Wednesday, April 22, 2009

Bush, McCain Warned of Economic Crisis; Obama Ignored

Be sure to watch this video before YouTube pulls it!

As far back as the Clinton administration, Republicans, particularly John McCain, and later officials of the George W. Bush administration, warned Democrats of an impending housing market problem due to the politicalization of Fannie Mae and Freddie Mac.

Beginning in April 2001, the Bush administration complained that the size of the two quasi-governmental entities, coupled with a troublesome regulatory environment inherited from the Clinton administration (i.e., the subprime loan initiatives rammed through Congress by Clinton and the Congressional Black Caucus), portended a "potential problem" which could lead to "strong repercussions in financial markets" if not immediately addressed.

In 2003, the Bush administration upgraded its warning concerning the two housing giants to the status of "systemic risk," indicating that problems with the two would likely extend beyond the housing market itself and have a detrimental effect upon the entire American economy. That year, Treasury Secretary John Snow was pushing Congress to more actively exercise its regulatory powers over both Fannie Mae and Freddie Mac, asking for a regulatory agency that would focus on "the safety and soundness of their activities."

Democratic Congressman Barney Frank (MA), however, who had already placed one of his homosexual lovers, Herb Moses, in a leadership position at Fannie Mae, oddly enough as Assistant Director of Product Initiatives (a position that had direct oversight of subprime lending programs), indignantly insisted to Snow that "Fannie Mae and Freddie Mac are NOT in a crisis." In fact, Frank insisted that the role of the federal government was to encourage more subprime lending to minority and low-income homebuyers.

Frank said, "The more people... exaggerate the [lack of] safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see... we see entities [Fannie Mae and Freddie Mac] which are fundamentally sound financially... and even if there were a problem the federal government doesn't bail them out [HUH?!?!?!?, ed.], ... then the less I think we see in terms of affordable housing." Emphasis added.

In 2005, Fed Chairman Alan Greenspan warned, "Enabling these institutions to increase in size - and they will once the crisis in their judgment passes - we are placing the total financial system of the future at a substantial risk." Greenspan specifically tied the potential insolvency of Fannie and Freddie, and consequent meltdown of the financial system, to the lack of a responsible regulatory regime.

John McCain, in a Senate speech in 2006, stated, "For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac... and the sheer magnitude of these GSEs [Government-Sponsored Entities] and the role that they play in the housing market.... [Fannie Mae and Freddie Mac] need to be reformed without delay."

Once again, the incompetent Marxist social engineering of Democrats has backfired. The housing market crisis that precipitated the wider financial meltdown was wholly the product of the Maoist thinking of Bill Clinton and the Congressional Black Caucus, and was roundly defended by such liberal blunt objects as Barney Frank and Charles Schumer.

Who saw clearly what was happening? Why, of course, those whom the Democrats ignored at the time of their warnings but find the cojones to blame now! George W. Bush, John McCain, Alan Greenspan.... Note, however, that almost as an afterthought, the reporter announces that, on what could have been the most significant legislation on the issue, Obama "did not weigh in."

What are the odds that Obama and his bunkies are going to solve the problem that they were not wise enough to see in the first place, in spite of all the warnings and signs to the contrary?

Not likely.

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