Not only did John McCain predict that Fannie Mae and Freddie Mac were an accident waiting to happen, but McCain even pushed for legislation that would help to reform them so that they wouldn’t blow up as they did a few days ago.
McCain’s statement from the Congressional Record.
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 over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
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.
I’d say this pretty clearly refutes Barack Obama’s silly claims that John McCain is not a reformer and does not know anything about economics. One candidate is the real reformer, and it ain’t Barack Obama. By the way, the Democrats blocked the legislation McCain proposed, and it was never passed. So if you want to know why Fannie Mae and Freddie Mac failed, leaving the taxpayers with billions of dollars in losses, blame the Congressional Democrats.
32 Responses
From where I sit - not a fine place, most would agree - Obama has scored a great victory for Socialism. By his refusal to act as McCain suggested, the State has taken over the private sector structure most directly affecting every American.
Does anyone remember the fuss America kicked up when South American countries Nationalised private, American financed coroprations? The anti-Capitalism, pro socialism practices which bring on the State control of even the homes of people is the biggest step toward Communistic control that one could imagine short of the Armed Forces staging a Fascist coup. And yet, here it is beong foisted on the American people by dafault. Everyone will soon have the Guvmug as a landlord.
The corruption in America has become so ingrained into common practice as to allow the entire Financial Industry becoming little more than a Casino run by Mafioso. Both political Parties have aided and abetted the corruption albeit with different motives - long term communist aspiration on the one hand and greedy self-interest on the other.
A Pox on both their houses and bring in the hoses.
Does it matter now who wins the election? If it is to be McCain he is unlikely to walk away from his new responsibilities as leader of the biggest, most powerful Communist country, economically, in history. I suggest he get Gorbachev as an Advisor PDQ.
Posted on September 18th, 2008 at 4:14 am
[...] Obama has the unmitigated gall to mock McCain, in the wake of the Fanny Mae and Freddie Mac debacle, for bragging “about how as chairman of the Commerce Committee in the Senate, he had oversight [...]
Posted on September 18th, 2008 at 8:22 am
According to the New York Times, Democrats blocked Bush’s Fannie Mae and Freddie Mac reforms so low income people with bad credit could buy houses.
”These two entities -Fannie Mae and Freddie Mac - are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, and the less we will see in terms of affordable housing.” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee.
http://strategicthought-charles77.blogspot.com/2008/09/democrats-blocked-bushs-fannie-mae-and.html
Posted on September 19th, 2008 at 8:23 am
Congress was fully controlled by the GOP way back before 2006… It was fully controlled of then GOP Congress who blocked those regulations… Phil Gramm was the father of de-regulator, Enron Loophole, former adviser of McCain…
This author is so twisted, attempting to connect the Fanny Mae & Freddy Mac debacle with Obama, when in fact Obama was in office only couple of years past…
Nice try to the author of this subject, I know you’re hoping that the readers are DUMB enough to fall for your twisted lies…
Posted on September 19th, 2008 at 3:58 pm
The existing CEO Daniel Mudd of Fannie Mae, Freddy Mac is a 100% Republican who contributed large amount of $$$ to McCain’s campaign…
There are 19 lobbyist from Fanny Mae and Freddy Mac who lobbied for McCain, while only 3-lobbied for Obama… Do the math, it doesn’t take an Einstein to figure a simple mathematic equation.
Posted on September 19th, 2008 at 4:06 pm
Mike,
Nice try, but the Democrats in congress blocked the proposed reforms of Fannie Mae and Freddie Mac from taking place. It doesn’t matter who controlled Congress, there weren’t enough votes on a strictly party line vote to get the legislation passed. Had it been passed this financial crisis we’re in now may not have taken place. So the Democrats are actually responsible for this mess, and much of it actually started in the Clinton administration.
As far as Barack Obama’s ties to Fannie Mae go, Jack Johnson, one of the former CEOs of Fannie is an Obama advisor, and Obama took over $126,000 in “campaign contributions” from Fannie Mae and Freddie Mac in just 4 years. That’s more than anyone in congress except Chris Dodd. Obama has been paid off for years by Fannie Mae and Freddie Mac to look the other way and help keep the fraud that was going on at these companies from being found out.
Barack Obama is certainly culpable in this financial mess we’re in, and he must be made to answer for what he’s done, as should the entire Democratic party. There’s no way for Obama to spin his way out of this, because the numbers are available for everyone to see. McCain is right to keep hammering Obama on this, and he’s not going to stop.
Posted on September 19th, 2008 at 6:08 pm
McCain didn’t speak out about this bill until May 2006, about 10 months after it had already died in the Senate (according to govtrack). From what I can find he did about as much as Obama did on it when it really mattered.
So he supported a bill 10 months after it died that might have made a difference at the end of the housing bubble.
But hey, go ahead and give him all the credit you want if it makes you feel better.
Posted on September 19th, 2008 at 8:02 pm
Bill,
I will give McCain credit, since he understood the problem and tried to do something about it. And if it makes you feel better to pretend that Obama hasn’t taken $126,000 in bribes from Fannie Mae and Freddie Mac you go right ahead too.
Posted on September 20th, 2008 at 4:40 pm
Well Eyedoc, if you want to call political contributions “bribes,” how about we go through every donation either candidate has accepted and compare it against their voting record. Every time either McCain or Obama has voted for or against legislation which helps a particular donor, we can consider them to have been “bribed” by said donor.
Of course anyone with half a brain can see that this is simply ridiculous. For not only are you going to find that in many cases that each candidate has voted against the interests of particular donors, you are also going to find a myriad of other reasons for the votes made besides that they are favorable to donors.
In the case of Freddie Mac/Fannie Mae, it’s well known that part of their purpose is to promote “social justice” in mortgage lending, a democratic concept if there ever were one. So it only makes sense that they would contribute to the democratic candidate for president.
You see, there’s a few more steps to be taken before you can justifiably accuse someone of taking a bribe. At least there is in respectable society.
Posted on September 20th, 2008 at 5:27 pm
Bill,
There’s a reason why Obama and Chris Dodd, the head of the Senate Banking Committee, got the most money from Fannie and Freddie, and why McCain and the other folks got the least. It’s because Fannie and Freddie spent the most money on the people who they could rely on to help them hide all the fraud that was going on at their corporations.
Connect the dots, Bill. They didn’t give Obama and Dodd by far the most money because they liked their shoes. I don’t need to be polite, Bill. Not when bailing out Fannie and Freddie is going to cost the taxpayers billions of dollars, and people like Obama and Dodd are responsible. I’m allowed to be really pissed off, and I have a responsibility to make sure as many people know about this as possible.
Posted on September 21st, 2008 at 4:30 am
So McCain couldn’t get this legislation (for which he was a co-sponsor) through a Republican controlled Congress (the 109th). A similar bill was introduced by its original author in this session of Congress (the 110th) and did not get out of committee either. So if McCain was so prescient on this happening why wasn’t he a co-sponsor on the new piece of legislation also?
Posted on September 21st, 2008 at 9:33 am
Who knows? It’s not like the Democratically controlled congress would pass it anyway. What’s your point? McCain saw the problem and tried to do something about it. The Democrats created the problem and tried to prevent it from being fixed. And, Obama was complicit in Fannie Mae’s fraud, and needs to be held accountable.
Posted on September 21st, 2008 at 11:15 am
McCain sponsored that bill in 2005 when there was a Republican President and Republicans controlled both the house and senate. Who was able to successfully block this bill and how?
Posted on September 22nd, 2008 at 10:08 am
So Eyedoc, not only do you falsely accuse people of crimes they have not committed in the least, when you’re called out on it you conveniently delete their posts.
Typical “republican” coward.
Posted on September 22nd, 2008 at 1:41 pm
Bill,
Obama and Dodd as well as a number of other Democrats took bribes from Fannie Mae in exchange for blocking legislation which would have regulated the company. There was massive fraud at Fannie Mae, and those running the company were making a fortune from that fraud. It’s all documented. You have offered nothing to disprove any of it.
I deleted your post because you were being an asshole. It’s my blog, and I can delete anything I want. You’re free to go troll somewhere else.
Posted on September 22nd, 2008 at 3:39 pm
Nolan,
There was essentially a party line vote in the Senate Banking Committee. Every Democrat on the committee voted no. After that the sponsors of the bill couldn’t get the Senate to vote on it. Even if it came to a vote, it would probably have been filibustered. Kevin Hassett has a good article at Bloomberg.com today on this particular subject. I think it’s well worth reading.
Posted on September 22nd, 2008 at 3:45 pm
Maybe McCain didn’t take the money simply because he has so many personal millions.
Posted on September 23rd, 2008 at 4:39 am
I read the Hassett article. It says the same thing you did, that a Republican controlled committee couldn’t get a Republican controlled Senate to vote on it. The filibustering comment is speculation at best.
So, was it lack of Republican will that caused the bill to fail or what?
Posted on September 23rd, 2008 at 2:19 pm
Dan,
It only takes 41 Senators to successfully filibuster a bill. When there was a strict party line vote in the Senate Banking Committee and every Democrat voted “no”, it was clear that the bill could not be passed. Add to that the fact the Republicans sponsored the legislation in the first place and you can see that your attempts to make this debacle the fault of the GOP are misguided at best. Had the Democrats supported the legislation what you see happening today would probably not be happening. Hassett is spot on with his analysis that this financial crisis is the fault of the Democrats. Plus it was the Clinton administration that pushed Fannie Mae and Freddie Mac to make more of these risky subprime loans to people who couldn’t pay them that brought about this whole problem in the first place.
Sally,
Fannie Mae and Freddie Mac “contributed” money to those Senators that they could rely on to do their bidding for them.There’s nothing inherently wrong with supporting certain politicians to the exclusion of others. But, in this case what we’re talking about is blocking regulation of two companies that obviously needed regulation. McCain was not somebody they could count on to help them hide all the fraud that they were committing. Unless you can somehow prove that McCain was offered a similar amount of money and rejected it, your comment makes no sense.
Posted on September 24th, 2008 at 9:04 am
ok, so you are all taking the partisan path here. everyones guy was doing his best to help the system. maccain is a reformer, obama takes bribes, clinton started it all in the 90’s…holy moly!
what about phil gramm and the maccain supported deregulation legislation in 2003 ?
and what about rick davis and the 2 million dollars in fannie mae lobbyist fees ?
you guys are far too one sided for healthy discourse. grow up!
what america needs now are healthy solutions and less ” i told you so “.
Posted on September 24th, 2008 at 10:05 am
Who cares what Rick Davis did? He’s not running for office, and he hasn’t worked for that company for several years. And, Davis never did anything illegal by working for them. The deregulation legislation in 2003 has nothing to do with anything either. The point is that in 2005 McCain grew very concerned with what he saw going on at Fannie Mae and Freddie Mac and sponsored legislation to try and do something about it. The Democrats prevented that bill from being passed and there’s a good chance it would’ve prevented the problems we’re now seeing.
Yes, bipartisan action is obviously needed, as it was in 2005 when the Democrats had a chance to do something that would have provided tremendous benefit to this country and they didn’t. It is very difficult to get any kind of legislation passed without bipartisanship. Now we need to work on fixing a problem that could have and should have been headed off at the pass three years ago.
Posted on September 24th, 2008 at 11:19 am
Whose fault is it? You can bet your last dollar the democrats are going to blame the republicans, and then they both yell and scream at each other.
We the tax payer of this country will fit the bill again as normal. We the people are not running this country anymore.
The Unions and corporations are running this country. We the people, are letting them get away with it. Fire them all that will solve the problem. The democrat are in charge right now and should be blamed with this mess. Feddie Mac and Fannie Mae are to blame that’s where it started.
Not everyone is in agreement with who the blame, But putting it off isn’t fixing a thing
Posted on September 26th, 2008 at 8:39 am
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Posted on September 28th, 2008 at 6:03 am
hey guys what about this u all blame demcrats for not stoping u replicans screw us over in over and taking more more money give crditto pp that cant pay it back but worth shit cuse hey we can blame all our screw ups on dems for not stoping us lol go outta control thats your dam job freddi mac notto go outta control were not bailig u out glad demscrats dint help them lol why in hell should they when they screwe dup so bad they cant manages ther own shit now blame us cuse we dint stop them when ther fult in 1st place for doing all these bs loans to pp ther fult not 7 billon tax payers fult for ther screw up and demcrats fult for not stoping them ther men they know what hell ther doing ok thats bs go ohbbaama
Posted on September 28th, 2008 at 5:04 pm
ya he predicted it all right his boy told him man we shount have done those dumb loans mcain lol were in trouble then mcain goes tryed to look good they know all ready whats up that was so they get more money now theyse asshoels want 7 b our money tax hell no let all thse pp go under gov buy rest of loans we own them i lik ethat new deal
Posted on September 28th, 2008 at 5:10 pm
also fox news those liers feed so much junk in your head bush pp tell them whatto say ever day in memos loser pp screw fox ugle ass team of liers cut off pp they look so dumb on ther also bs news ch they are no wonder closed meetings thers more shit them u know about these comp going under u see soon
Posted on September 28th, 2008 at 5:13 pm
but dont blame dem for those fanny fags geting 10 .6 billon thats ther dumb asses loaing all kinds bs to pp who cant pay and alot more other junk fast loans they took full adavagae of bad side of it to rip off pp adjustabale apr bs demcrats said f u were goan let u fall hard see it comming ok why they dint sighn shit this companyt taking adavatage of pp dems seen it said they will fall soon let them bastereds go under now that they did these asses want tax pp to buy them out 7 b for all ther crooked shit give mack 10 .6 billobn toward yor own copmapny start over lol jerk off fanny crooked relpican that owns the shit then blame us for not passing this bill to stop them reform them lol outta mind fanny your fult u suffer use your ceo bonus to build your shit back up for your big ass dumb desions on loans ect yuor fult dont blame us or ask us for 700 billon now that u screwed up so bad to get u back on top so u can keep that 10 .6 billon profit u made in 3 mo f u put it back in your own shit leave us hell alone simple as that
Posted on September 28th, 2008 at 5:18 pm
they all ready took 700 nbillon from us adjust bs scam apr loans screw them guys go demacrats just sick this bs company let them die gov will buy it we own it starin all back out fixed apr will own it now them guys are out fired or moved to jamica now soon get his billons and run watch only person to blame is that fany fag company blame u dont see mcdonlds restunt lose a shit load money then say well they didnt regulate us on beef we got from china made ever one sick and hmm we want tax payer sto pay us 700 billon so we can rebuild again fuck u all over agian for 20 yrs so please help us lol screw these fanny pp ok they did it on ther own stupid ass shit justto fuck us over more all pp they loan to adjust apr now they wannnt to fuck us more 700 billon i dont getthat bush hurrys sighns a bill says u better fricking sighn this by fri or pay out your ass just anther scam glad ther waiting looking deep were still here lol we got bikes too if came to 5 gallon pp will buy bikes fuck them big oil bank bs ran crap tell bush enron bail them guys out record profitthey scred us outta of for this war this hi gas price better be paying for dam war not going to enron as dam profit in this time ok screw them
Posted on September 28th, 2008 at 5:27 pm
The bill was opposed because of an amendment that would not allow not for profits to register people to vote, talk about political issues(candidates could not come to a neighborhood to talk about his/her position and how things would change if elected, etc). Seniors who used the funds would be affected; Many not for profits bus senior citizens to the polls on voting day; they would be prohibited from doing that. In short, the amendment was unconstitutional.
Also: this bill would not have regulated Fannie Mae and Freddie Mac; it would essentially tie the hands of HUD and allow Fannie Mae and Freddie Mac to borrow from the Treasury whenever it wanted to(something that they are doing right now).
Posted on September 28th, 2008 at 8:28 pm
The bill would have regulated Fannie Mae and Freddie Mac. I will look up whether there was amendment added to the bill which was possibly unconstitutional, but I highly doubt it.
Posted on September 29th, 2008 at 10:40 am
Many people on both sides of the aisle benefited from Fannie and Freddie. Actually, It was Sen. Chuck Hagel who wanted to reign in Fannie and Freddie.
Posted on October 2nd, 2008 at 6:09 am
McCain’s statement is right there in black and white. McCain clearly saw the problem and tried to do something about it. The Democrats repeatedly blocked legislation, and stated that there were no problems at Fannie Mae and Freddie Mac. They told the OFHEO regulator that he didn’t know what he was talking about.
None of which should be too surprising considering the huge amount of money Fannie Mae and Freddie Mac were paying Democrats like Chris Dodd, Barack Obama, John Kerry, Hillary Clinton etc. They paid those guys off to protect them from regulation that would have reduced their profits by curbing the accounting fraud that was rampant at both companies. And now the people that were paid off are in charge of putting this new financial bailout plan together. It would be funny if it wasn’t so sad.
Posted on October 2nd, 2008 at 6:55 am
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