Obama Wants Transparency? Not If It Exposes The White House Chief Of Staff, Rahm Emanuel!

One of Obama's campaign promises was that he would make the government "more transparent." Well, we are still waiting for that transparency to emerge. If anything, Obama and the Democrats have worked to make things more secretive. For example, the way the Republicans were excluded from meetings where the porkulus/spendulus package was written.

The broken promise of more transparency has even extended into the White House itself where Rahm Emanuel is Chief of Staff. While doing a background story on Rahm's activities at Freddie Mac, the Chicago Tribune tried to obtain meeting minutes and other information under the Freedom of Information Act (FOIA). But the Obama Administration just outright said "No."

From the Chicago Tribune:

The Obama administration rejected a Tribune request under the Freedom of Information Act to review Freddie Mac board minutes and correspondence during Emanuel’s time as a director. The documents, obtained by Falcon for his investigation, were “commercial information” exempt from disclosure, according to a lawyer for the Federal Housing Finance Agency.

Why the secrecy? What is the Obama Administration afraid will be brought to light if that information were released? Perhaps that Rahm Emanuel had a bigger hand in causing the credit crisis than previously thought?

That little line about "commercial information" should only apply to private companies. Freddie and Fannie are not private anymore.

Again, what is the Obama Administration afraid of in releasing that information?

If this had been a Republican Administration denying this kind of information, the leftist leaning news networks would be all over it. But, since they won't cover this, it is up to us bloggers to ask these questions.

You can access the complete story on-line here:

Rahm Emanuel's Profitable Stint At Mortgage Giant
Bob Secter and Andrew Zajac
Chicago Tribune
March 27, 2009

New York Times Article From September 30, 1999 Showcases Who Is Really Responsible For The Credit Crisis

Despite Barack Obama's bold-faced lie about deregulation being the cause for the mortgage credit crisis, the New York Times, in an article published on September 30, 1999, reveals the truth about what happened and why.

We know that it all began with the 1977 Community Reinvestment Act which required banks and lenders to make risky loans to people who didn't have the credit rating necessary to qualify for those loans.

But, as the NYT article illustrates, it was stepped up and taken to even further extremes. Now, we all know who was President in 1999, right? (Hint: it wasn't a Republican.)

Here are some exceprts from that article:

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Did you read that? "Fannie Mae is easing credit requirements on loans that it will purchase from banks and other lenders."

Now, why would they do that?

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people ...

Yes, you read that correctly. "Under increasing pressure from the Clinton Administration." This was also the time when Franklin Raines made millions off of Fannie Mae even though he knew it was heading for big trouble.

I wonder if Barack Obama knew about this before he told his bold-faced lie about Republicans being at fault for the credit crisis in his State of the Union Address last night?

More:

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's. "From the perspective of many people, including me, this is another thrift industry growing up around us," said Peter Wallison a resident fellow at the American Enterprise Institute. "If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry."

Again, more history that gets ignored by leftist politicians. It was the conservative American Enterprise Institute that saw the danger and the libs ignored it. And, everytime someone brought up the possibility that Freddie and Fannie would go under, it was libs who blocked any effort at reform.

Finally:

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The push for making all of these subprime loans came first from the 1977 CRA (passed and signed into law by Democrats) and then later from the Clinton Administration.

Now, who is responsible for this economic crisis? (Hint: they were not Republicans.)

You can access the complete article on-line here:

Fannie Mae Eases Credit To Aid Mortgage Lending
Steven A. Holmes
New York Times
September 30, 1999

And just in case the New York Times decides to place this article into a memory hole, you can download it in .pdf format here:

Fannie Mae Eases Credit To Aid Mortgage Lending
Steven A. Holmes
New York Times
September 30, 1999

The Big Media Lie: Mortgage Crisis Is Bush's Fault

Bush derangement syndrome goes far beyond January 20, 2009. Remember that day? When Democrats very disrespectfully and derisively sang "Nan-na-na-na! Hey! Hey! Good-bye!" when the outgoing President and Vice-President came out? Well, a part of that reason is because Old Media would cherry-pick information that was politically expedient for Democrats and use that limited information to write stories for print. In other words, Old Media would deliberately withhold facts that might have painted the Bush Administration in a positive light.

Fortunately, the Internet does not have a "memory hole" like the one used in George Orwell's novel 1984.

One of the lies that Old Media is perpetuating, and Barack Obama is trying to underscore in order to sell his $100 million mortgage bailout plan, is that the current housing mortgage crisis is the fault of George W. Bush. That is simply not true. The current mortgage crisis has its roots in the 1977 Community Reinvestment Act.

In fact, it is the uber-liberal New York Times that debunks this lie with its own archive of stories. In fact, it validates my earlier blog entry about how Barney Frank lied about the who was responsible for the collapse of Freddie Mac and Fannie Mae.

From a New York Times article that was published September 11, 2003:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. ... The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

Clearly, the Bush Administration knew that there was a big problem with Freddie and Fannie. The New York Times proves this with the above referenced article.

So, why didn't anything get done about it? Because the Democrats, that is the same Democrats who are falsely blaming Bush, stopped it. In fact, the Democrats were saying that there was nothing wrong with Freddie and Fannie while they were failing.

Read this:

Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing. "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Representative Melvin L. Watt, Democrat of North Carolina, agreed. "I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing," Mr. Watt said.

Let me repeat what Barney Frank told the New York Times in 2003: "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis." He said this at a time when the Bush Administration was trying to fix the system and avoid the very problem we are facing today! And Barney Frank is one of those trying to Blame Bush!

But, Old Media will never admit the truth. Instead, despite what the archival evidence is, Old Media would rather repeat the lie.

You can access the original New York Times article on-line here:

New Agency Proposed To Oversee Freddie Mac And Fannie Mae
Stephen Labaton
New York Times
September 11, 2003

Congress Finally Acknowledges Some Of The True Culprits Of The Credit Crisis

Former Fannie Mae and Freddie Mac executives were scheduled to be questioned about their roles in the sub-prime credit crash. Names like Leland Brendsel, Daniel Mudd and Franklin Raines as well as Richard Syron are being mentioned.

These are the people who should have been hauled before Congress back in September-October when the House and Senate were discussing the failed bailout of Wall Street. Maybe now we can get some real answers to the problem and Congress will see that the 1977 Community Reinvestment Act needs to be repealed if we really want to clean up the entire mess.

From CNN:

“The companies made irresponsible investments, costing taxpayers hundreds of billions of dollars,” said Rep. Henry Waxman, D-Calif., committee chairman. “Their own risk managers warned time after time of the dangers of investing in subprime market, but those risks were ignored.” The companies have drawn criticism from lawmakers on both sides of the aisle for taking on too much risk, exacerbating the credit crisis when the housing market declined. Sen. John McCain, R-Ariz., during his recent failed presidential bid, said Fannie and Freddie were the “catalyst - the match that started this forest fire.” The publicly traded but federally backed companies together control or guarantee about $5 trillion in mortgage loans. They purchase large amounts of home loans, bundle them together and divide them into securities that can be sold to investors.

I'm gald to see that people like Franklin Raines (who made over $90 million in personal income off of these high risk, sub-prime loans) are finally being brought before the cameras so that the American people can see who profited by this whole thing and why.

You can access the original blog entry on-line here:

Fannie, Freddie Ignored Warning Signs
David Goldman
CNNMoney.com
December 9, 2008

'Crony' Capitalism Is Root Cause Of Fannie And Freddie Troubles: Democrats At The Center Of It All

Terry Jones at the Investor's Business Daily has a nice, clean, concise and accurate description of what happneed at Freddie Mac and Fannie Mae and why we taxpayers are being cajoled into paying for it.

The truth is that depspite the shrill calls from Barack Obama, Christopher Dodd and Barney Frank that it is "all the Republicans fault," it has been the Democrats at the center of the maelstrom. It was the Democrats who, at least twelve times, derailed Republican efforts at reforming Freddie and Fannie and as we showed in a previous blog post, Barney Frank was one of those opposed that reform very ferociously.

So, why did the Dems opposed the reform of Freddie and Fannie? Money. That's it. That's the whole reason.

Here is the history in a nutshell:

It all started, innocently enough, in 1994 with President Clinton's rewrite of the Carter-era Community Reinvestment Act. Ostensibly intended to help deserving minority families afford homes — a noble idea — it instead led to a reckless surge in mortgage lending that has pushed our financial system to the brink of chaos. ... Fannie and Freddie, the main vehicle for Clinton's multicultural housing policy, drove the explosion of the subprime housing market by buying up literally hundreds of billions of dollars in substandard loans — funding loans that ordinarily wouldn't have been made based on such time-honored notions as putting money down, having sufficient income, and maintaining a payment record indicating creditworthiness. With all the old rules out the window, Fannie and Freddie gobbled up the market. Using extraordinary leverage, they eventually controlled 90% of the secondary market mortgages. Their total portfolio of loans topped $5.4 trillion — half of all U.S. mortgage lending. They borrowed $1.5 trillion from U.S. capital markets with — wink, wink — an "implicit" government guarantee of the debts. This created the problem we are having today. As we noted a week ago, subprime lending surged from around $35 billion in 1994 to nearly $1 trillion last year — for total growth of 2,757% as of last year. No real market grows that fast for that long without being fixed.

And the part about money for the Dems? Read on:

Fannie and Freddie became huge contributors to Congress, spending millions to influence votes. As we've noted here before, the bulk of the money went to Democrats. ... Meanwhile, Fannie and Freddie also became a kind of jobs program for out-of-work Democrats. Franklin Raines and Jim Johnson, the CEOs under whom the worst excesses took place in the late 1990s to mid-2000s, were both high-placed Democratic operatives and advisers to presidential candidate Barack Obama. Clinton administration official Jamie Gorelick also got taken care of by the Fannie-Freddie circle. So did top Clinton aide Rahm Emanuel, among others.

And yet, despite the fact that the Dems are in the middle of this whole fiasco, Obama, Dodd and Frank are insistent that it is a Republican problem. Unfortunately, their surrogates in the media are spreading this misleading (or outright false) message.

But, do you remember all those campaign ads by Barack Obama about how their were lobbyists on John McCain's staff? Well, Obama should change his campaign slogan of "Change we can believe in" to "Hypocrisy for our own cause." Here is how Obama deals with those lobbyists:

Over the span of his career, Obama ranks No. 2 in campaign donations from Fannie and Freddie, taking over $125,000. Dodd, head of the Senate Banking panel, is tops at $165,000. Clinton, ranked 12th, has collected $75,000. ... It emerged that Clinton aide Raines, who took Fannie Mae's helm as CEO in 1999, took in nearly $100 million by the time he left in 2005. Others, including former Clinton Justice Department official Gorelick, took $75 million from the Fannie-Freddie piggy bank.

Today, Raines is a top advisor for the Obama campaign.

So, the next time somone accuses the Republicans of this Freddie and Fannie mess, ask the accuser what happened to all the money that the Dems made off of Freddie and Fannie and ask when was the last time the Dems tried to reform them.

You can access the complete article on-line here:

'Crony' Capitalism Is Root Cause Of Fannie And Freddie Troubles
Terry Jones
Investor's Business Daily
September 22, 2008

Barney Frank: Lies And Damned Lies About Freddie And Fannie

So, what does a left-wing socialist do when confronted with a financial crisis caused by the government? He incorrectly blames it on the private sector.

That is precisely what Rep. Barney Frank (D-MA) did when he blamed the current Wall Street crisis on the free market. Here is exactly what he said:

"The private sector got us into this mess… The government has to get us out of it. We do want to do it carefully."

Now, there is no spinning this nor is there any taking it out of context. Rep. Frank was clear and unambiguous in what he said.

But, he is making false accusations. In fact, he is either deliberately lying or he has the worst memery in the history of the House of Representatives.

On September 9, 2008, the Wall Street Journal published an excellent article which details Frank's history of comment and action on the Freddie Mac and Fannie Mae meltdowns. Here is the history:

In 2000, then-Rep. Richard Baker proposed a bill to reform Fannie and Freddie's oversight. Mr. Frank dismissed the idea, saying concerns about the two were "overblown" and that there was "no federal liability there whatsoever."

Apparently, Frank doesn't seem to think that they are "overblown" now.

Two years later, Mr. Frank was at it again. "I do not regard Fannie Mae and Freddie Mac as problems," he said in response to another reform push. And then: "I regard them as great assets." Great or not, we'll give Mr. Frank this: Their assets are now Uncle Sam's assets, even if those come along with $5.4 trillion in debt and other liabilities. Again in June 2003, the favorite of the Beltway press corps assured the public that "there is no federal guarantee" of Fan and Fred obligations. A month later, Freddie Mac's multibillion-dollar accounting scandal broke into the open. But Mr. Frank was sanguine. "I do not think we are facing any kind of a crisis," he said at the time.

I don't believe that anyone even remotely familiar with the situation as it exists today would deny that this was "any kind of crisis."

More:

Three months later he repeated the claim that Fannie and Freddie posed no "threat to the Treasury." Even suggesting that heresy, he added, could become "a self-fulfilling prophecy." In April 2004, Fannie announced a multibillion-dollar financial "misstatement" of its own. Mr. Frank was back for the defense. Fannie and Freddie posed no risk to taxpayers, he said, adding that "I think Wall Street will get over it" if the two collapsed.

Good! Then we don't need this bailout nor do we need any Federal oversight, now do we?

Frank wasn't done yet. Read on:

By early 2007, Mr. Frank was in charge of the House Financial Services Committee, arguing that he had long favored some kind of reform. "What blocked it [reform] last year," Mr. Frank said then, "was the insistence of some economic conservative fundamentalists in the Bush Administration who, to be honest, don't think there should be a Fannie Mae or a Freddie Mac." What really blocked it was Mr. Frank's insistence that any reform be watered down and not include any reduction in their MBS holdings. In January of last year, Mr. Frank also noted one reason he liked Fannie and Freddie so much: They were subject to his political direction. Contrasting Fan and Fred with private-sector mortgage financers, he noted, "I can ask Fannie Mae and Freddie Mac to show forbearance" in a housing crisis. That is to say, because Fannie and Freddie are political creatures, Mr. Frank believed they would do his bidding. And this is exactly what Mr. Frank attempted to prove when the housing market started to go south. He encouraged the companies to guarantee more "affordable" mortgages, thus abetting their disastrous plunge into subprime and Alt-A loans. He also pushed for, and got, an increase in the conforming-loan limits to allow Fan and Fred to securitize and guarantee larger mortgages. And he pressured regulators to ease up on their capital requirements -- which now means taxpayers will have to make up that capital shortfall. But the biggest payoff for Mr. Frank is the "affordable housing" trust fund he managed to push through as one political price for the recent Fannie reform bill. This fund siphons off a portion of Fannie and Freddie profits -- as much as $500 million a year each -- to a fund that politicians can then disburse to their favorite special interests.

Ahh! Now we are getting to the real truth here. As long as special interests were getting a good share of the profits, all the mismanagement by Rep. Frank & Co. was okay. But once that mismanagement culminated in a financial crisis, it was all the fault of the "private sector," or so Barney Frank claims.

They always say to give credit where credit is due. Well, Barney Frank certainly deserves his share of the credit for helping to bring about the current financial crisis.

You can access the complete article on-line here:

Fannie Mae's Patron Saint
The Wall Street Journal Op-Ed
September 9, 2008

Financial Meltdown: Where Does The Buck Stop?

That's a good question. Where does it stop? And what can we do to make sure that something like this doesn't happen again?

Well, we need to find out where this all started and how. Without doing so, all the debate will be meaningless and the current efforts at a bailout will simply result in more crises down the line.

So, where did it start? Sheldon Richman, editor of The Freeman and an economist with the Foundation for Economic Education has the answer to this. According to Cybercast News Service:

“The biggest culprit, I think, is the implicit guarantee the government has always issued to Fannie Mae and Freddie Mac,” Richman said. “Something like 80% of the mortgages these days are held or backed by Fannie Mae or Freddie Mac,” he said, and “they get special treatment from the government like no other lender gets.”

Okay, there was a big bailout of these two earlier this year. What do they have to do with anything and why?

“[T]he financial industry is regulated all over the place.” In Richman’s analysis, it is precisely the government guarantee of Fannie and Freddie that is “short-circuiting” the market.” ... Providing context, Richman said government policy laid the foundation of this crisis more than 30 years ago when Congress passed the Community Reinvestment Act of 1977. This law forced banks to loan money to low-income borrowers as a way to ensure that financial institutions would “meet the credit needs of the local community.” Under the Clinton administration, federal regulators began using the act to combat “red-lining,” a practice by which banks loaned money to some communities but not to others, based on economic status. “No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”

Now we are getting to the meat of the problem. Government had been forcing lending institutions to make high-risk loans and Freddie Mac and Fannie Mae have been buying up those loans. When the defaults on these loans began to pile up, the collapse of Freddie and Fannie happened and the need for the bailout soon followed.

Further, it wasn't that banks wanted to make (or even encouraged the making of) these loans. They were forced to.

The Clinton-Reno threat of “vigorous enforcement” pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. “Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn’t have been getting mortgage loans.” This threat combined with the government backing of Fannie and Freddie set the stage for the current uncertainty, because the “banks could just sell the loans off to Fannie or Freddie,” who could buy them with little regard for negative financial outcomes, Richman said.

The problem is that the government's policy of requiring private institutions to make these bad loans is still in place. The failures of Freddie and Fannie and the bailouts of AIG and Bear Stearns are just symptoms. The disease of government intervention is still on the books.

One of the conditions for enacting a bailout should be to remove the ridiculous high-risk loan requirements put in place by the Carter and Clinton Administrations.

You can access the complete column on-line here:

Financial Meltdown: Where Does The Buck Stop?
Matt Cover
CNSNews.com
September 22, 2008