Monthly Archives: August 2010

America’s Greatest Problem – Career Politicians

We can all disagree on what solutions to problems may be. We can never disagree with the historical facts, regardless of philosophy and political party affiliation, one cannot deny factual evidence.

America is in a financial meltdown. There are many opinions as to what caused this crisis. As in all things, there is ample evidence to point us in the right direction. Below are some facts as to what brought America to this point.

There are two politicians at the foot of whom this mess can be squarely placed. Representative Barney Frank, Democrat, Massachusetts and Chris Dodd, Democrat Senator, Connecticut. Though not the only ones involved or at fault, these are the power players, the ones that pulled most of the strings, benefited most and prevented oversight and the overhaul of Fannie Mae and Freddie Mac.

Chris Dodd

In 2008, Dodd appeared on Good Morning America and said:

“This was avoidable. This did not have to happen. Where were the cops on the beat? Where were the regulators? When these loans were being made they did nothing.”

Chris Dodd was the Senate Banking Committee chair. He was the one in the Senate that was in charge of overseeing the business of banking and the doings of Fannie and Freddie.

On March 30, 2009, this story ran in the New York Post, about Dodd. The story is a short list of scandals about favorable treatment and quid pro quo between Dodd and large donors, companies like AIG and Countrywide. Firms that are involved in the financial woes of America.

Barney Frank

Then, there’s Barney Frank. On 9/24/2008, Business & Media Institute published this piece concerning Barney Frank and his ties to Fannie Mae.

The two videos show Barney Frank contradicting himself concerning the same subject. Of course, these videos were some years apart. However, if one believes in something, such as home ownership by poor people, why and when would that thinking change?

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The New Hampshire Union Ledger also wrote about this, below is an excerpt of their story about Barney Frank:

“One month from tomorrow, U.S. Rep. Barney Frank, D-Mass., will be the keynote speaker at the New Hampshire Democratic Party’s annual Jefferson-Jackson dinner. It is a coveted and high-profile role previously filled by such notables as Hillary Clinton and Al Gore. The Democrats’ choice of House Financial Services Committee Chairman Barney Frank is, therefore, very revealing.

The party announced Frank as the keynote speaker on Sept. 11 — three days after the U.S. government took control of Fannie Mae and Freddie Mac, costing taxpayers untold billions. That takeover probably could have been prevented had Frank not worked to thwart every attempt to limit the risks taken on by the two government-sponsored mortgage giants.

For 16 years reformers in Congress have tried to improve oversight of Fannie Mae and Freddie Mac and prevent the government-chartered companies from putting the housing market and the whole economy at risk. All that time, Frank was involved in efforts to block those attempts, and in the last eight years he was a leader of those efforts.

In 2002, shortly before accounting irregularities were exposed at both companies, Frank said, “I do not regard Fannie Mae and Freddie Mac as problems,” The Wall Street Journal reported. After the Freddie Mac accounting scandal in 2003, Frank said, “I do not think we are facing any kind of a crisis.”

But there was a crisis, thanks in large part to Frank, Sen. Charles Schumer and others on the leash of these companies. In Congress, they made sure there was no additional oversight, no additional limit on executive behavior and compensation, and no further restraint on the growth of the companies’ mortgage-backed-securities portfolios, among other changes.

(All of these needed reforms, by the way, have been championed for years by Sen. John Sununu.)

In fact, Frank & Co. made matters worse by pushing Fannie Mae and Freddie Mac to take on greater risk. They wanted more loans to people who might not qualify for traditional bank financing. And, as The Wall Street Journal has pointed out, Frank “pressured regulators to ease up on their capital requirements — which now means taxpayers will have to make up that capital shortfall.”

Even now, after the government took the companies over (which Frank repeatedly said over the years was not a possibility), Frank opposes limits on the amount of money they can risk on mortgage backed securities — the one reform that might have done the most to prevent the current meltdown and probably would do the most to keep it from happening again.

Barney Frank is the very symbol of Washington’s deliberate refusal to prevent the collapse — the predicted collapse — of Fannie Mae and Freddie Mac. And this is the guy the New Hampshire Democratic Party showcases at its most prestigious annual event. That ought to tell you a lot right there.”

These are just a couple of examples of politicians gone bad. Are they bad people looking to exact harm on America? I don’t know them personally, I cannot make that judgment. What is certain  is that career politicians become arrogant and drunk with power as they “serve the people”. The longer they stay in office, the more this intensifies.

President George W. Bush warned of impending problems with Freddie and Fannie throughout his tenure. In 2008 alone, there were at least 17 warnings voiced but President Bush. People were very skeptical of the warnings by the then President, see the comments. Where these people are today and whether they are kicking themselves for these blind attacks, who knows, moreover, who cares.

The bigger point is that the warnings went unheeded and now, when the collapse is real, some would blame the person that sounded the alarm while giving the perpetrators a pass.