Why do the conservatives focus on Freddie and Fannie and not the sub-prime melt down in general.?
It seems to me that Fannie and Freddie failed as a result of the sub-prime catastrophe, but they were not the primary cause which was wall street and the mortgage backed securities and credit default swaps.
Sorry, to disappoint, but in 2005 and 2006
Senate Bank finance chairman: Richard Shelby (R)
House subcommitte on Financial Institutions: Spencer Bachus (R)
In 2007, the House passed the bill on regulating Fannie and Freddie (Thank you Barnie Frank and Nancy Pelosi).
It never got out of committee in the Senate. (Thank you Sen. Dodd)
Don't mean to be rude, but no one is answer the question.
We would still have this mess with or without Fannie and Freddie. While Fannie and Freddie might have withstood the catastrophe if they had been better capatilized, they are a casualty, not the cause.
I agree with McCain that Fannie and Freddie should have been better capitalized. Pretty stupid for a quasi-goverment corp not having the reserves. They should be managed conservatively.
But folks, you gotta follow the money.
Thank you all, even those who focused on FM/FM and not the question--I guess you are true conservatives!!
- Anonymous1 decade agoFavorite Answer
The conservatives focus on FM/FM because it's easier to explain to general public. The public believes that
*) America is the greatest and absolutely invincible
*) Because of that American public cannot be the cause of any trouble
*) Therefore the reasons must the sins of the few: greed irresponsibility bribes
I am not a conservative, and I am free not to side with their explanations. I always say that the core reason is inability of American economy to compete, caused by populist anti-business laws. Until these laws are abolished, the situation will progressively worsen, as more and more capital, jobs and professionals will flee, or at least not to come.
Every time when I try to explain it here on Y!A people call me idiot. And this answers your question directly: everybody goes after the easy prey FM/FM and nobody wants to name the real cause, because the voters do not like to hear the truth.
Ron Paul yesterday:
"As a matter of fact, the Chinese work hard, right now, and they save, and they're buying up the world. But we borrow and spend and consume, and now it's caught up to us and it's undermining our whole system. ... So this $700 billion is not going to do it."
And how many people called him idiot, and how many voted for him?
- Anonymous1 decade ago
Remo.........maybe this will help answer your question.....
Obama "does" have a vision?
But he sure wasn't using it a few years back when it was needed.
From the U.S. Congressional record........MAY 25, (((2005)))
JOHN MCCAIN addresses the U.S. senate resulting from what his vision senses.
SENATE BANKING COMMITTEE CHAIRMAN - CHRIS DODD -DEM
SENATE FINANCE COMMITTE CHAIRMAN - BARNIE FRANK - DEM
>>>>>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 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.
Vision.......who really has it? And who turned their backs on it?
19 minutes ago - 3 days left to answer.
15 minutes ago
Speaker of the House Nancy Pelosi - Democrat
Senate- Senator Harry Reid, Majority Leader - Democrat
5 minutes ago
Barnie Frank and Chirs Dodd prevented it from coming out of committee thus blocking a floor vote.
- Anonymous1 decade ago
They are and you r buddy Chris Dodd are the root of the problem. So they are focusing on them. If there were any republicans to blam Im sure Nacy and that twit Reed would be holding hearings to fry them
- Anonymous1 decade ago
it's all intertwined and the fault of CONGRESS. The democraps helped destroy the economy. Barry's tax increase will further destroy it.
This who thing started back in the 1970s when the democrats wanted to help minorities buy homes. When people are allowed to buy homes they can't afford there is a problem!Source(s): McCain/Palin
- How do you think about the answers? You can sign in to vote the answer.
- Anonymous1 decade ago
Because this whole mortgage meltdown is the result of liberals policies to grant loans to people who could not afford to borrow.
- Anonymous1 decade ago
Read This Only if you Want to Know the Truth About the Collapse of Fannie Mae and Freddie Mac
When President Bill Clinton took office, Fannie and Freddie were viewed as “key” to Clinton’s plans to expand home ownership. The Washington Post reports: “The result was a period of unrestrained growth for the companies. … The companies increasingly were seen as the engine of the housing boom.”
As Fannie and Freddie grew, conservatives repeatedly warned that their size posed a systemic risk to the financial system. As Sarah Palin put it, thanks to the implicit federal guarantee of their debt, Fannie and Freddie had become too big and too expensive to the taxpayers.
But Fannie and Freddie did not want to be exposed so they turned to Democrat friends for protection. James Johnson who was an advisor to Walter Mondale and is now a campaign advisor to Barack Obama, fought all efforts to reform of Freddie and Fannie. Clinton administration OMB director Franklin Raines joined the effort and tried to reassure critics that when he was Fannie Mae CEO in 1999: “We manage(d) our political risk with the same intensity that we manage our credit and interest rate risks.”
To this day Fannie and Freddie’s lobbying power over Democrats continues to be strong and it’s no secret why that is the case. According to the Center for Responsive Politics, the top three recipients of campaign donations from Freddie and Fannie’s PACs and employees are all Democrats. From 1989 through today, Sen. Chris Dodd received $165,400, Barack Obama $126,349, and John Kerry $111,000. The Washington Post article concluded: “Blessed with the advantages of a government agency and a private company at the same time, Fannie Mae and Freddie Mac used their windfall profits to co-opt the politicians who were supposed to control them.”
It is amazing to me how contagious is the Democrat penchant for lying among themselves; it spreads from Democrat to Democrat like the Bubonic Plague. Bill Clinton of course was the lying master; he not only infected his wife Hillary, but all who supported him. Former Democrat Senator Bob Kerrey said of Bill Clinton he is an “unusually good liar; unusually good.”
Barack Obama has followed in Bill Clinton’s footsteps as an “unusually good liar” though realizing how little ability Obama has to think for himself, it is likely that his puppet string handler, David Axelrod, is the perpetrator of the lies Obama learns to speak behind his teleprompter. Now Obama says he warned about the problems with the two gigantic mortgage holders and buyers of still more mortgages and we would not be in this mess if he had been listened to (when, at what point in his 143 days in the senate?), and he says all this with the public certainty only someone skilled in misleading the public can do. Democrats speak their two minds through their forked tongues by once agreeing with the recommendations by our Treasury secretary and the Fed chief for prompt action to avert collapse of financial markets while also blaming the Bush administration for failure to avoid the problem. For good measure the Obama team places the blame on John McCain for doing nothing to correct the system in his 26 years in the Senate; conveniently overlooking the still longer time in the Senate occupied by their Vice Presidential candidate.
But the most unfortunate thing about all this is the failure of the news media, and even McCain’s own campaign, to inform the public that John McCain was one the very few in government to actually forecast the current financial situation unless Fannie Mae and Freddie Mac were overhauled and corrected and the fact that McCain attempted to fix Fannie Mae and Freddie Mac in 2005 is ignored.
The question that should be asked at this time is: “Which candidate foresaw the credit crisis and tried to do something about it”? The answer is that John McCain did and along with three other Senate Republicans he tried to reform the government’s involvement in mortgage lending three years ago, after an attempt by the Bush administration died in Congress two years earlier.
McCain addressed the subject on May 25, 2006, when speaking in support of the Federal Housing Enterprise Regulatory Reform Act of 2005 which was introduced to deal with the problems at Fannie Mae and Freddie Mac (via Beltway Snark):
“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