Kevin Colby: News, culture, political blog

After I read this story, the Republicans deserved what they got this past election.  But we must start from the beginning of this economic mess.

President Clinton’s tenure was characterized by economic prosperity and financial deregulation, which in many ways set the stage for the excesses of recent years. Among his biggest strokes of free-wheeling capitalism was the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation. He also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. In 1995 Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods.   Read this 1999 NY Times article:  Fannie Mae eases credit to aid mortgage lending.

Second, in a 2003 NY Times article, the Bush administration wanted regulation on both Fannie Mae and Freddie Mac:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

I found the original bill that was intrduced as H.R. 2803: Housing Finance Regulatory Restructuring Act of 2003.

Rep. Edward Royce (R-CA) was the only sponsor, there were no co-sponsors and the damn bill never made it out of  committee which means it never even made it to the house to be voted on.  And guess why?  Because of major lobbying that was done by Fannie and Freddie, we’re talking $200 million in lobbying.

Which brings me to this story that I read today.

Lawyers hired by mortgage finance giant Freddie Mac are quietly investigating the firm’s own $2 million lobbying campaign, The Associated Press has learned. The lobbying effort helped quash proposed new regulations on the company before the housing market collapsed.

Back in 2005, the Bush administration tried again at getting oversight on Fannie and Freddie through the Federal Housing Enterprise Regulatory Reform Act of 2005 which was sponsored by Chuck Hagel (R-NE).

The inquiry inside Freddie Mac follows stories by the AP about the company secretly hiring Republican consulting firm DCI Group of Washington to stop a proposal in the Senate in 2005 sponsored by Sen. Chuck Hagel, R-Neb. The legislation would have forced Freddie Mac and Fannie Mae to sell hundreds of billions of dollars worth of assets from their portfolios of mortgages and mortgage-backed securities. At the time, the portfolios were highly lucrative but their value plunged when the housing market collapsed.

_An accounting of the work done for the $2 million in payments to the DCI Group. It targeted 17 Republican senators in 13 states working to defeat Hagel’s regulatory legislation by convincing prominent constituents and financial contributors the bill would hurt the housing boom. The measure was never brought to a vote and died.

Well thanks alot assholes!  I have been so ignorant this entire time and putting a substantial amount of blame on the Democrats and now the real truth finally comes out.   This one is really on the Republicans.   They had control of Congress and could have done something about it.   But, Democrats and Republicans are all the same.   They will screw their own kind for money and have no respect for the citizens that they are supposed to serve.  The people that were involved in this should be hung publicly!

Related Posts

• Sept. 2003 NY Times Article: New Agency Proposed to Oversee Freddie Mac and Fannie Mae
• Housing Finance Regulatory Restructuring Act of 2003
• Barney Frank is a fat ass liar and Bill O’Reilly is an idiot
• Fannie, Freddie spent $200M to buy political influence
• US Treasury has agreed to give Fannie and Freddie $200 billion a piece

Tags: bill clinton, chuck hagel, dci group, Democrats, Economy, fannie mae, freddie mac, george bush, housing collapse, newt gingrich, Republicans