Monday, September 22, 2008

Fannie/Freddie Reform Failure

A McCain adviser wrote a very telling article in Bloomberg about the financial crisis. Basically? It's the Democrat's fault for the meltdown of Fannie and Freddie. Now, bear with him -- he gets to his point and it really hits a lot of true points.

Basically, in 2004 there were signs of problems with Fannie and Freddie. In 2005, Alan Greenspan came before Congress to warn them that there will be problems with Fannie Mae and Freddie Mac in the future if they didn't act quickly. He said that if Fannie and Freddie were allowed "...continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road...We are placing the total financial system of the future at a substantial risk.'' That led to a massive Fannie/Freddie reform bill in the Senate led by John McCain. He gave impassioned speeches on the topic in 2005 and 2006 about how important it was. The Senate failed to pass it. It passed committee and got to the Senate floor where a partisan vote occurred and Democrats blocked its passage. The bill would have allowed regulators to crack down on risky investments by Freddie and Fannie, which could have prevented all manner of problems. But, it failed -- and Dodd, Clinton, and Obama led the charge.

The Dodd and Obama have been received massive donations from Fannie and Freddie's employees and PACs. Wonder why they sided with them? I don't. Read the article and you'll understand a bit more about how this current financial situation could have been avoided, and wasn't, because of partisan bickering. McCain supports bipartisan solutions that have helped fix all manner of issues throughout his time in the Senate. Obama is a partisan hack.

1 comment:

Anonymous said...

I’m not simply speaking about all skyscraping but Hogan
that I’m into attraction this summertime season. I yearn for them all. We're totally in love with the fabulous sporty shoes like Hogan scarpe donna
. The house of hogan donna
is renowned for its casual-chic sneakers for him and also her. If you're always hope for the finest shoes in town, you can select Hogan scarpe uomo