To say “We now know the details of the Senate opposition” is absurd despite Scott’s tepid endorsement.

-Scott

Little follow up:

http://ap.google.com/article/ALeqM5jRzoY3Qvz0l_IFNXguiYMSK9ur5AD93TNP1O0

Basically, it was Bill Frist who ultimately “blocked” the Senate bill. There were 25 Republican Senators who signed Senator Hagel’s letter and 29 Republicans who did not sign it, including not only the then-GOP majority leader (Frist), but also the current GOP minority leader (Mitch McConnell).

We now have the complete story of the 2005 attempts to regulate Fannie Mae. A regulatory bill passed in the House, with a majority of Democrats joining with a majority of Republicans to approve the bill, despite speeches against the bill by Barney Franks and Maxine Waters. Some Democrats said dumb things, but a majority of Democrats voted in favor. According to the Bill’s sponsor, Republican Michael Oxley, the bill was opposed by the Bush White House and by the Senate.

We now know the details of the Senate opposition. (story above).

My conclusion remains that the title of this thread is incorrect. The Democrats did NOT “block” financial reforms in 2005. Which is precisely why neither John McCain nor any Senate Republican running for re-election (including Mitch McConnell) is making that charge. McCain said that he signed a letter supporting reform. We now know what the letter was. And we now know why it didn’t go anywhere.

- Larry Weisenthal/Huntington Beach CA

Well, don’t be a stranger. I, for one, found your comments to be thought provoking. And opposing opinions alway demands rechecking your base information for their merits… and inspiring more research. Being a research junkie, I’m always appreciative of being challenged with one that presents cogent dissenting arguments.

BTW… hope you and the group come up with some serious inroads into curing the big “C”. It’s an admirable quest.

- Larry Weisenthal/Huntington Beach, CA

I realize you simply prefer NOT to allow any blame to be cast on the Dems and you are an enabler of the tricks they pull.

So be it.

I’ve presented my side in detail and you haven’t given me anything that casts doubt (other than your own) on my conclusions.

You’ve got to be kidding, right? McCain has been saying it everywhere he can. Are you deaf or what? Didn’t you see all the videos? Didn’t you watch the debate last Tuesday? Come’on, get real! Even Bill Clinton said it and blamed the Dems.

This bill was actively opposed by the White House, as expressly stated by Oxley. I’m personally certain that the main opposition to the House-passed bill was from the Senate Republicans, as the majority of the House Democrats supported the bill, but only a (substantial) minority of House Republicans. My understanding is that the Senate Republicans wrote their own, alternative bill, for which they were unable to find sufficient support.

It isn’t likely that only a minority of House Republicans would have supported the House bill with a majority of Democrats supporting and then the situation would not just be the reverse in the Senate, but that Senate Democrats would be in such opposition to a bill passed in the House with a majority of Democratic votes that they could actually “block” the bill with a filibuster threat.

I mean, don’t you agree with me on this? What happened, precisely, in the Senate remains opaque, but, on the basis of available information presented on this thread, it’s neither credible nor fair to claim that Democrats “blocked” Fannie Mae regulatory reforms in 2005. I again repeat that no Senate Republican, including McCain, has ever made this charge, despite the fact that they obviously have every motivation to do so, were it, indeed, true, which it certainly is not.

In contrast to the House action in 2005, in which Fannie Mae regulatory reform was passed with strong Democratic majority support, all we have from anyone else during that entire period of GOP congress control between Jan 1995 and Jan 2007 are speeches and press releases. The fact that some individual House Democrats were caught on CSPAN saying dumb things is much less important than the fact that the House Democrats supported improved Fannie Mae regulation in 2005 (authored by a Republican) by a strong majority vote.

- Larry Weisenthal

There’s just a couple of things that I wanted to address in brief. Larry, INRE your comments from #125:

The floated a different bill, instead, and the Republican sponsor of the House-passed Fannie Mae regulatory bill (Rep. Michael Oxley) claimed his bill was opposed by White House “ideologues” (his word) who wanted to privatize Fannie and Freddie and who opposed a bigger government role.

Technically, Fannie and Freddie are already privatized in their operations, but are a GSE… meaning optionally government backed. But it was never a guarantee… But today, we realize they did guarantee it.

S190 created a new regulatory agency, wresting away it’s current oversight under HUD… and gave that new regulatory agency authority to address some, today, familiar issues like golden parachutes, risk assessment criteria, capital levels, etc. This does not sound like a WH who wanted to further privatize Fannie/Freddie…. but rather like a WH and Senate who wanted more govt oversight of the GSEs.

A final bipartisan regulatory bill passed by a huge margin. But this bill was killed — truly killed — by the Republican controlled Senate, who obviously did not make a priority of putting together a regulatory bill which would be acceptable to the majority of both Houses of Congress and which the President would sign.

You originally said the WH preferred the Senate bill, Larry. In which case the GOP was likely to have constructed it within the framework they felt the WH would not veto. If that passed, the House and Senate could have worked together to reconcile the differences for Presidential signature/veto.

While I agree there is ample blame for both parties in this whole mess over the 13 years of it’s growth to the financial tumor it is today, I can’t see this Senate bill being a GOP failure entoto. With likely 100% of the DNC opposed, it only took a few GOP to oppose it for it’s demise.

And yes… I will agree witih your last paragraph that had any of these elected bozos had a crystal ball to see today’s times, they might have acted differently. But the point is, they carry significant power to affect our nation. And frankly, I think all of them took that responsibility far too lightly, assuming they could not cause this collapse.

I will, however, remain to agree to disagree with you on Wall Street masters of the universe being the prime culprit here. I believe Congress created an environment of easy money/credit, promoted risky loans for minority home ownership, and the market took over from there. And I also blame a very undisciplined, gimme “stuff” oriented society who thought they could live forever outside of their financial means.

So just as the DNC and GOP must share blame, so must the consumer.

Last, in your comment #123, Larry:

Note that the House bill was actively opposed not by the Democrats, but by the Senate Republican leadership, the Bush administration, and also by the Wall Street Journal editorial page.

I did not see where Oxley expressly stated “Senate Republican leadership”. He said:

The bill encountered opposition in the Senate, in the administration, and on the Journal’s editorial page.

That opposition was certainly by the DNC, and quite likely some GOP since they did not get the majority verbals to forward it to the floor for a vote. But that may not have been “leadership”.

But fact remains, DNC opposed fixes and not enough GOP overrided them when they had a majority. But also, if enough DNC would have supported reform, this could have been accomplished. So we are still blaming a small segment of GOP, and the bulk, if not all of the DNC.

Now, there were elements of this bill which the White House and Senate Republican leadership didn’t like. So the Republicans killed the House Fannie Mae regulation bill in the Senate. The floated a different bill, instead, and the Republican sponsor of the House-passed Fannie Mae regulatory bill (Rep. Michael Oxley) claimed his bill was opposed by White House “ideologues” (his word) who wanted to privatize Fannie and Freddie and who opposed a bigger government role.

Now, you claim that Democrats “killed” this latter bill. You’ve yet to provide the slightest bit of evidence to support this charge. Not a single Republican Senator, including John McCain has made this charge. Given the very high level of GOP support in the House for the Oxley bill, it is entirely plausible that there were insufficient GOP Senate votes to support the bill. What typically happens when there is a disagreement between House and Senate bills, there are meetings and compromises to hammer out a deal. Obviously, the majority of Democrats didn’t oppose substantive regulation of Fannie Mae, despite the exisistence of old CSPAN clips of a few House members saying stupid things from time to time. The obvious truth is that no one — President, McCain, Senate leadership — cared enough circa 2005 – 2006 to do a deal with the House to reform Fannie Mae regulation.

So both Democrats and Republicans favored Fannie Mae regulation. Talk is cheap. Getting the votes is what counts. Fannie Mae regulation was favored in the House by a Democratic majority and a strong Republican minority. A final bipartisan regulatory bill passed by a huge margin. But this bill was killed — truly killed — by the Republican controlled Senate, who obviously did not make a priority of putting together a regulatory bill which would be acceptable to the majority of both Houses of Congress and which the President would sign. The Senate Republicans could have passed a strong regulatory bill along the lines of the House bill. They chose not to do so.

My own position is bipartisan. I don’t blame Republicans. I don’t blame Democrats. Everything is 100% clear in retrospect. Had Senate Republicans and the President realized in 2005 what was going to happen in 2008, I’m sure they’d have done a deal with the House to pass regulatory reform. I’m sure that Bush would have actually made an effort to achieve regulatory reform in 2003, rather than simply phoning in a press release and dropping the subject. I’m sure that Clinton would have twisted a lot more arms. I’m sure that all the banks who bought mortgage backed securities because they thought they were going to make a lot of money wouldn’t have done so. And that brings us to the proximate cause of this global debacle: the Wall Street Masters of the Universe were the proximate cause.

- Larry Weisenthal/Huntington Beach, CA

It’s become abundantly clear that you simply refuse to accept ANY responsibility on the part of Democrats for blocking the reforms that McCain and others proposed which would have saved us from this catastrophe.

As I said, it was Democrats, on a strict party line vote, who voted against S190 in committee.

At the time, McCain’s was warning of what could happen if no action was taken:

“If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”
– John McCain, May 25, 2006

Your willingness to provide cover for Democrats is truly remarkable. But it is also unfortunate, as it means there will likely never be the kind of accountability in this situation that is necessary if we are to move forward. Worse yet, your deliberate obfuscation is an enabler for Democrats to continue doing more of the same.

The record here is clear: Republicans put up multiple legislative proposals, all of which were shot down mostly by Democrats.

One letter from Mike Oxley doesn’t alter that fact.

http://wsj.net/article/SB121746628592499215.html?mod=todays_us_opinion

>>In “Paulson’s Fannie Test” (Review & Outlook, July 15), you editorialize, “Had Treasury and Congress acted two years ago, or even three or six months, the current panic could have been avoided.” In fact, the House did act. After a successful committee vote, we passed strong, freestanding GSE reform legislation, H.R. 1461, in the House on Oct. 26, 2005, with a bipartisan vote of 331-90. The bill encountered opposition in the Senate, in the administration, and on the Journal’s editorial page. It died in the Senate.

>>I am proud that the Financial Services Committee acted while the housing economy remained robust. In a noncrisis atmosphere, we produced legislation that would have created a stronger regulator with new powers to increase capital, to limit portfolios, and to deal with the possibility of receivership. Had our legislation become law in 2005, a world-class regulator would have been in place, providing better oversight prior to and during the market downturn.

>>Michael G. Oxley
Washington

>>Michael G. Oxley was chairman of the House Financial Services Committee from 2001 through 2006.<<

Note that the House bill was actively opposed not by the Democrats, but by the Senate Republican leadership, the Bush administration, and also by the Wall Street Journal editorial page. This is a smoking gun for “smoking aces.” It proves that a bill to regulate Fannie Mae in 2005 was indeed “killed” in the Senate. But by REPUBLICANS, not by Democrats.

By the way, I listened carefully in the debate for McCain to make the charge that Democrats “killed” legislation to regulate Fannie Mae. He never came close to making such a charge.

I’ll address the arguments most recently made by Mata later on.

What do you guys think of McCain’s proposal to buy out bad mortgages and re-sell them to the original purchasers at current (reduced) market value, with the government picking up the tab for the difference?

- Larry Weisenthal

Back later. Post debate.

You don’t need to go with the personal insults, Mark. It doesn’t help clarify anything.

I’ll continue discussing/debating with Mata, as long as she approaches this at the honest difference of opinion level. Perhaps she’ll ultimately establish that I’m misinformed or in error. Perhaps not. But life is too short to get involved in pissing contests.

You obviously don’t agree with me, but I’m no “snake.” I stand up for that which I believe by signing my own name. I’m not some annonymous DNC operative or anything like that. Simply a private citizen, entitled to have his own point of view and seeking to discuss this with others. I’m an open book. You can Google me. Good grief…”snake”? The only people welcome on your blog are those you share your point of view? Why didn’t you post a warning to that effect and spare both you and I the aggravation?

- Larry Weisenthal/Huntington Beach, CA

Very smart answer and very well sustained. You have patience with manipulators like Larry. He doesn’t fool me though with his apparent respect… it’s a cover-up. I prefer idiots like Dave, Doug, and Fit Fit and alike… they are less hypocrites. The snake-type like Larry is the worst, much more dangerous, because nobody sees him coming with his misinformation. Keep the good work Mata, don’t let Larry get away with his BS.

/26/2005–Introduced.
Federal Housing Enterprise Regulatory Reform Act of 2005 – Amends the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to establish: (1) in lieu of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development (HUD), an independent Federal Housing Enterprise Regulatory Agency which shall have authority **over** the Federal Home Loan Bank Finance Corporation, the Federal Home Loan Banks, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac); and (2) the Federal Housing Enterprise Board.

Sets forth operating, administrative, and regulatory provisions of the Agency, including provisions respecting:
(1) assessment authority;
(2) authority to limit nonmission-related assets;
(3) minimum and critical capital levels;
(4) risk-based capital test;
(5) capital classifications and undercapitalized enterprises;
(6) enforcement actions and penalties;
(7) golden parachutes; and
(8) reporting.

Amends the Federal Home Loan Bank Act to establish the Federal Home Loan Bank Finance Corporation. Transfers the functions of the Office of Finance of the Federal Home Loan Banks to such Corporation.

Excludes the Federal Home Loan Banks from certain securities reporting requirements.

Abolishes the Federal Housing Finance Board.

Now… wanna try again? And this time, provide links to what bill you think you’re discussing, and we might be able to sort out communication differences. You’ll find GovTrack a terrific site.

I dismiss Bernanke because he was in the politically delicate position of not being able to call a spade a spade when discussing the cause. If he needs Congressional approval for his and Paulson’s proposed government take over, he’s not likely to get it if he points fingers at them and says “it’s *your* fault”, is he? One has to lend more credibility to those who are removed from the cause and the fix.

Secondly, Traiger’s data is dated. There’s been a lot of events since Feb 2008. Also, again, you need to get removed from involvement. When their entire business revolves around CRA banking clientele, what they display on their website will be edited to fit that clientele. So I use economic publications like Agora, Financial Times, Investors Business Daily, etal. These are neutral third parties.

As far as HuffPo goes… it’s hard to lend anything of substance to a link that’s titled “Fox News: Barney Frank Escaped Blame for Fannie Mae’s Problems Because He Is Gay”… which of course is not the title of the Fox piece. Nor did they provide a link to the Fox piece they were slamming.

Frankly, I give the National Enquirer more credibility than HuffPo. It’s a toilet cyber tabloid with fake headlines. Not to mention quite a group of “ugly Americans” that comment there.

Now, if you provide the original link to the article they are revamping in their own blog trash, I can live with that.

That said… as you can see, I go to your links. I do, however, find your news sources extremely bizarre choices. But, as you can see, I still respond to them… and provide direct sources (such as bill history, text). And you’ll also note that in my posts, I link to neutral specialty sources… not cyber tabloids.

As far as refuting Barney Frank in the HuffPo piece, where he says he wasn’t in the position to do anything until 2007…. uh, would that be the same Barney Frank who said:

House Financial Services Committee hearing, Sept. 10, 2003:

Rep. Barney Frank (D., Mass.): I worry, frankly, that there’s a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . . .

~~~

House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .

~~~

House Financial Services Committee hearing, Sept. 25, 2003:

snip the other DNC bozos making fools of themselves here and going for Frank…

Rep. Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated?

Mr. Raines?

Mr. Raines: No, sir.

Mr. Frank: Mr. Gould?

Mr. Gould: No, sir. . . .

Mr. Frank: OK. Then I am not entirely sure why we are here. . . .

Rep. Frank: I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists.

Or perhaps, if you don’t want to believe the printed quotes from the WSJ, you might like to hear it from the horse’s mouth how the DNC was arguing with FHEO and regulators how Fannie/Freddie weren’t in trouble, when notable members of the GOP were saying the opposite.

Now I can’t defend the GOP who sided with the DNC. But with 100% of the DNC on the Fannie/Freddie side, plus renegade GOP, the GOP majority couldn’t evoke the reform.

Below… for your viewing pleasure …. the horses’ mouths in action.