It’s easy for some folks to let their brain rest and blame Bush for the nation’s rapidly developing crap storm, but others might want to read a Sept. 14 article on the topic in the Washington Post.
The article plants the roots of the Fannie Mae/Freddie Mac crisis in Bill Clinton’s term as president and points out several contributing culprits including: Democrat Barney Frank, rank and file Republicans and Democrats and their leadership, Clinton, Bush, Fannie Mae/Freddie Mac executives and others.
Among the article’s primary observations: In 1992 a Republican (Jim Leach from Iowa) argued for stronger regulatory controls on Fannie Mae/Freddie Mac but a Democrat (Barney Frank from Massachusetts) argued for less regulation. Frank’s argument carried the day. (Snide remark from me: Hey Hillary, how come last week you said it’s “the Republicans” who are always against more regulation? Are “the Republicans” pretty much the primary cause of all evil in the world? Wasn’t your domineering father a Republican? Do you think your shrink might help you connect those dots?)
The article — written by Binyamin Appelbaum, Carol D. Leonning and David S. Hilzenrath — is a boiled down, dispassionate account of the rise and fall of Fannie Mae/Freddie Mac, which led to the current economic disaster. Read the article carefully and you can tell that numerous editors no doubt dissected and scoured each paragraph, sentence, quote and phrase in an attempt to create a balanced, bulletproof article that both Republicans and Democrats could read and honestly say, “Yeah, that’s pretty much how it happened.” (Snide remark No. 2. Scratch that word “honestly.” We are, after all, talking about Republicans and Democrats, neither of whom are much concerned with the truth as long as their party comes out on top, as is evidenced by the nation’s current problems.)
The Washington Post article concludes, “Finally, as the credit crisis escalated, Congress passed a bill two months ago establishing tough, new regulations for the companies [Fannie Mae/Freddy Mac]. It was too late.”
Yes indeed, too late.
Meanwhile, we’ve got Barack Obama in last week’s debate tracing the Fannie Mae/Freddy Mac problem to two years ago with no mention of the Democrats’ culpability. Instead, he blamed the Republicans for Fannie Mae/Freddie Mac, saying the Bush administration’s economic philosophy is “regulation is always bad.”
As of right now I’m still voting for Obama, but if he doesn’t clean up his act, you can expect political cartoonists who start nicknaming Obama and Biden “shuck and jive.”
The article also points out that in 1999, Clinton’s Secretary of the Treasury Lawrence Summers warned there could be trouble at Fannie Mae/Freddie Mac. “It was a signal moment,” the article states. “An administration official had said in public that Fannie Mae/Freddie Mac could be a hazard.” But by 2000, both political parties saw Freddie Mac/Fannie Mae as the engine for a financial boom and both companies “were increasingly impervious to even modest reform.”
Bush eventually wanted to increase regulations on Fannie Mae/Freddie Mac but a Republican (Robert F. Bennett of Utah) screwed that up when he pushed for weaker regulations and Bush pulled his support. Surprise, surprise: Bennett’s son was a deputy director of the regional Fannie Mae office in Utah and Fannie Mae was his second largest campaign contributor.
The article doesn’t attempt to prove one party was more guilty than the other in the Fannie Mae/Freddy Mac disaster, but it is interesting to note that Clinton had eight years to implement a congressional order for the two companies to keep more capital on hand as a cushion against losses. Clinton never implemented the rule but Bush did soon after taking office.
Anyway, read the Washington Post article and others if your mind is open enough to handle it, then decide for yourself how much blame Bush and the Republicans deserve.
Lynn Burton is night editor for the Aspen Daily News. He can be reached at lburton@aspendailynews.com.
Comments
the greedy fat cats of wall street
KNCB Moore
Trust but verify. Just give us the facts. Who are these greedheads ?
We are not talking about CEO salaries and golden 'chutes. What's missing
are the numbers of investors and the amounts of money they made.
Surely, the IRS has this info. Just give us the facts.
blame who?
this blame game is very trying, why not just get on with discussing who will best solve the problems at hand. yes i understand we must learn from our past mistakes but, this partisan bickering and finger pointing is doing no one any good.