by Kathleen McKinley | April 20, 2010 8:21 am
I noticed in many of my comments that there are those on the left that seem to believe that it was Republicans that fought against regulation before our financial crisis.
Nothing could be further from the truth. So let’s let the Wall Street Journal takes us on a walk down memory lane (emphasis mine).
One chapter in this story took place in July 2005, when the Senate Banking Committee, then controlled by the Republicans, adopted tough regulatory legislation for the GSEs on a party-line vote–all Republicans in favor, all Democrats opposed. The bill would have established a new regulator for Fannie and Freddie and given it authority to ensure that they maintained adequate capital, properly managed their interest rate risk, had adequate liquidity and reserves, and controlled their asset and investment portfolio growth.
These authorities were necessary to control the GSEs’ risk-taking, but opposition by Fannie and Freddie–then the most politically powerful firms in the country–had consistently prevented reform.
The date of the Senate Banking Committee’s action is important. It was in 2005 that the GSEs–which had been acquiring increasing numbers of subprime and Alt-A loans for many years in order to meet their HUD-imposed affordable housing requirements–accelerated the purchases that led to their 2008 insolvency. If legislation along the lines of the Senate committee’s bill had been enacted in that year, many if not all the losses that Fannie and Freddie have suffered, and will suffer in the future, might have been avoided.
Why was there no action in the full Senate? As most Americans know today, it takes 60 votes to cut off debate in the Senate, and the Republicans had only 55. To close debate and proceed to the enactment of the committee-passed bill, the Republicans needed five Democrats to vote with them. But in a 45 member Democratic caucus that included Barack Obama and the current Senate Banking Chairman Christopher Dodd (D., Conn.), these votes could not be found.
Recently, President Obama has taken to accusing others of representing “special interests.” In an April radio address he stated that his financial regulatory proposals were struggling in the Senate because “the financial industry and its powerful lobby have opposed modest safeguards against the kinds of reckless risks and bad practices that led to this very crisis.”
He should know. As a senator, he was the third largest recipient of campaign contributions from Fannie Mae and Freddie Mac, behind only Sens. Chris Dodd and John Kerry.
With hypocrisy like this at the top, is it any wonder that nearly 80% of Americans, according to new Pew polling, don’t trust the federal government or its ability to solve the country’s problems?
Now, this is not to say that Republicans have halos or didn’t make mistakes as well. This crisis was decades in the making. We can argue the past all day long and point fingers at both sides, but when it comes to FreddieMac and FannieMae, the Democrats would have you believe the opposite of what is true.
As a visual to jog your memories, check out the videos linked below of Democrat Congressman Barney Frank and Democrat Congresswoman Maxine Waters telling Republicans that Freddiemac and Fannymae were fine and needed no new regulation. Thank goodness for youtube, right?
In a July 14, 2008 youtube news interview video of Barney Frank (that has since been removed) Barney Franks declares: “I think this is a case where Freddie Mac and Fannie Mae are fundamentally sound. They’re not in danger of going under. They’re not the best investment these days from a long term standpoint going back. I think they are in good shape going forward. They’re in the housing market. I do think their prospects going forward are very solid.”
In this video. Michael Moore (who I never thought I would use to prove my point) was on the Bill Mahr show with Congresswoman Maxine Waters and he pressed her, as she lied point blank to him.
MOORE: Well, let’s talk about regulation. One of the insti…the biggest institutions that’s failed this year was Fannie Mae and Freddie Mac. This is an institution that your friends, the Democrats… in fact you, Congresswoman, did not want to regulate…
REP. MAXINE WATERS (D-CA): …I believed…I believed…
MOORE: …you said it wasn’t broke, you said it wasn’t broke, you said it wasn’t broke five years ago at a Congressional hearing, and you took $15,000 of campaign contributions from Fannie and Freddie.
WATERS: …no I didn’t.
MOORE: Yeah, you did, it’s in the Senate (inaudible)…
WATERS: No it’s not.
MOORE: You took money from the PAC.
WATERS: Wait just a minute, just a minute…
MOORE: … and so did Barney Frank, and so did Chris Dodd.
WATERS: That is a lie and I challenge you…
WATERS: …to find $15,000 that I took from Fannie PAC…
As you can read at the link,The Center for Responsive Politics’ OpenSecrets.org reported on how much money members of Congress had received from Fanny and Freddy since 1989. Their report on September 11 said that Maxine Waters had indeed received $15,000 from Fannie and Freddie (and, as Michael Moore pointed out, so did Chris Dodd and Barney Frank). In fact current members of Congress received a total of $4.8 million from Fannie Mae and Freddie Mac, with Democrats collecting 57 percent of that.
And finally, here is the video of all videos of Mrs. Waters and other Congressmen getting all heated at even the suggestion that there is anything wrong with Fanny and Freddie.
So let’s let go with the false narrative that the collapse of Fanny and Freddy was caused by Republicans not wanting regulation.
Its was Democrats who refused regulation.
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