Okay. Now somebody is not telling the whole story here. This September 17, 2008, article in the Washington Post, begins by stating this:
A decade ago, Sen. John McCain embraced legislation to broadly deregulate the banking and insurance industries, helping to sweep aside a thicket of rules established over decades in favor of a less restricted financial marketplace that proponents said would result in greater economic growth.
It goes on to state:
In 2002, McCain introduced a bill to deregulate the broadband Internet market, warning that “the potential for government interference with market forces is not limited to federal regulation.” Three years earlier, McCain had joined with other Republicans to push through landmark legislation sponsored by then-Sen. Phil Gramm (Tex.), who is now an economic adviser to his campaign. The Gramm-Leach-Bliley Act aimed to make the country’s financial institutions competitive by removing the Depression-era walls between banking, investment and insurance companies.
But there is no mention whatsoever of the following from the New York Times in September of 2003 and this is why the credibility of most of the media is at risk because they slant the story to say what they want it to say and not even try to give an overall truthful picture:
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By Stephen Labaton
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.
”There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,” Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.
Significant details must still be worked out before Congress can approve a bill. 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.
And it is more than a little disturbing that there was no mention of John McCain’s words before congress in 2006:
Federal Housing Enterprise Regulatory Reform Act of 2005
The United States Senate May 25, 2006 Sen. John McCain [R-AZ]: 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. I urge my colleagues to support swift action on this GSE reform legislation.
The Democrats killed this measure in Committee preventing the full Senate Vote.
Now, does this tell the whole story of what is happening to the housing and financial system in the United States? I’m sure it does not. Mostly what I hear is that it is “complex.” But it sure is unfair and misleading, to say the least, to note something that happened ten years ago without also stating what happened in 2003 and 2006. The truth is in there somewhere.
Check this link http://cbs2chicago.com/business/fannie.mae.franklin.2.703253.html for some interesting facts about the aforementioned Franklin Raines, former CEO of Fannie Mae, or just Google him. According to Wiki, Raines is currently employed by Barack Obama’s Presidential Campaign as an economic adviser. Recipients of Fannie Mae and Freddie Mac Campaign Contributions, 1989-2008 Top Three:
|Dodd, Christopher J
See all: http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html
September 19, 2008 update “In 2005– Barack Obama and the Congressional Black Caucus met with Fannie Mae for a “family” event. In 2005 Democrats also blocked reform of Fannie Mae” And this little piggy went to market. This video is a must see. click link below:
House of Representatives Committee on Financial Services: The Committee oversees all components of the nation’s housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities. The Committee continually reviews the laws and programs relating to the U.S. Department of Housing and Urban Development, the Federal Reserve Bank, the Federal Deposit Insurance Corporation, Fannie Mae and Freddie Mac…..
Chairman, Barney Frank (D) and members which include both democrats and republicans
U.S. Senate Committee On Banking, Housing, and Urban Affairs
Christopher Dodd, Chairman (D). Members, both democrats and republicans.
Posted: 09.17.08 Updated: 09.19.08 Updated: 09.24.08