UPDATE 11:46 pm: Check this out. Obama is sending this around in his daily email. Now this is chutzpah. Someone ought to get access to his email list and send around the enormous dollars that this political corrupt Chicago hack took from the Fannie Mae, Freddie mac, Goldman et al
The failed economic policies and the same corrupt culture that led us into this mess will not help get us out of it. We need to get to work immediately on reforming the broken government -- and the broken politics -- that allowed this crisis to happen in the first place. (from Barack Obama our plan)
UPDATE 12:20pm HIGHLIGHT OF THIS MORNINGS HEARINGS AND THE ONLY HONEST MOMENT: As Dodd adjourned the hearing a great American was heard shouting about the “fox guarding the henhouse”. The blood drained from doddering's face.
UPDATE 11:30: BAIL OUT HEARING: CHRIS DODD IS BRINGING DOWN THE GAVEL? WTF is Dodd doing there? That's like Lucky Luciano presiding over the Al Capone trial. Fookin nutz! As chairman of the Senate Banking Commitee , Dodd insisted that these ridiculous loans be made over the past 10 years!
UPDATE: Senator Jim Bunning, Republican of Kentucky, has emerged as one of the most strident enemies of the bailout proposal “It’s financial socialism, and it’s un-American,” he said in his opening statement. On Friday, he offered a eulogy for the economy, saying, “The free market for all intents and purposes is dead in America.”
Are Americans, who are footing perhaps a trillion dollar bill, even remotely interested in how it really happened? I ask you. When we may very well be working 40-45% of the time for the government, will they inquire - how did I get here or will they listen to the complete line of bullshit the Obama, a chief moocher and looter, is inventing? I have to know. The mainstream media is depraved. It does not do investigative journalism save to smear folks on the right.And even then it is invented. They should aspire to the journailstic standards of the Enquirer. Instead, they have 14,000 trolls in Alaska tracking what feminine protection Sarah Palin uses so that they might tie her to global warming.
In his incredibly short stint in politics, Obama was the second highest recipient of Fannie Mae/ Freddie Mac lobby dollars. Why isn't the media ripping him a new %$#hole?
Why is a first term Senator pulling down almost $300,000 a year from Goldman Sachs, Lehman Brothers, Bear Stearns, Fannie Mae, Freddie Mac, AIG, Countrywide Financial, and Washington Mutual? He has not even completed his fourth year in the Senate and received a total of $1,093,329.00 from these eight companies and their employees. (all data from OpenSecrets.org). John McCain’s numbers, according to OpenSecrets.org for the period 1990-2008 (i.e., 18 years worth of data) only collected $549,584.00. In other words, Barack is receiving $273,582.25 (and 2008 is not over) per year while McCain raised a paltry $30,532.44.
Want another shocker? Barack Obama has received more from one source–Goldman Sachs $542,252.00–than McCain has from all of the companies combined. Who the hell is more beholden to lobbyists? And why does a junior Senator from Illinois rate this kind of dough? (more here)
If shock of the crushing blow of 9/11 didn't wake America up to Islam, will this crushing financial implosion? McCain must take the damn gloves off. This is a good beginning: Steve Schmidt, a McCain campaign senior adviser, on a conference call with reporters Monday said that The New York Times “is not a journalistic organization.”
“Whatever The New York Times once was, it is today not by any standard a journalistic organization,” Schmidt said. “It is a pro-Obama advocacy organization that every day impugns the McCain campaign, attacks Senator McCain, attacks Governor [Sarah Palin]. It excuse Senator Obama. …
“Everything that is read in The New York Times that attacks this campaign should be evaluated by the American people from that perspective – that it is an organization that has made a decision to deemphasize its journalistic integrity and tradition, to advocate for the defeat of one candidate – in this case, John McCain – and to advocate for the election of the other candidate, Barack Obama.”
Schmidt said later that the Obama campaign has been “abetted” by a compliant media that gives more scrutiny to the Republican than to the Democrat. (more here)
Schmidt is going to easy on the NY Crimes. Check out the financial back story.
How the Democrats Created the Financial Crisis Kevin Hassett Bloomberg hat tip JM
Back in 2005, Fannie and Freddie were, after years of dominating, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Comiission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even ``on the page'' of allowable interpretations.
Then legislative momentum emerged for an attempt to create a ``world-class regulator'' that would oversee the pair more like banks, imposing strict requirements on their ability to take excessive risks. Politicians who previously had associated themselves proudly with the two accounting miscreants were less eager to be associated with them. The time was ripe.
The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.''
What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.
If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.
But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.
That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''
Mounds of Materials
Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.
But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.M/P>
Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.
Clinton, the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than $75,000 from the two enterprises and their employees. The private profit found its way back to the senators who killed the fix.
There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.
Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.
UPDATE: Doug over at Director Blue put this excellent photo journalistic montage together:
Any Questions? hat tip LarwynFive years ago, Republicans proposed "the most significant regulatory overhaul in the housing finance industry [in a decade]." (Source: New York Times)
Democrats on the House Financial Services Committee blocked efforts at fixing Fannie and Freddie. Rep. Barney Frank (D-MA) said, "Fannie Mae and Freddie Mac... are not facing any kind of financial crisis,"
At least 18 times since 2001 Democrats blocked efforts at overhauling Fannie and Freddie even as accounting scandals and executive ripoffs became public.
Why? For starters, the top two recipients of Fannie and Freddie campaign donations were Democrat fatcats Chris Dodd ($165K) and Barack Obama ($126K) (Source: Open Secrets)
And Fannie Mae paid well. Clinton-era Democrats, serving as the CEO, CFO and Vice Chairman, paid themselves $200 million in only six years even while a $10 billion accounting scandal was exposed. (Source: Wall Street Journal)
And Democrats like Chris Dodd also got favorable loans under a "VIP program." Dodd alone saved over $75,000 on his mortgage payments. (Source: Conde Nast Portfolio)
So where are former Fannie Mae CEOs like Franklin Raines ($90 million in salary) and Jim Johnson ($21 million in salary in one year)? As you might expect, they're serving as Barack Obama's key economic advisers. (Source: Washington Post)
Hiring Fannie Mae's two former CEOs as economic advisers? Barack Obama: not ready to lead.
UPDATE: MUST READ: Barack’s Wall Street Problem is Now America’s Larry Johnson