Funny how these Democrats blame Bush for the Fannie Mae crisis: (h/t Hot Air)
“The turmoil on Wall Street is further evidence that Republican economic policies have failed. During eight years of control in Washington, Republicans put in to practice their belief that markets should be allowed unfettered freedom and drastically weakened oversight,” House Majority Leader Steny Hoyer, D-Md., said in a statement.
“In the midst of a dire economic situation, President Bush this morning characterized recent market developments as an ‘adjustment’ that can be painful for investors and employees of the firms, while Senator McCain said the ‘fundamentals of our economy are strong,’” Pelosi said. “President Bush, Senator McCain, and their Republican Party are out of touch and apparently ill-equipped to get our economy back on track.”
“I certainly don’t fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to,” Obama said, adding, “It’s a philosophy we’ve had for the last eight years – one that says we should give more and more to those with the most and hope that prosperity trickles down to everyone else.”
But there is one teeny itty bitty bit of information they are all forgetting. From September 11, 2003:
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 new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
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.
So Bush understood the crisis was coming and tried to stop it at the pass. Who got in the way? The Democrats:
Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.
But now they want to blame it all on Bush. Just like they will most surely do when Social Security goes belly up. He tried, but they forced it to fail and now they reap the whirlwind.
IBD gives us another history lesson:
But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street’s most revered institutions.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory.”
Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the ’90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.
Democrats, trying to rewrite history once again.
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