Thank you Clinton for the Sub-Prime Boom! 1999 NYT Article

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Submitted by michael on October 11, 2008 - 6:29pm

September 30, 1999

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES
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.

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 and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

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.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

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 change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

Submitted by jpinpb on October 11, 2008 - 6:58pm.

And for the past 8 years the Bush administration turned a blind eye.

Submitted by kewp on October 11, 2008 - 7:02pm.

And prime ARM-resets are about five times a bigger problem then sub-prime.

And they haven't happened yet!

Submitted by michael on October 11, 2008 - 7:31pm.

http://www.whitehouse.gov/news/releases/...

For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.

2001

April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

2002

May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

2003

January: Freddie Mac announces it has to restate financial results for the previous three years.

February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

2004

February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

2005

April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

2007

July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)

2008

January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase.

March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)

"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)

"Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failin

Submitted by patientrenter on October 11, 2008 - 7:40pm.

The NAR, mortgage brokers, and others had many Republicans in their ranks who wanted the Fannie and Freddie party never to stop. But Freddie and Fannie are the Democrats' babies. Both parties are fully to blame for what happened. So are the borrowers and the intermediaries (like the mtg brokers and inv bankers and rating agencies etc.)

Submitted by HereWeGo on October 11, 2008 - 7:43pm.

FNM and FRM were as much victims as perpetrators. The great majority of the bad paper out there does not involve FNM or FRM.

Submitted by jpinpb on October 11, 2008 - 7:49pm.

Least we conveniently forget all the other banks and lending institutions that played a part in this whole meltdown, not to mention AIG.

I think Clinton's original intent was that there be no discrimination in lending w/regard to Fannie and Freddie. It spiraled from there. The road to hell is paved w/good intentions.

So what excuse is there for all the other banks? You know, the ones basking in their wealth.

Submitted by Veritas on October 11, 2008 - 7:49pm.

"Their lobbying activities were legendary. Between 1998 and 2008, Fannie spent $79.5 million and Freddie spent $94.9 million on lobbying Congress, making them the twentieth and thirteenth biggest spenders, respectively, on lobbying fees during that period." Congress should legalize prostitution since they have been engaging in it for years.

Submitted by patientrenter on October 11, 2008 - 8:00pm.

Veritas, I'm OK with prostitution. But I am not OK with corruption that ends up costing taxpayers and others trillions in losses. That's what happened here. Corruption flowed to the Dems through Fannie and Freddie, and corruption flowed to the Reps through NAR, mortgage brokers etc. And there was lots of shared corruption too. Goldman and other banks up to their knees in this were more Dem than Rep, and there were Reps getting money from Fannie/ Freddie.

Submitted by jpinpb on October 11, 2008 - 9:09pm.

Do I have to be the one to comment about the 85+ billion funneled to AIG for starters? I kinda wonder who the other 20 big spenders were.

Submitted by TheBreeze on October 11, 2008 - 9:34pm.

I'd like to take this opportunity to thank Clinton for 8 years of uninterrupted prosperity. There's no question that the Clinton years were the most beneficial to all Americans out of the last 50 years. There was an unprecedented bull market, commodity prices declined, inflation was kept in check, innovation flourished, and every American had a chance to be successful.

Thank you, Bill. You were the greatest President of the last 50 years. May Obama clean up the messes of the current President Chimpy Bush as you cleaned up the messes of Bush I the Failure.

Submitted by jpinpb on October 11, 2008 - 10:08pm.

You neglected to mention the surplus that we had w/Clinton, in contrast to the deficit we have now.

Submitted by CardiffBaseball on October 12, 2008 - 2:01am.

First off to the OP, on blaming Clinton, who the hell cares. Any nitwit in DC over the last 8-10 years could have spoken up about this without being a Monday morning QB.

As far as thanking Bill, you chaps ought to thank Dick Morris who told Hillary and staff to get the fvck out of the room so that Bill could "triangulate". You know when she went all "Tammy Wynette"... Let's not forget Bill was floundering those first two years, and after losing both houses of congress in a crushing defeat, he brought Morris in to save the day (again). If I had any sense that Barry would triangulate republican policies like Bill did, I might be willing to pull the Obama lever.

Submitted by jficquette on October 12, 2008 - 8:25am.

jpinpb wrote:
And for the past 8 years the Bush administration turned a blind eye.

Does that mean you disagree with the 1999 legislation?

Submitted by urbanrealtor on October 12, 2008 - 8:36am.

jficquette wrote:
jpinpb wrote:
And for the past 8 years the Bush administration turned a blind eye.

Does that mean you disagree with the 1999 legislation?

The issue with legislation is that its execution is as important (sometimes more) than its passage.
I think you guys are really arguing past each other and not at each other.

Would you disagree John?

Also a fun article for fiscal conservatives.
Check the graph at the top.
Notice the years.

http://en.wikipedia.org/wiki/United_Stat...

Submitted by urbanrealtor on October 12, 2008 - 8:43am.

CardiffBaseball wrote:

As far as thanking Bill, you chaps ought to thank Dick Morris who told Hillary and staff to get the fvck out of the room so that Bill could "triangulate".

As much as I hate the dude, you are probably right on this.

Dicky was a tool but his political acumen is impressive.

He is sort of the slightly less evil version of Karl Rove.

If you want an apples to apples comparison, he was a director in the 2000 Fox campaign in Mexico. James Carville held the same position on the opposing ticket for Labastida. Fox won pretty decisively. Not bad for a prick advising a midwesterner from Guanajuato.

Submitted by jficquette on October 12, 2008 - 8:51am.

urbanrealtor wrote:
jficquette wrote:
jpinpb wrote:
And for the past 8 years the Bush administration turned a blind eye.

Does that mean you disagree with the 1999 legislation?

The issue with legislation is that its execution is as important (sometimes more) than its passage.
I think you guys are really arguing past each other and not at each other.

Would you disagree John?

Also a fun article for fiscal conservatives.
Check the graph at the top.
Notice the years.

http://en.wikipedia.org/wiki/United_States_public_debt

Why when presented with evidence supporting claims that this mess started with Clinton you come up with nation debt issues?

Why can't democrats stick to issues and facts rather then try to cloud them?

Urban do you think an Obama, Pelosi, Reid led country will actually balance the budget as he claims?

Do you really even care that the budget is balanced?

John

Submitted by jficquette on October 12, 2008 - 8:54am.

jpinpb wrote:
You neglected to mention the surplus that we had w/Clinton, in contrast to the deficit we have now.

The surplus was due to the Republican's reform of welfare and other items in its contract with America passed in 1994.

Clinton was just along for the ride.

Submitted by svelte on October 12, 2008 - 9:18am.

jficquette wrote:
jpinpb wrote:
You neglected to mention the surplus that we had w/Clinton, in contrast to the deficit we have now.

The surplus was due to the Republican's reform of welfare and other items in its contract with America passed in 1994.

Clinton was just along for the ride.

You neglected to mention that the Republican Congress dismantled the PAYGO balanced budget rules in the early 2000s so they could finance Bush's tax cuts with deficit spending.

Submitted by svelte on October 12, 2008 - 9:23am.

michael wrote:
http://www.whitehouse.gov/news/releases/2008/09/20080919-15.html

For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.

2001

2001 Congress had a Republican majority (svelte addition to text)

April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," ...

2002
2002 Congress had a Republican majority (svelte addition to text)

May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

2003

2003 Congress had a Republican majority (svelte addition to text)

January: Freddie Mac announces it has to restate financial results for the previous three years.

February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

2004

2004 Congress had a Republican majority (svelte addition to text)

February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

2005

2005 Congress had a Republican majority (svelte addition to text)

April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

2007

2007 Congress had a Democratic majority...but the collapse had already started (svelte addition to text)

July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)

2008

January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase.

March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)

"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)

"Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failin

Submitted by urbanrealtor on October 12, 2008 - 9:23am.

jficquette wrote:

Why when presented with evidence supporting claims that this mess started with Clinton you come up with nation debt issues?


Well a lot of this discussion, by which I mean the national dialogue of turmoil and bailout (not specifically this thread) seems to focus on issues of cost to taxpayers.

jficquette wrote:

Why can't democrats stick to issues and facts rather then try to cloud them?

I am a liberal. My party affiliation is incidental (and could change). There have been several occasions where republicans were closer to my line of thinking. So I really cannot speak to your anecdotes regarding democrats. Based on your descriptions, you would think that a maverick and bipartisan Republican (which is a fair description of McCain) would be more successful. However, democracy does not favor you.

jficquette wrote:

Urban do you think an Obama, Pelosi, Reid led country will actually balance the budget as he claims?

I don't know.
But a white trash, Bible-thumping, southern liberal did it. It is true, he was a Rhodes scholar, but its not like he was a some ivory tower intellectual. He was just good at figuring stuff out and acknowledging his weak points and listening to adverse opinions.

On that same topic I don't think it is reasonable to hold a chief executive as innocent and absent from the performance of the nation. Clinton was not along for the ride any more than the Bush administration was.

jficquette wrote:

Do you really even care that the budget is balanced?

As an abstract concept? No,not at all.
What I care is that the burden of debt service not become so cumbersome that we have to print our way out. I think it unlikely that we will ever need to monetize our debt (ala Latin America in the '80s or Zimbabwe now) but I do fear that we will see damaging inflation or increase in the cost of borrowing as a result of being over-leveraged or reduced ability to use fiscal policy as a result of enforced fiscal conservatism.

I think that these are reasonable concerns.
Best example: Japan during the 90's.
[quote=jficquette]

Submitted by jficquette on October 12, 2008 - 10:34am.

Urban,

If you can't balance your budget then eventually you will go bankrupt.

Since you don't think a balanced budget matters then any reference to national debt is odd.

Democrats love to spend that money so they can hire more voters. Borrow from the unborn to stuff the ballot box. Gotta love the dems.

Submitted by TheBreeze on October 12, 2008 - 10:58am.

jficquette wrote:
Urban,

If you can't balance your budget then eventually you will go bankrupt.

Since you don't think a balanced budget matters then any reference to national debt is odd.

Democrats love to spend that money so they can hire more voters. Borrow from the unborn to stuff the ballot box. Gotta love the dems.

Deficit when Chimpy Bush came into office = $5 trillion

Deficit now = $10 trillion

During 6 of the 8 years Chimpy was in office, Republicans also controlled Congress. So Bush and a Republican Congress racked up more debt in 8 years than the total debt racked up by every other Presidential administration in U.S. history. Horrible.

There's no way Democrats could spend more money because Bush has spent the most in history -- and all with the blessings of a Republican Congress.

Submitted by DWCAP on October 12, 2008 - 3:01pm.

jficquette wrote:
jpinpb wrote:
You neglected to mention the surplus that we had w/Clinton, in contrast to the deficit we have now.

The surplus was due to the Republican's reform of welfare and other items in its contract with America passed in 1994.

Clinton was just along for the ride.

No, the surplus Clinton is given credit for was due to the tech bubble. People were day trading stocks like crack and it generated HUGE tax$$$. When it all burst in 2000, it didnt show up till 2001 when we had a new prez. He then latched onto 9/11 as a chance to make a name for himself and get reelected/keep repub's in power. Fiscal disaplin in the repub's broke down then in a rush to get reelected and we ended up roughly doubling our national debt. The housing bubble was used/created to limit the pain of the 1990's stock bubble.

None of the huge increase in the national debt could have happened without the support of the democrats. Why they seem to get a pass on all this is beyond me. I dont care if you are the gettaway driver or the stickup man, both are guilty of robbery.

Submitted by DWCAP on October 12, 2008 - 3:38pm.

TheBreeze wrote:

During 6 of the 8 years Chimpy was in office, Republicans also controlled Congress. So Bush and a Republican Congress racked up more debt in 8 years than the total debt racked up by every other Presidential administration in U.S. history. Horrible.

There's no way Democrats could spend more money because Bush has spent the most in history -- and all with the blessings of a Republican Congress.

Actually the republicans only had control of the house for 6 outa 8 years. Democrats had control of the senate for 4 out of the 8, with the defection of Sen Jeffords to the democrats in June of 2001, six months after the 107th congress started. You may hate Bush with as much passion as I do, but please dont make statements that help wash the democrats of their shame. None of this could have happened with them.
And they can most definatly spend more than Bush, there is no ceiling on stupidity and bad managment in gov.

Fact Check:
.... Both chambers had a Republican majority until June 6, 2001, after which the Senate had a Democratic majority.

http://en.wikipedia.org/wiki/107th_Unite...

Submitted by fm on October 12, 2008 - 4:21pm.

DWCAP wrote:

No, the surplus Clinton is given credit for was due to the tech bubble. People were day trading stocks like crack and it generated HUGE tax$$$. When it all burst in 2000, it didnt show up till 2001 when we had a new prez. He then latched onto 9/11 as a chance to make a name for himself and get reelected/keep repub's in power. Fiscal disaplin in the repub's broke down then in a rush to get reelected and we ended up roughly doubling our national debt. The housing bubble was used/created to limit the pain of the 1990's stock bubble.

I agree about the tech bubble, in the 90's that was the time when the internet and computers became a commonplace feature in the household because technology made it affordable at that time. I don't really see the government having to do much with that.

Submitted by michael on October 12, 2008 - 6:14pm.

"I agree about the tech bubble, in the 90's that was the time when the internet and computers became a commonplace feature in the household because technology made it affordable at that time. I don't really see the government having to do much with that."

What?

Submitted by jpinpb on October 12, 2008 - 6:35pm.

So while comment was made about Fannie and Freddie giving Dems money, turns out 2 million was funneled to Rich Davis and his firm up until August, you know, chief executive officer of the John McCain 2008 presidential campaign.

Fannie and Freddie were more vicitms. Even if they were regulated as Reps wanted, that would've done little to control all the banks and CDS that were occurring.

Submitted by jficquette on October 12, 2008 - 7:06pm.

DWCAP wrote:
jficquette wrote:
jpinpb wrote:
You neglected to mention the surplus that we had w/Clinton, in contrast to the deficit we have now.

The surplus was due to the Republican's reform of welfare and other items in its contract with America passed in 1994.

Clinton was just along for the ride.

No, the surplus Clinton is given credit for was due to the tech bubble. People were day trading stocks like crack and it generated HUGE tax$$$. When it all burst in 2000, it didnt show up till 2001 when we had a new prez. He then latched onto 9/11 as a chance to make a name for himself and get reelected/keep repub's in power. Fiscal disaplin in the repub's broke down then in a rush to get reelected and we ended up roughly doubling our national debt. The housing bubble was used/created to limit the pain of the 1990's stock bubble.

None of the huge increase in the national debt could have happened without the support of the democrats. Why they seem to get a pass on all this is beyond me. I dont care if you are the gettaway driver or the stickup man, both are guilty of robbery.

I agree. It was a once in a generation windfall.

Submitted by patientrenter on October 12, 2008 - 7:46pm.

Fannie and Freddie were knowing and active parties to the fraud on the entire nation that was committed when vast amounts of money were funnelled into the purchase of overpriced homes.

Yes, they were partly tools of Barney Frank and Chris Dodd and other pols, and of Angelo Mozilo and other mortgage fraudsters. And they were partly responding to loose credit conditions fostered by Greenspan and supply-side Republicans and businessmen. But the people running Fannie and Freddie knew exactly what they were doing, and they were pushing to do more of it.

The truth is that there were very few people who are blameless. Close to 90% of the population of this country were hoping for a giant free lunch from ever-rising asset prices of assets bought with other people's money. But leaders of the key institutions bear special responsibility, in order of their power:

1. Congress
2. White House and Treasury/Fed Reserve/ SEC etc.
3. Media (who are leaders of public opinion)
4. Real estate and mortgage industry

Submitted by Shadowfax on October 13, 2008 - 12:25am.

jficquette wrote:
Urban,

If you can't balance your budget then eventually you will go bankrupt.

Since you don't think a balanced budget matters then any reference to national debt is odd.

Democrats love to spend that money so they can hire more voters. Borrow from the unborn to stuff the ballot box. Gotta love the dems.

John,

You been in a cave smokin' crack with bin Laden? Which party over the last 8 years has "spent that money" and "borrow[ed] from the unborn to stuff the ballot box?" I can think of a certain governor from Alaska--not a Dem--who took the $$ and ran with it like a bandit, regardless of whether that damn brige was built or not. Don't be a pot calling the kettle black, John! You are a farce.

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