Democrats: The Scourge of the World

Freddie Mac and Fannie Mae

Democrats have been in control of Congress since 2006, and will continue to run things for the next four years with a democrat as president, so the recession should last at least that long. That's because the economic philosophy of the Democratic Party is to subsidize failure and punish success. Bailing out auto companies that couldn't make money in good times, and raising taxes on those job creators who are still making money may be good for gathering votes, but not for growing an economy.
Democrats caused our financial crisis by requiring Fannie Mae, Freddie Mac, and other lenders to make risky loans to those who were not qualified. This policy was put into force during the Clinton Administration. Senator John McCain in 2005 tried to get Congress to have Fannie Mae, and Freddie Mac return to sound loan granting policies. Obama, and other democrats refused.

Franklin Raines, CEO of the Federal National Mortgage Association (Fannie Mae) from 1999-2004, is the individual most responsible for the subprime mortgage crisis. Under Raines, Fannie Mae committed 'extensive financial fraud.' It was on Mr. Raines' watch that Fannie Mae went bankrupt. Franklin Raines has taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing matters."

Mr. Jim Johnson, the former Fannie Mae chairman, who helped with the screening process for Obama's VP, and Mr. Raines aren't the only figures in the subprime mortgage scandal to be connected to the Obama campaign. Jamie Gorelick, rumored to be an attorney general candidate in an Obama administration, was vice chairman of Fannie Mae from 1997 to 2003. Penny Pritzker, Mr. Obama's national finance chairman, has been described as "the Michael Milken of the subprime mortage crisis" for her pioneering of the packaging of bad loans with good ones at her now defunct Superior bank in suburban Chicago.
A look at history to find out where it all began, and why we are in this financial mess.

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 encourage 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...Black Cloud's opinion) 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 dollars.