Truth Detector: Fannie and Freddie

RUSH: From the Swamp, this is a blog of the Chicago Tribune, John McCormick. The dateline is Dunedin, Florida. Did you know, ladies and gentlemen, that Barack Obama blew the whistle on Fannie Mae? Yeah. Listen to this. ‘But I sure wish he was talking the same way over a year ago, when I introduced a bill–‘ talking about McCain here ‘–that would’ve helped stop the multi-million-dollar bonus packages that CEOs grab on their way out the door. Because he opposed that idea. I sure wish he joined me when I blew the whistle on the fired CEOs of Fannie Mae and Freddie Mac who tried to walk away with golden parachutes.’ McCain’s campaign responded by saying Obama was telling lies. And, of course, I told you yesterday, he’s getting ready for six weeks of lies. That’s all liberals do and that’s all Obama’s got.

McCain spokesman Tucker Bounds said, ‘Barack Obama actually said today that he ‘blew the whistle’ on Fannie Mae and Freddie Mac CEOs for their golden parachutes, when he actually hired one for a critical job in his campaign and reportedly had his campaign seeking policy advice from another.’ He might have blown something on Fannie Mae, but it wasn’t a whistle, folks. That much we know. By the way, if this deal gets done, if this deal actually gets done, this bailout, rescue, whatever you want to call it, it will be another instance of George W. Bush getting what he wants. Some lame duck president, eh? Bush getting what he wants.

Let’s go to the audio sound bites. We start here with Maxine Waters last night on Hardball with Chris Matthews, who asked her, ‘What do you make of the comments of the reason we’re in this mess is under the Democratic government, under Clinton, there was an effort to make everybody a homeowner. Was that too aggressive?’

WATERS: That’s a cheap shot. I don’t blame Fannie and Freddie for doing what they were organized to do. They just didn’t do it right. They got too carried away, came up with all of these exotic products. If they had been given the products with 30-year fixed mortgages they would have been able to stay in the homes. The regulatory agencies should have stopped them.

RUSH: Maxine, this is just absurd. There has to be an intelligence requirement to be elected. We’ve gotta do something about this. This woman is just loco. Rarely have I seen somebody so willing to open their mouth and prove every time they do it what a fool they are. Here’s Chris Dodd on MSNBC last night, question: ‘Do you agree with the president about why this crisis happened and with what the contours of the crisis are?’

DODD: What the president left out — we don’t need to dwell on this because we gotta look ahead — what the president left out was the cops weren’t on the beat. We had plenty of regulation in the area. The question was the regulators weren’t doing their jobs.

RUSH: We gotta start rewriting history now. Here’s the guy that stood in the way of the regulators, the cops. This is the guy that grabbed the billy club from the cops and beat ’em over the head with it. Gateway Pundit has it listed, 12 different attempts to warn, to regulate, to stop what was happening at Fannie Mae and Freddie Mac, I think last year, this year, starting in 2000. I forget what the time frame was, 12 different times. McCain signed legislation, ‘We got a problem here in 2005 or 2003.’ And he says the cops weren’t on the beat. You told the cops to go eat some doughnuts and have some coffee, and you paid them to do it. All right, now, this gets good. This is a little smack down here between Lou Dobbs and Barney Frank, and it was on CNN, Lou Dobbs Tonight. First sound bite. Dobbs says, ‘What you’re basically talking about, the Republicans are going to get this administration, going to get a bailout of Wall Street. The Democrats are going to get a New Deal, and the result is going to be what, a nationalized –‘

FRANK: Nothing nationalized because the ownership we’re going to take is going to have no voting rights, it is going to have the right to get the profit. A lack of regulation, going back to Ronald Reagan, allowed the private sector to make the kind of mistakes that put us in this trouble. We have Ronald Reagan saying government is not the answer to our problem, government is the problem. Dick Armey saying the markets are smart and the government’s dumb.

RUSH: Well, now — (laughter) — this is just incredible! Now they’re blaming this on Reagan. Barney Frank, this goes right to your front and back doors! This whole thing goes right to your front and back doors. What he said is this (doing Barney Frank impression) ‘Nothing nationalized, nothing nationalized because ownership, we’re going to take, no voting rights, mortgages to vote.’ I don’t know what he’s talking about. The other day, Chuck-U Schumer says that the lowly mortgage brought us to the brink of financial collapse, and now Barney says that the mortgages can vote. Well, if the mortgages got together and decided to screw our financial system, but they can’t vote… (sigh) I listen to these guys and get confused. Now, Dobbs was not happy with this, and he then jumped in.

DOBBS: May I point out that President Jimmy Carter is the one who started deregulation in —

FRANK: Yes.

DOBBS: — 1978. I mean, the partisan thing doesn’t work for me.

FRANK: Well, I’m not being partisan. I’m being accurate. If you stop interrupting me, I could make my point.

DOBBS: Well, then I will —

FRANK: Jimmy Carter never —

DOBBS: — not interrupt you, but as a point of fact —

FRANK: Jimmy Carter never said —

DOBBS: — it was Jim —

FRANK: Jimmy Carter never said, ‘Government is the problem.’

DOBBS: No, he did not.

FRANK: Well, Jimmy Carter never said, as did Dick Armey, ‘Government is dumb and markets are smart.’

DOBBS: Here —

FRANK: I’m sorry, Lou. We’re not going to have a serious conversation —

DOBBS: We’re having a very serious conversation.

FRANK: Jimmy Carter is very different than Ronald Reagan and Dick Armey in here. Yes, he moved for deregulation in two specific industries, trucking and airlines, and they haven’t — airlines didn’t work out as well, but we’re talking not about whether you lack loosen regulation in one area, but whether you have the philosophy of no regulation. And Jimmy Carter never deregulated the financial markets.

RUSH: (laughing) (doing Barney Frank impression) ‘If you’re going to keep interrupting me, we can’t have a serious conversation.’ Barney, we just got through hearing Chris Dodd say that there’s all kinds of regulators and the cops weren’t on the beat. This is like listening to Clinton claim that people stood in his way of trying to fix this in the nineties. Barney, this is all about you writing laws, telling these mortgage lenders to whom they had to lend money, people that could never pay it back. There’s no amount of regulation that is going to protect people from stupid management decisions or laws. It just isn’t going to happen. Let’s go back, September 10th, 2003, Capitol Hill. The former Treasury Secretary John Snow was testifying before the House Financial Services Committee.

SNOW: We need a strong world-class regulatory agency to oversee the prudential operations of the GSEs and the safety and the soundness of their financial activities.

RUSH: That’s 2003 in the Bush administration proposing stronger regulation of Freddie Mac and Fannie Mae. The Democrats rejected the legislation. September 10th, 2003, Barney Frank, the chairman of the House Financial Services Committee.

FRANK: Fannie Mae and Freddie Mac are not in a crisis. The more people in my judgment exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see, I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. And even if there were a problem, the federal government doesn’t bail them out. But the more pressure there is there, then the less I think we see in terms of affordable housing.

RUSH: All right, I want to play this again. This is 2003, five years ago, Barney Frank is, ‘There’s no problem here, no problem whatsoever. And even if there is a problem, we’re not going to bail ’em out.’ And then he gets in that affordable housing thing at the end. See, here’s what they had set up. This was done on purpose. Barney Frank, Chris Dodd, led the way in legislation, along with Bill Clinton and Jimmy Carter, led the way in creating legislation that demanded — Janet Reno was threatening lending institutions with investigation if they didn’t follow through on this: make loans to people that can’t pay ’em. That’s Barney’s definition of affordable housing. We give those people houses. They’re entitled, don’t you see, they’re Americans. They’re entitled to affordable housing. It’s a right, it’s a right. So all these loans were made, these lending institutions, you know the details after that, so all of this threatened oversight, all of this threatened regulation would expose the fraud back in 2003. It would have exposed the fraud, and Barney was afraid that people would not anymore be loaned money they couldn’t pay back and therefore would be the end of his dream of affordable housing. And of course this is just another one of the many techniques, Democrats giving away your tax money to people in exchange for their lifetime vote and support. Now, listen to this again. It’s five years ago, almost to the day.

FRANK: Fannie Mae and Freddie Mac are not in a crisis. The more people in my judgment exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see, I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. And even if there were a problem, the federal government doesn’t bail them out. But the more pressure there is there, then the less I think we see in terms of affordable housing.