Obama Administration Makes “Last 8 Years” Official Scapegoat for the Next Four Years Posted by Former Author on 19 January, 2009 at 10:36 am. 11 comments already! [DELETED BY AUTHOR] scaramouche says: January 19, 2009 at 10:52 am Obama won’t even go visit wounded soldiers without a film crew. Craig says: January 19, 2009 at 4:02 pm Scaramouche, LOL! You have it right. But don’t worry, so far the troops doesn’t seems to be in the thank for THE ONE. Spit in the air and it all comes back in your face. Law of return, I guess. SoCal Chris says: January 19, 2009 at 7:14 pm Mike, if I might ask a question to you that isn’t related to the thread? It’s regarding the White House website that of course has been all about President Bush’s events and policies, etc., during his Administration. Will we be able to access the archives on President Bush after the transition to Obama, or if we’ve saved articles from that website, will we lose it after it switches to the new administration? In other words, do I have to literally copy and paste President Bush’s data/articles/photos, or will simply saving it keep the info accessible still? I did call the White House, and wasn’t too impressed with the information I received–he seemed to be a little indignant that I wanted access still to archives on Pres. Bush! He really didn’t seem to know, to be honest. My apologies for interrupting this thread–I just thought you’d have more info on this than I. Thanks! Mike's America says: January 19, 2009 at 7:37 pm That’s a good question Chris. I’m surprised however you got on the phone wasn’t able, or perhaps willing, to find out the answer. You might know that Clinton’s WH web pages are still maintained by the National Archives and I assume the Bush pages will be as well. However, will links work? I don’t know and rather doubt it. It’s a concern for me as I have linked a lot of the recent WH documents and photos. I guess we will find out at Noon EST Tuesday. SoCal Chris says: January 19, 2009 at 8:20 pm Thanks, Mike. I am concerned about this, so guess I’ll be busy between now and tomorrow morning! The only thing the man on the phone (at the WH) suggested when I called was georgewbush.archives.gov, I believe is what he said, and it didn’t bring up what I was expecting or hoping for, so I don’t know who else to ask. I’m thankful for all the info you’ve posted on FA for this reason. I’m kind of an historian of sorts as well, so it’s important to me. sigmundringeck says: January 19, 2009 at 9:29 pm The height of stupidity must be to vote into power the party to solve the financial disaster that that party is largely responsible for in the first place. I really grieves me to see how bad america has screwed itself over this round. Mike's America says: January 19, 2009 at 9:56 pm “The height of stupidity must be to vote into power the party to solve the financial disaster that that party is largely responsible for in the first place.” A lot of people here have been scratching their heads over that one too. We just didn’t do a good enough job of getting out the facts. It’s hard when no matter what you say or do it’s not going to be reported fairly. And there are always folks like Larry Weisenthal willing to pull the wool over their OWN eyes and believe that somehow Democrats are not to blame. Oh well. The time when Larry can make excuses for Democrats is coming to an end. That is unless the “news” media continues to let the Obamatons get away with the “it’s Bush’s fault” slime ball tactics. blast says: January 20, 2009 at 6:39 am scaramouche: The height of stupidity must be to vote into power the party to solve the financial disaster that that party is largely responsible for in the first place. Oh, and President Bush and his administration had less responsibility than the Democrats? That is a view not based on facts. Mike's America says: January 20, 2009 at 9:40 am FACTS: Just the Facts: The Administration’s Unheeded Warnings About the Systemic Risk Posed by the GSEs White House News For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President’s repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems. 2001 April: The Administration’s FY02 budget declares that the size of Fannie Mae and Freddie Mac is “a potential problem,” because “financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity.” 2002 May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02) 2003 January: Freddie Mac announces it has to restate financial results for the previous three years. February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that “although investors perceive an implicit Federal guarantee of [GSE] obligations,” “the government has provided no explicit legal backing for them.” As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. (“Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO,” OFHEO Report, 2/4/03) September: Fannie Mae discloses SEC investigation and acknowledges OFHEO’s review found earnings manipulations. September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact “legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises” and set prudent and appropriate minimum capital adequacy requirements. October: Fannie Mae discloses $1.2 billion accounting error. November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any “legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk.” To reduce the potential for systemic instability, the regulator would have “broad authority to set both risk-based and minimum capital standards” and “receivership powers necessary to wind down the affairs of a troubled GSE.” (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03) 2004 February: The President’s FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: “The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator.” (2005 Budget Analytic Perspectives, pg. 83) February: CEA Chairman Mankiw cautions Congress to “not take [the financial market’s] strength for granted.” Again, the call from the Administration was to reduce this risk by “ensuring that the housing GSEs are overseen by an effective regulator.” (N. Gregory Mankiw, Op-Ed, “Keeping Fannie And Freddie’s House In Order,” Financial Times, 2/24/04) June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying “We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System.” (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04) 2005 April: Treasury Secretary John Snow repeats his call for GSE reform, saying “Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system.” (Secretary John W. Snow, “Testimony Before The U.S. House Financial Services Committee,” 4/13/05) 2007 July: Two Bear Stearns hedge funds invested in mortgage securities collapse. August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying “first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options.” (President George W. Bush, Press Conference, The White House, 8/9/07) September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before. September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before. December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying “These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I’ve called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon.” (President George W. Bush, Discusses Housing, The White House, 12/6/07) 2008 January: Bank of America announces it will buy Countrywide. January: Citigroup announces mortgage portfolio lost $18.1 billion in value. February: Assistant Secretary David Nason reiterates the urgency of reforms, says “A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully.” (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08) March: Bear Stearns announces it will sell itself to JPMorgan Chase. March: President Bush calls on Congress to take action and “move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages.” (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08) April: President Bush urges Congress to pass the much needed legislation and “modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes.” (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08) May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further. •”Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans.” (President George W. Bush, Radio Address, 5/3/08) •”[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator.” (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08) •”Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans.” (President George W. Bush, Radio Address, 5/31/08) June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying “we need to pass legislation to reform Fannie Mae and Freddie Mac.” (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08) July: Congress heeds the President’s call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing. And during this time Republicans in Congress were also proposing reforms which Democrats blocked. John McCain warned us this would happen when he cosponsored a Senate bill in 2005 that might have averted the current crisis: “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 26, 2005 And where was Obama during this time? He was at the bank cashing checks from Fannie Mae, Freddie Mac, Shearson Lehman brothers. All of whom went bust due to bad management and poor oversight leaving the taxpayers stuck with the bill. Shouldn’t Obama be called upon to return those millions in campaign contributions to the stockholders of these companies? 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 Fannie Mae and Freddie Mac together hold or own up to FIVE TRILLION DOLLARS in mortgage debt. That’s more than half the total of the current U.S. national debt. Their failure is what has sparked the world financial crisis and the blame lies solely with the Democrats in Congress who shielded them from reform for years while Democrat party hacks running the companies enriched themselves. (it’s a Democrat scandal as I described here). Looking back to the root of the problem Wayne Barret describes how the snowball started: Andrew Cuomo and Fannie and Freddie How the youngest Housing and Urban Development secretary in history gave birth to the mortgage crisis By Wayne Barrett The Village Voice Tuesday, August 5th …Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country’s current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded “kickbacks” to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why. Republican Reforms Blocked by Democrats In the year 2000 Congressman Richard Baker (R-La.) then the chairman of the House subcommittee that had jurisdiction over Fannie and Freddie introduced legislation to more tightly regulate the mortgage giants. The bill never saw the light of day. Congresspersons from both parties receive contributions from Fan & Fred (the list) and collectively they spent $174 million lobbying Congress the last ten years. The result of Rep. Baker’s legislation would not have been a surprise to Rep. Paul Ryan (R-WI) who had proposed tighter regulation in the 1990’s only to find a highly paid Fannie Mae lobbyist stalking him at events in his district and who played hardball by directing calls to every mortgage holder in the Congressman’s district falsely implying that Ryan meant to raise their rates. Republicans Try Again In 2004 another attempt was launched. The Senate took up a measure put forwarded by Senate Banking Committee Chairman Richard Shelby (R-AL) only to have it blocked again by Fan & Fred using Democrats as a partisan attack machine: Fannie and Freddie chose to fight legislation in the Senate Banking Committee that embodied the administration’s minimum requirements, particularly the receivership provision, in the late spring of 2004. The companies called in their chits and managed to obtain solid Democratic opposition to the bill crafted by the committee’s chairman, Richard Shelby (R-Ala.). The committee also watered down the receivership provision. The partisan nature of the vote to send the bill to the floor virtually assured that it would not be taken up in the Senate unless Fannie and Freddie relented in their opposition … but Fannie and Freddie would not budge. It may be that the [Fan&Fred] were banking on the defeat of President George W. Bush and on the assumption that a Democratic president would abandon the effort to pass tougher regulation. If that was their thinking, it was an exceedingly costly error. In the last year of the Republican Congress House GOP leaders were determined to try again. They put forward H.R. 1461 [109th]: Federal Housing Finance Reform Act of 2005. The bill would have stripped control of Fan & Fred from the Housing and Urban Development Department where Cuomo had turned it into a regulatory farce. The bill would also introduce “anti advocacy provisions” barring money from Fan & Fred being used as a slush fund for liberal lobbying organizations. Despite Democrat opposition to that measure the bill passed the House, but could not get a vote in the Senate even after the anti-lobbying provision was removed. John McCain was one of three Republicans in the U.S. Senate to sponsor the bill. Rising to propose the legislation Senator McCain’s words now sound prophetic: Senator McCain Speaks in Support of The FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005 The United States Senate May 25, 2006 Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal. The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac. The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform. For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay. I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. 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. McCain took action in 2005 that might have helped us avoid the severity of this current financial crisis. Democrats also took action in 2005 and stopped McCain’s reforms. sigmundringeck says: January 20, 2009 at 2:17 pm Ask anyone who works in finance in Europe or SEAsia and they can roughly tell you who is to “be blamed” for this mess. But they have to be neutral parties who aren’t quasi-religious fanatics supporting Obama or of that ilk. You americans owe us chinese about 1 trillion dollars. I think that would qualify us if we politely ascribe blame where it really should belong. Mike's America says: January 20, 2009 at 3:05 pm I just wonder if you Chinese are going to loan us another $4 trillion over the next four years to pay for Obama’s vote buying scheme knowing full well that the money you loan us will be repaid with dollars that are worth less than the ones we borrowed? Neither Obama nor Joe Biden know the first thing about economics (unless they covered that in the community organizer training program) so I doubt they will be thinking of such things.