fannie Mae from 1997 to 2003. Like all the others, she left with millions in her pocket while declaring that Fannie Mae “is among the handful of top-quality institutions."

The next year it was found that Fannie was $9 billion dollars in the red. Oddly, this $9 billion had been overlooked in the books Ms. Gorelick and Mr. Raines kept.

Let’s put Mr. Raines and Ms. Gorelick on the stand. The American people deserve to hear how much they gave lobbyists to pass on to their friends in Congress to keep the blinders on. That number is a staggering $16.2 million dollars since 1997. That amount bought very large blinders. And, it bought time. It bought time for the likes of Raines and Gorelick to make their millions and bow out before the bottom fell out.

Republican nominee John McCain raised the alarm two years ago but his plan for more oversight was killed in the Democrat-controlled committee. Over 20-year span, McCain took $20,000 but this did not stop him from voicing his concerns. The problem was that Democrats didn’t want to hear about it.

President Bush’s warnings were also ignored. Should Bush have done more? Yes. Unfortunately, Bush was distracted by the 9/11 attack and wars in Afghanistan and Iraq. So now, nearly every hour Americans watch as a pompous Chris Dodd or Barney Frank struts to a microphone to declare the “failed economic policies of the Bush administration are responsible for this mess.”

No, Senator, he is not. YOU and your greedy friends are responsible. It took three decades to reach the point of no return and some were there with their hands out nearly all of those years.

The Federal Bureau of Investigation is launching a full investigation into all of this. This investigation will abruptly end should Barack Obama win in November. The last thing Democrats want is the American people learning how complicit so many of them are in the illegal practice at Fannie and Freddie that led to the taxpayers bearing the brunt of the their unbridled greed.

While politicians want oversight over the “bail-out,” there has been little outcry for an investigation into how all this evolved.

It’s time for Americans to go to their windows and throw them open and yell, “We are mad as hell and we aren’t going to take it anymore!”

Then, in November, vote the lot of them out of office."

Can you believe that a liberal paper in America's most liberal city, 40 days before the presidential election had the GALL to print anything so absolutely factual and accurate?  

WTF???!!!

Yours for a better world,

Mentatt (at) yahoo (d0t) com

11 comments:

Bureaucrat said...

Jeffers, the Republican South Carolina/Lee Atwater/smear machine is alive and well. What a biased piece! Did the democrats do anything right at all? Not one democrat is listed as being anything but a crook. Bush and McCain's early warnings were ignored??? I'm surprised the writer didn't go all the way back and blame democrat Woodrow Wilson from 1914! This is a biased opinion piece, trying very hard to put the blame somewhere else, other than on the people in the White House, who interfered with the entire housing regulation process. The democrats didn't help things (thanks, Barney and you too, Dodd) Give me a break.

Anonymous said...

You know you're ****ed when the MSM starts telling the truth...

Greg T. Jeffers said...

Bureaucrat:

Sorry, dude, this is certainly an opinion piece, but it is factual and well researched.

I am a free market, libertarian, stone cold capitalist - I DESPISE both the Repubs and the Dems obsessively - and IMHO the CRA and its amendments 100% led to the mortgage disaster. Not that some sharp SOB's weren't there along the way to profit like hell from the dopey idea of lending people money that do not have the credit, character, or capacity to pay it back.

But it does not matter anymore. I KNOW where the blame belongs, but I don't give a shit. Let the schmucks play the blame game - I'm out. What is done is done.

The big story now will once again be ENERGY - and our Pols will f*&ck that up, too.

Anonymous said...

'The Chronicle has recently tended to have a conservative outlook on initiatives often supporting those that enforce less spending and less government.'

http://ballotpedia.org/wiki/index.php/San_Francisco_Chronicle

I hope you don't confuse socially liberal and fiscally conservative. That's a fairly common category. Especially among the dying dead tree corporate media/propaganda networks. There hasn't been liberal media in this country since the fairness doctrine went in 1987. And even then, none of it was particularly liberal. Mostly status quo suck ups.
The coming recession might put the energy cliff a little further off. That demand destruction does work.

Greg T. Jeffers said...

I don't confuse socially liberal and fiscally conservative at ALL - That is the very definition of LIBERTARIAN!!!

If you read my stuff you gotta know that I am RABIDLY LIBERTARIAN!!!!

Greg T. Jeffers said...

There is NO DEMAND DESTRUCTION!!!!

Demand can NEVER exceed supply. Supply went down, in the form of declining imports, ergo demand went down.

I make my LIVING, and it has been berry, berry good to me, deciphering this stuff. You don't have to believe me take on things, but I would not take the other side of the trade from me 100% of the time if I were you...

And that is the difference. On this blog, I am just shouting into the wind.... but during the day I wade into the fray with my hard earned capital and put my money where my mouth is.

Not that I am right every time. Just look at sliver...

Anonymous said...

This article came from the San Francisco Chronicle?? I searched and searched for it. Nada. nothing. So i googled it.

http://www.chronwatch-america.com/articles/3623/1/The-Bailouts-Must-Stop/Page1.html

Source is a bit off..

Bureaucrat said...

Everyone who works and has most things in his life going well is going to be libertarian. Only when you suddenly become hungry, or you need health care, or you are the victim of a crime, does everyone come running to the Federal government (that's me :)). I don't mind being seen as part of the problem cause I know I'm not. Politics makes it hard to do the right thing sometimes. If the nice little old lady on NBC whose Galveston house was ruined asks for help, somebody's gonna have to help her (and pay for it). It oughta be her family or "church," but you know not everyone has that kinda life. But don't worry. Apparently my bosses (Congress) have no trouble borrowing another billion for one disaster after another.

Greg T. Jeffers said...

Bureaucrat:

The Federal Government will, at some point CERTAIN, lose the funding that enables people to make these silly demands upon it.

We are FAR more addicted to social programs in the U.S. than we are to foreign oil. It ain't even close.

Anonymous said...

I am a free market, libertarian, stone cold capitalist

Read: I only care about myself dammit. Morality? What morality?

Sorry, dude, this is certainly an opinion piece, but it is factual and well researched.

Let the record show that no proof was provided in a medium that allows one to easily provide it through links.

And as for the "threats" to loan the money to people that couldn't afford it. Please!! The lenders still had a choice to lend them the money. That is all on the lenders. No one else. Countrywide and Wall Street didn't seem to mind while they were raking in the cash.

Paula Mochel said...

Thank you, Greg Jeffers, for posting this article, but many more thanks to Anonymous who found out who the author is and where it actually appeared. Let get the attribution right and not be sloppy, hey?