Originally Posted by Howitzer
(Post 1988091)
Here's how we got here!
There is a whole lot of finger pointing going on in the world of
politics this week. For those of you who would rather stay in the
dark....., stop reading. I would never want to upset your political
party's talking points and ruin your day. But for those who just enjoy
history or want to understand how or why we got to this point in
financial chaos:
* 1938 Roosevelt got through a democratically controlled congress
Fannie
Mae.
* 1970 Freddie Mac was created by democrats in congress 57-43
Senate and 234-192 House.
* 1977 the Community Reinvestment Act was passed by the democratic
congress
(61-39 Senate and 292-143 House) and signed into law by Jimmy
Carter. It
encouraged banks and mortgage lenders to loan money for housing
to people
who would not otherwise qualify (with Freddie and Fannie backing
same by
taking the paper).
* 1995 President Clinton signed the executive order mandating
lenders expand
their lending for mortgages to sub-prime borrowers (that means
people who
would not qualify under any criteria in a sane world). Failure
to do so
would result in the lending institution not having access to
federal funds
or the quasi governmental Fannie and Freddie.
* 1999 Republican Senator Phil Gramm pushed through congress
deregulation laws (Gramm-Leach-Bliley Act) removing Depression era
laws separating banking, insurance and brokerage activities. (a really
stupid move...)The vote in the Senate was 98-1-1. McCain was the one
who did not vote, another republican was the lone no vote. Biden and
Harry Reid, who are now saying it's all Bush's fault, voted for the
bill. Even Obama this week places the blamed on Gramm, but fails to
mention that his running mate voted for it, and Clinton signed it into
law.
* 2003 President Bush tried to get congress to amend Fannie Mae
and Freddie Mac rules to disallow loans to people who would not
qualify under normal lending institution rules for making loans. In
other words, rescind the Clinton Executive order which had by now
become the rules of Freddie Mac and Fannie Mae. The democrats in the
Senate (48) used the threat of filibuster to kill the bill (got to
have that magic 60 in the Senate to stop a filibuster).
* 2006 Greenspan testified before congress that Fannie Mae and
Freddie Mac were both a house of cards and needed a lot more oversight
and controls in case this country found itself in a recession in the
future. That duty falls to the U.S. Senate Committee on Banking,
Housing and Urban Affairs. Democrat Chris Dodd is Chairman. He wasn't
thrilled with Greenspan's advice, because he was the number one
campaign money receiver from Fannie and Freddie over the years. Obama
was number 2, and he raked his largess in two years.
* Now Dodd is saying he may go for the 700 billion, but he wants
more oversight, which he had in the first place, but doesn't want to
point his finger at himself for not doing his job, even when told
there was a big problem.
* Every single piece of legislation the republicans have put up to
regulate the financial industry since 2000 has been killed in the
senate by democrats.
* 95% of the homeowners are paying their monthly mortgage
payments. It's those 5% that are facing foreclosure that will cost the
taxpayers a trillion or so if the bailout goes through. This "toxic"
5% is the basis for the $700 billion figure.
But when the politicians start pointing fingers, watch closely. Note
that
they are nowhere near a mirror.
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