As should have been expected, Presidential politics has raised it’s ugly head during the economic crisis we are in and especially since negotiating began on a $700 billion bailout plan to buy bad mortgage loans from mortgage companies and remove them from the books. Barack Obama has openly stated that John McCain and his support for President Bush’s economic policy is to blame for the current Wall Street blues. Maybe that policy did have a contributing factor, but for Obama to blame McCain or President Bush is like the pot calling the kettle black.
If you dig a little deeper and go beyond the rhetoric coming from the Obama campaign, you will find that John McCain actually co-sponsored Senate Bill S.190, the Federal Housing Enterprise Regulatory Reform Act of 2005. Below, you will find the text of the speech he gave on the floor of the Senate on May 25, 2006, announcing his co-sponsor and urging his fellow Senators to support the bill. Source is GovTrack.
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.
At least, John McCain was trying to sound a warning and let his Senate colleagues know there was a problem looming on the horizon. Let’s see where Barack Obama was standing at the time.
For instance, we know Barack Obama was the politician who received the second most contributions from Fannie Mae and Freddie Mac, behind none other than Christopher Dodd. You remember who he is, right? He is one of the Senators crying out so loud, telling us we have to accept the bailout because it is the only way out. Not only that, but Obama was also receiving advice on mortgage and housing issues from Franklin Raines, the former head of Fannie Mae. Source is The Washington Post. He is the gentleman who was forced out of his CEO job because of way too many accounting irregularities. Sounds like a cozy little group to me. You can visit Mountain Sage to watch a video that details the relationship between Obama and people like Franklin Raines, with supporting links at the bottom of the article.
I am not trying to convince you that President Bush and the Republicans do not share some of the blame for this crisis we find ourselves in today. Their part in ignoring the regulation problems on Wall Street certainly played a part in leading to where our country is, economically. However, I am tired of seeing John McCain castigized for not having done enough or having done too much to insert himself into this process, when it is very apparent that Obama and his cronies have clearly just as much blame, if not more, than President Bush and the Republicans.
Put simply, John McCain can do nothing but wrong, according to the media and they are giving Barack Obama a free walk to go past Go and collect his $200. The media doesn’t put it that way, of course, but that’s what is happening. They fully intend for Obama to win this election and God help anyone or anything that gets in the way.
That’s my take!