The View From 1776

Campaign Vigorish More Important to Liberal-Progressives than Financial Prudence

Bush proposed tighter regulation of Fannie and Freddie five years ago; Democrat/Socialists opposed it.

Posted by .(JavaScript must be enabled to view this email address) on 09/20 at 12:49 AM
  1. It's Bush's fault. Congress has nothing to do with it. Facts don't matter. It's a market failure. Not enough regulation. We need more of what's failed in the past. There is never enough regulation. Don't talk about the Community Reinvestment Act, the Congressional responsibility to oversee the regulators or campaign contributions from the GSE's. FDR got the government into the mortgage finance business with the best of intentions. That's all that matters. History is bunk. Bushitler!!!
    Posted by .(JavaScript must be enabled to view this email address)  on  09/20  at  11:06 AM
  2. Yes, Bush was stopped from reforming Fannie and Freddie. But instead he put his own people in to run those agencies, party hacks and loyalist. They were Bush loyalist but poor administrators, which has been the norm for his administration, hence their demise. He also set the tone that enabled America's other financial tragedies.

    If Bush really had wanted to reform those agencies he would have put reformers in charge that would have transformed things from inside. Instead he gave the jobs to lap dogs. Thank God Bush was stopped from reforming Social Security, as he desperately wanted to do. Image what would have happened there?

    Isn't it fitting the George Bush is ending his rule with one of the greatest financial debacles in American history? It crowns his abysmal presidency. Sadly, there's still time for him to screw up something else.

    I wish Milton Friedman were alive to comment on recent events. I am glade the whole episode happened because it has helped put and end to the myth that the free market is the be-all and end-all. It also puts an end to the Reagan myth that government is not the solution but the problem. If you make it a self- fulfilling prophesy like Bush did, with his neglect and incompetence, then government is the problem.

    It is ironic that Bush has been the first MBA president. Just goes to show you that strictly MBA holders are not always the smartest people in the room. In his case a MBA was a very hollow achievement, like most of his other achievements. He should have also educated himself in other matters.

    In the last few months Bush has been looking shell-shocked, like he did after 9/11. Lucky now he has grown-ups running the show and cleaning up the financial mess he helped make, by not enforcing the regulations that were on the books.

    Under Bush and his conservatism America has become less attractive to the rest of the world than ever, and less relevant. When Bush started his presidency I believed he would put America and the world into a funk. Low and behold he did. I would suggest- I hope Charles Krauthammer is listening, that this adds a fifth mean to the 'Bush Doctrine', to bring grief to all of the world.

    When Bush was campaigning for the presidency he declaring that he was a uniter not a divider. However, most of the time he has been a divider. Ironically, though, this time, with the financial debacle he helped create, he has united the country with financial pain, along with the rest of the world.

    It is said that Washington has taken on the feeling of wartime because people there feel shell-shocked by the magnitude and cost of the financial mess America is in. Now, isn't that uniting? Surprisingly, though, that adds to Bush's self-proclaimed credentials that he is a Wartime President. However, most of the time, like in the past, he has been acting like Don Quixote and tilting at windmills.
    Posted by .(JavaScript must be enabled to view this email address)  on  09/20  at  12:30 PM
  3. Mr. Airth:

    You comment that:

    "Yes, Bush was stopped from reforming Fannie and Freddie. But instead he put his own people in to run those agencies, party hacks and loyalist. They were Bush loyalist but poor administrators, which has been the norm for his administration, hence their demise."

    That is not factual.

    The CEO of Fannie Mae during its explosive expansion into subprime mortgages and more exotic securitized investment vehicles was Franklin Raines, who was appointed by Bill Clinton. According to Wikipedia:

    "The son of a Seattle janitors [1], Raines graduated from Harvard University, Harvard Law School; and Magdalen College, Oxford University as a Rhodes Scholar. He served in the Carter Administration as associate director for economics and government in the Office of Management and Budget and assistant director of the White House Domestic Policy Staff from 1977 to 1979. Then he joined Lazard Freres and Co., where he worked for 11 years and became a general partner. In 1991 he became Fannie's Mae's Vice Chairman, a post he left in 1996 in order to join the Clinton Administration as the Director of the U.S. Office of Management and Budget, where he served until 1998. In 1999, he returned to Fannie Mae as CEO, one of just a few African American CEOs of Fortune 500 companies."

    According to the Freddie Mac website, its CEO during the same period was Richard F. Syron.

    "Mr. Syron was elected Chairman of the Board and Chief Executive Officer of Freddie Mac in December 2003.

    Prior to joining Freddie Mac, Mr. Syron was the Executive Chairman of Thermo Electron Corporation from November 2002 to December 2003. Mr. Syron was named to the Board of Thermo Electron in 1997. He became Chairman in January 2000 and was Chief Executive Officer from June 1999 to November 2002. He also served as President from June 1999 to July 2000.

    Prior to that, he served as Chairman and Chief Executive Officer of the American Stock Exchange from 1994 to May 1999, President of the Federal Reserve Bank of Boston from 1989 to 1994, and President of the Federal Home Loan Bank of Boston from 1986 to 1989."
    Posted by .(JavaScript must be enabled to view this email address)  on  09/20  at  01:54 PM
  4. A Federal Reserve banking cartel, fiat money and Government Sponsored Entities with implied taxpayer backing which are permitted to make campaign contributions to their defacto regulators are hardly institutions one would expect to find in a free-market economy. This was not a market failure.
    Posted by .(JavaScript must be enabled to view this email address)  on  09/20  at  05:28 PM
  5. Mr. Brewton,

    Why is it that these two CEOs you mentioned behaved so opaquely in the running of their corporation? Why did they misrepresent their earnings and balance sheets? I think it was due to the pervasive hubristic culture of the Bush administration and its tendency to fudge reality, which contaminated them. The Bush administration has had a corrupting and corrosive influence on government institutions, which helped weaken and erode the status of those to lending institutions.
    Posted by .(JavaScript must be enabled to view this email address)  on  09/20  at  11:15 PM
  6. Raines and Gorelick were Clinton appointees to FNM. 1998-2004 are the years covered by an OFHEO investigation regarding the 'book cooking' that occured directly related to the bonuses recieved by both. Had Bush replaced either it's likely he would have been accused of 'politicizing' the agency. Reforms were recommended by the administration and were soundly rejected by Barney Frank and Chris Dodd. The agencies are jokes, unable to stand up to the stress created by the easy money FED policies and the conflict of interest created by congresional 'oversight' without a firewall prohibting political contributions and intimidation common with GSE lobbyists. Bush's mistake was not fighting hard enough for reform while wedded to his 'ownership society' nonsense regarding residential real estate.
    Posted by .(JavaScript must be enabled to view this email address)  on  09/21  at  11:46 AM
  7. Kevin Hassett of Bloomberge.com News wrote how the Democrats created the financial crisis by not supporting reform legislation for Fannie and Freddy. But his analysis sounded a bit like a parable about 'the barn door been closed after the horse has left'. Even Kevin Phillips, author of "Bad Money'", who seems to be more knowledgeable about the whole thing and about the origins of this financial crises, doesn't make such an inditement. He spreads the blame over many events. Hassett's explanation is just too simple. The Democrats, in voting against reform for Fannie and Freddy, probably did exacerbate the problem, like many other components did before. But Democrats alone didn't create the problem. The seeds of the present financial crises were sown over many year and by many players.

    Phillips is a Republican. But in his laying blame he doesn't sound partisan, unlike Hassett who seems to be quite partisan and narrow-minded in his criticism and finger pointing. The View should listen more to people like Kevin Phillips in oder to get a more accurate picture of what's really going on.
    Posted by .(JavaScript must be enabled to view this email address)  on  09/22  at  03:53 PM
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