Rahm Emanuel Was Freddie Mac Board Member When They Cooked The Books

Astonishing. Change. Yep, this is a glimpse at the near future under Barack Obama. He is going to bring about lots of change. He offered the position of Chief of Staff to Rahm Emanuel.

There are many disturbing aspects to this pick. Emanuel may be a genius in tax evasion. He may be part of the Illinois corruption machine, I wonder if Rezko is going to out Emanuel too. He is extremely partisan, possibly more so than Obama himself.

The most disturbing is his past position as a Clinton appointed Board of Director at Freddie Mac during the time it was deceiving investors. This is the change that Obama wants to bring about. Freddie Mac & Fannie Mae are the leading cause of today’s financial crisis and Barack is bring in one of the people responsible for the meltdown to be his Chief of Staff.

Not to mention his extensive ties to Wall Street. He spent many years working as an investment banker and earned millions, he also has received about $1.5 million in campaign funds from Wall Street, making them his single largest financial backer. This year alone, Wall Street backed him heavily even though he had no real competition, he was the large recipient in the House. 

My fellow Americans who voted for Barack Obama you have been duped. Your vote was stolen from you.

More Change You Can Believe In!

President-elect Barack Obama’s newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot “red flags,” according to government reports reviewed by ABCNews.com.

Rahm_Emanuel

According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.

Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having “failed in its duty to follow up on matters brought to its attention.”

In a statement to ABCNews.com, a spokesperson said Emanuel served on the board for “13 months-a relatively short period of time.”

The spokesperson said that while on the board, Emanuel “believed that Freddie Mac needed to address concerns raised by Congressional critics.”

Freddie Mac agreed to pay a $50 million penalty in 2007 to settle the SEC complaint and four top executives of the Federal Home Loan Mortgage Corporation were charged with negligent conduct and, like the company, agreed to settle the case without admitting or denying the allegations.

The actions by Freddie Mac are cited by some economists as the beginning of the country’s economic meltdown.

The federal government this year was forced to take over Freddie Mac and a sister federal mortgage agency, Fannie Mae, pledging at least $200 billion in public funds.

Freddie Mac records have been subpoenaed by the Justice Department as part of its investigation of the suspect accounting procedures.

Emanuel was named to the Freddie Mac board by President Bill Clinton in 2000 and resigned his position when he ran for Congress in May, 2001.

During the years 2000, 2001 and 2002, according to the SEC, Freddie Mac substantially misrepresented its income to “present investors with the image of a company that would continue to generate predictable and growing earnings.”

The role of the 18-member board of directors, including Emanuel, was not addressed in the SEC’s public action but was heavily criticized by the oversight group (OFHEO) in 2003.

The oversight report said the board had been apprised of the suspect accounting tactics but “failed to make reasonable inquiries of management.”

The report also said board members appointed by the President, such as Emanuel, serve terms that are far too short “for them to play a meaningful role on the Board.”

As a Congressman, Emanuel recused himself from any votes dealing with Freddie Mac until just this year.

In dealing with the nation’s economic crisis, the new White House chief of staff will almost certainly be involved in discussions about the house and mortgage markets.

Emanuel’s spokesperson said, “As White House chief of staff he will work with President-elect Obama and his economic advisers to help ensure we protect taxpayers and homeowners.”

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Barack Obama+Fannie Mae+Freddie Mac = Financial Disaster

Unfortunately John McCain did not go after Barack last night with the truth. John, please in the next debate bring this too the table along with everything Sarah has been doing. This is what the American people need to here from you. This will instill their confidence. The Presidential Debates are were you can reach out to those undecided voters. 

Democrats Omit Freddie & Fannie From Investigation Into Financial Collapse

Congressional Liberals are still trying to avoid being blamed in the financial crisis. In order to prevent themselves from being implicated they are trying to keep Fannie Mae and Freddie Mac out of ANY investigation into the collapse of the financial market which started with Fannie and Freddie…

Congressional Democrats and Republicans traded accusations Monday over what and whom to blame for the financial crisis amid startling new revelations surrounding the bankruptcy of the Lehman Brothers investment bank. 

Democrats aimed their harshest attacks at deregulation and CEO pay, using former Lehman Chairman and Chief Executive Officer Richard Fuld as an example during a recess hearing of the House Oversight and Government Reform Committee. 

Chairman Henry Waxman (D-Calif.) also released internal documents showing Lehman’s compensation committee recommended $20 million in “special payments” to three departing executives on Sept. 11, four days before the firm filed for bankruptcy.
 

Republicans, for their part, launched a campaign to pin the financial meltdown on Fannie Mae and Freddie Mac, and attacked Waxman for not holding a hearing to dig into the now-nationalized mortgage giants.

“Any hearing on oversight that does not begin with Fannie and Freddie and [former Fannie Mae CEO] Franklin Raines will be a sham,” said Rep. John Mica (R-Fla.). “This is like investigating a train robbery and only talking to the dining car stewards.”

The GOP attack from the dais came as the National Republican Campaign Committee and House Minority Leader John Boehner (R-Ohio) sent nearly simultaneous news releases criticizing Fannie and Freddie.

Boehner’s statement echoed Mica’s, saying, “Chairman Waxman’s refusal to hold hearings to examine their role says a lot about where the Democrats’ priorities lie.”

The mortgage giants aren’t part of the five-hearing investigation Waxman is planning for the rest of October, but Waxman said he is looking into their failure. He said committee staffers are reviewing documents and he might call a hearing.

“I don’t think we ought to use these hearings to be partisan,” Waxman said. “To look at Lehman is appropriate. To look at Fannie Mae and Freddie Mac is appropriate.”

Waxman also retorted that looking back at Congress’s interaction with Fannie Mae could be dangerous territory for the GOP, since it controlled Congress for 12 years until 2007.

The presidential campaign played a key role at the hearing, with Republicans pointing to Barack Obama’s national finance chairman’s involvement in a bank failure, and Democrats highlighting an embarrassing e-mail from President Bush’s cousin, a Lehman board member, that mocked attempts to rein in executive compensation.

The e-mails showed Fuld and Bush’s cousin, George H. Walker, mocking a recommendation from a Lehman subsidiary that executives give up their bonuses.

“Sorry team,” Walker wrote in the e-mail. “I’m not sure what’s in the water at 605 Third Avenue [the address of the subsidiary] today. I’m embarrassed and I apologize.”

Fuld added in an e-mail, “Don’t worry, they are only people who think about their own pockets.”

In a two-hour run-up to Fuld’s testimony, Democrats chomped at the bit to sink their teeth into the former CEO, having pored over his prepared statement and found he did not take responsibility for Lehman’s failure. 

“He’s going to come in here and say it was everybody’s fault but his own,” said Rep. Elijah Cummings (D-Md.). “The people on my block, in Baltimore, if they do poorly, they get fired. They don’t get a bonus.” 

But Fuld, who’d listened to the first part of the hearing, headed off the lawmakers when he sat down at the witness table by taking responsibility.

“I want to make one thing clear,” Fuld said. “I take full responsibility for the decisions I made and the actions that I took. With the benefit of hindsight, would I have made decisions differently? Yes.”

Waxman, though, faulted Fuld for not acknowledging anything he’d done wrong. He also tallied Fuld’s compensation from 2000 to 2007 at $484.5 billion, and noted that Lehman’s shareholders have lost their investment and the economy has been plunged into chaos.
 

“Is this fair?” Waxman asked.

Fuld took off his glasses and shifted in his seat. He said he wasn’t paid that much, and he and Waxman eventually agreed he’d been paid $350 million. But he never answered Waxman’s question of fairness.

In his prepared testimony, Fuld said the financial crisis was greater than any single firm.
 

“As incredibly painful as this is for all of those connected to or affected by Lehman Brothers — this financial tsunami is much bigger than any one firm or industry,” Fuld said.

Fuld resisted efforts by Republicans to tie Lehman’s bankruptcy to Fannie Mae. 

When Mica asked what Lehman’s financial exposure was to the mortgage buyer, Fuld demurred. “De minimis,” he said. 

Mica then held up Lehman’s contributions and lobbying expenditures of $300,000 over 10 years, and said Fannie Mae spent $175 million during the same time.

“You were out-lobbied,” Mica said. “What would you say to that?”

Fuld again held back, saying, “I think that’s more a matter for your committee.”

He also bucked Democrats’ attempts to see if he’d say that Treasury Secretary Henry Paulson’s ties to Lehman rival Goldman Sachs biased him against bailing out Lehman and helping Goldman trading partner AIG.

But he did make it clear that he still didn’t understand why the federal government bailed out other companies, but not his.

“Until the day they put me in the ground, I will wonder,” Fuld said. “I do not know why we were the only one.”

An Inconvenient Truth For Liberals

The truth behind the economic crisis. Liberals would have you believe that this is all the fault of McCain. They use the Bush administration as a proxy to attack McCain. The truth of the matter is the Bush administration, McCain and the conservative base has been warning and trying to prevent this mess.

Timeline

Money For Nothing

Detailed points of 2004 attempt to regulate Fannie Mae and Freddie Mac by Conservatives and the undermining by Liberals in Congress. Please listen to the whole think. Listen to the Money Made by the leaders of Fannie Mae…

 

 

Supplement Bailout By Having Banks Contribute Through Insurance Purchases

The Republicans want the bailout to implement an insurance program to reduce the taxpayers liability and risk in the bailout of financial giants. The plan would require the banks to pay for insurance on some of the mortgage risk, thus reducing the amount of money the government must use to purchase these bad mortgages. This is good for us as taxpayers, I am curious on how much they would be responsible for and how much of a reduction it would be on the bailout numbers…

I would like to see the banks have to be responsible for at least half of the amount.

After temporarily derailing the Bush administration’s $700 billion proposal to bail out the financial system on Thursday, House Republicans pared back their goals on Friday and demanded that the plan rely at least partly on an industry-financed insurance program for troubled mortgages.

Issuing a vague declaration of “economic rescue principles” to limit the use of taxpayer money, the Republican lawmakers focused primarily on the insurance program.

The proposal would have banks and investment firms that own mortgages and mortgage-backed securities pay premiums for insurance that would guarantee them against losses if the mortgages default.

Supporters of the plan said it would restore confidence in mortgage-backed securities without putting taxpayer money at risk. “Instead of making the taxpayers pay, the securities holders would pay,” said Representative Paul Ryan, a Wisconsin Republican who helped create the plan.

That would be sharply different from the plan developed by Treasury Secretary Henry M. Paulson Jr., which would have the government buy up to $700 billion worth of currently unsalable mortgage-backed securities.

Treasury officials have argued that their plan would address the heart of the financial crisis, which is that banks and investment firms are holding vast quantities of securities that have little or no market value. By having the government buy up and hold those securities until the panic dies down, Mr. Paulson has been hoping to free the balance sheets of financial institutions, allow them to raise fresh capital from investors and start making loans again.

But Republican lawmakers said on Friday that they were not trying to scrap Mr. Paulson’s plan entirely. Instead, they said, they would simply try to insert an insurance program into the overall package.

“We don’t want to undermine the negotiations,” Mr. Ryan said. “We want to honor the spirit of the negotiations.”

That was a retreat from Thursday, when John A. Boehner of Ohio, the House Republican leader, told President Bush and Democratic Congressional leaders that most House Republicans would oppose the administration’s plan.

The idea of the insurance plan, championed by Representative Eric Cantor of Virginia, was to reduce uncertainty and restore confidence without actually using taxpayer money.

The federal government would guarantee the underlying mortgages in a mortgage-backed security, much as Fannie Mae and Freddie Mac have done for years and as the Federal Housing Administration does, as well.

In theory, the cost of that insurance would be borne by the companies that hold the mortgages or mortgage-backed securities.

Treasury officials had already told Republican lawmakers they had considered an insurance approach, but rejected it. The problem, from Mr. Paulson’s standpoint, was that insuring against mortgage defaults would do little to increase liquidity, or the amount of money available for making loans. By contrast, the Treasury plan would inject hundreds of billions of dollars in fresh, although borrowed, money into the marketplace.

But the insurance plan could pose other risks to taxpayers. The government would be insuring the riskiest and most default-prone mortgages made during the housing bubble, including loans that required no down payment and no income verification by the borrowers.

The allure of insuring mortgages, rather than buying them as Mr. Paulson would, is that the government would not have to put up any taxpayer money. But because the government would be guaranteeing nearly all mortgages in the country, since it already owns Fannie Mae and Freddie Mac, taxpayers could face big losses if losses from defaults turn out to be higher than expected.

Many House Republicans, including Mr. Ryan, had come up with a far more detailed rival plan earlier in the week that included Republican policy evergreens like new tax breaks and more flexible regulation as well as the insurance idea.

Some lawmakers wanted to at least temporarily eliminate taxes on capital gains and dividends, though senior Republicans knew they had no chance of getting that past Democratic leaders.

Members of the Republican Study Group, a group of conservative House Republicans, proposed lifting the mortgage market by letting companies reap retroactive tax rebates from their current losses. A company would be able to apply its losses this year against its profits from any of the last five years and get a rebate for taxes it had already paid.

But with lawmakers hoping to wrap up their work by Monday, Republicans dropped the idea as impractical because it would take too long for the Joint Committee on Taxation to estimate the measure’s cost.

On the regulatory front, some House Republicans championed the idea of relaxing what are known as mark-to-market rules that require investment firms to revise the value of their securities in line with changes in market prices of those securities.

Over the last year, Wall Street’s biggest investment banks have been forced to take huge write-downs on mortgage-related holdings, not because the securities were actually losing money but because the securities had become almost impossible to sell in the open market. For many securities, especially the arcane derivative securities known as “collateralized debt obligations,” there are virtually no buyers and no market prices.

“If you don’t have to sell the securities today, you shouldn’t have to mark it at today’s value,” said Peter Ferrara, a senior researcher at the Institute for Policy Innovation, a research group in Virginia with ties to many Republican lawmakers.

But Mr. Ryan said the issue was complicated. While critics of the current rules complained that they artificially understated a company’s financial position, other experts argue just as vehemently that marking to market is a crucial way of preventing companies from covering up bad investments.

Freddie, Fannie and Mac Daddy Obama

The liberals outright deny any responsibility for the Fannie Mae and Freddie Mac fallout. They squarely point the finger at Bush and McCain.

Well something the Fourth Column will not report well on is how this is the liberals fault.

Back in 2005 Daniel Mudd gave a speech to the Black Caucus, including Barack Obama. In his speech he indicated Fannie Mae was in trouble because it had lent more money to minorities and undeserved individuals than any other company in history.

Mudd’s “Family” represents a good number of the minorities that Fannie Mae and Freddie Mac gave mortgages to… Think about it people. This was his “Conscience” and his conscience remained silent in hopes of getting a little coin into their own pockets.

What has Obama done since then to bring this problem to light? Nothing. What has Obama done since then to prevent this fallout? Nothing. What has Obama gained from this? $126,349 

I am still looking for an article about a democrat bill passed in the late 90’s that opened up the mortgage industry to financial institutions that had previously been restricted… 

Is this the man you want running America? No.

 

A stunning example of the incredible disconnect between the mainstream media and the blogosphere is this video of the interim Fannie Mae CEO, Daniel Mudd, addressing the Congressional Black Caucus, including Barack Obama, at their swearing-in ceremony in 2005. Although this video is spreading quickly in the blogosphere, you have yet to see or hear anything about it in the MSM. As you can see in the video, Mudd talks about the problems of Fannie Mae yet that didn’t keep Obama and other Democrats from taking large contributions from that organization or doing anything to try to fix it. Here is a transcript of CEO Mudd addressing the Democrats (emphasis mine):

Good morning members of the Congressional Black Caucus. I am humbled to come here today to reaffirm the friendship and partnership between Fannie Mae and the Congressional Black Caucus. Fannie Mae is determined to keep tearing down the barriers to deliver on the American dream and that means we need to work together with the CBC. So many of you have been good friends to Fannie Mae and our mission. You’ve been friends through thick and thin. We have indeed come upon a difficult time for Fannie Mae. There is much to be done inside my company and I humbly ask you to help us and to help me. If there are areas where we are missing. If there are areas where we could do better, we’d like to hear it from our friends and I’d be so bold as to say our family first.

It is true that Fannie Mae has lent more money to more minorities and more underserved individuals than any single company in history. 

We will work hard inside our company to resolve the serious matters before us to put our house in order and to forge a new future. And all the while you will see Fannie Mae reaching out and listening to the caucus. Over a century of endeavor you have earned the reputation as the conscience of Congress. In many ways I want to tell you today you are also the conscience of Fannie Mae. Keeping us on course to serve those who need serving the most.

As of this writing, a check on Google News shows NO news outlet has so much as mentioned this video despite the fact of Obama being present and later receiving $126,349 from Fannie Mae. Ask yourself this, if the CEO of Fannie Mae had addressed a similar “family” speech to a group of congressional Republicans who had received big donations from that organization, do you not think the video would have already appeared on the nightly news of the major networks? 

H/T: Gateway Pundit

 

Now John McCain has finally gotten the balls up to say it like it is. Barack Obama had his hands in the Freddie Mac & Fannie Mae Cookie Jar... 

ObamaMac

Senator Obama talks a tough game on the financial markets but the facts tell a different story. He took more money from Fannie and Freddie than any Senator but the Democratic chairman of the committee that regulates them. He put Fannie Mae’s CEO who helped create this disaster in charge of finding his Vice President. Fannie’s former General Counsel is a senior adviser to his campaign. Whose side do you think he is on? When I pushed legislation to reform Fannie Mae and Freddie Mac, Senator Obama was silent. He didn’t lift a hand to avert this crisis. While the leaders of Fannie and Freddie were lining the pockets of his campaign, they were sowing the seeds of the financial crisis we see today and enriching themselves with millions of dollars in payments. That’s not change, that’s what’s broken in Washington.

At Iowa, McCain “gets in your face” mano a mano (that is, he doesn’t delegate his surrogates, but gives a speech to America, Obama included), and he focuses on the facts.  This is a very concrete speech, which appropriately boasts his virtues and clearly exposes Obama’s failings:

U.S. Senator John McCain will deliver the following remarks as prepared for delivery in Cedar Rapids, IA, today:

I’m happy to be introduced by Governor Palin, but I can’t wait until I introduce her to Washington. Let me offer an advance warning to the big spending, greedy, do nothing, me first, country second crowd in Washington and on Wall Street: change is coming.

We need reform in Washington and on Wall Street. The financial markets are in crisis. Times are tough. Enormous strain is being put on working families and individuals in America. I know that the events unfolding can be difficult to understand for many Americans. The dominoes that we have seen fall this week began with the corruption and manipulation of our home loan system. The reason this crisis started was the abuses that took place within our home loan agencies, Fannie Mae and Freddie Mac and within our home loan system.

Two years ago I warned this Administration and Congress that regulations for our home loan agencies, Fannie Mae and Freddie Mac, needed to be fixed.

But nothing was done.

Senator Obama talks a tough game on the financial markets but the facts tell a different story. He took more money from Fannie and Freddie than any Senator but the Democratic chairman of the committee that regulates them. He put Fannie Mae’s CEO who helped create this disaster in charge of finding his Vice President. Fannie’s former General Counsel is a senior adviser to his campaign. Whose side do you think he is on? When I pushed legislation to reform Fannie Mae and Freddie Mac, Senator Obama was silent. He didn’t lift a hand to avert this crisis. While the leaders of Fannie and Freddie were lining the pockets of his campaign, they were sowing the seeds of the financial crisis we see today and enriching themselves with millions of dollars in payments. That’s not change, that’s what’s broken in Washington.

There was no transparency into the books of Wall Street banks. Banks and brokers took on huge amounts of debt and they hid the riskiest investments. Mismanagement and greed became the operating standard while regulators were asleep at the switch.

The primary regulator of Wall Street, the Securities and Exchange Commission (SEC) kept in place trading rules that let speculators and hedge funds turn our markets into a casino. They allowed naked short selling — which simply means that you can sell stock without ever owning it. They eliminated last year the uptick rule that has protected investors for 70 years. Speculators pounded the shares of even good companies into the ground.

The Chairman of the SEC serves at the appointment of the President and has betrayed the public’s trust. If I were President today, I would fire him.

We cannot wait any longer for more failures in our financial system. Structures like the resolution trust corporation that dealt with the failed savings and loan industry were designed to clean up the system and worked. Today we need a plan that doesn’t wait until the system fails. I am calling for the creation of the mortgage and financial institutions trust — the MFI. The priorities of this trust will be to work with the private sector and regulators to identify institutions that are weak and take remedies to strengthen them before they become insolvent. For troubled institutions this will provide an orderly process through which to identify bad loans and eventually sell them.

This will get the treasury and other financial regulatory authorities in a proactive position instead of reacting in a crisis mode to one situation after the other. The MFI will enhance investor and market confidence, benefit sound financial institutions, assist troubled institutions and protect our financial system, while minimizing taxpayer exposure. Tomorrow I will be talking in greater detail about the crisis facing our markets and what I will do as President to fix this crisis and get our economy moving again.

Senator Obama has never made the kind tough reform we need today. His idea of reform is what his party leaders in Congress order him to do. We tried for bipartisan ethics reform and he walked away from it because his bosses didn’t want real change. I know how to make the change that Senator Obama and this Congress is afraid of. I’ve fought both parties to shake up up Washington and I’m going to do it as President.

Those same Congressional leaders who give Senator Obama his marching orders are now saying that this mess isn’t their fault and they aren’t going to take any action on this crisis until after the election. Senator Obama’s own advisers are saying that crisis will benefit him politically. My friends, that is the kind of me-first, country-second politics that are broken in Washington. My opponent sees an economic crisis as a political opportunity instead of a time to lead. Senator Obama isn’t change, he’s part of the problem with Washington.

When AIG was bailed out, I didn’t like it, but I understood it needed to be done to protect hard working Americans with insurance policies and annuities. Senator Obama didn’t take a position. On the biggest issue of the day, he didn’t know what to think. He may not realize it, but you don’t get to vote present as President of the United States.

While Senator Obama and Congressional leaders don’t know what to think about the current crisis, we know what their plans are for the economy. Today Senator Obama’s running mate said that raising taxes is patriotic. Raising taxes in a tough economy isn’t patriotic. It’s not a badge of honor. It’s just dumb policy. The billions in tax increases that Senator Obama is proposing would kill even more jobs during tough economic times. I’m not going to let that happen.

I have seen tough times before. I know how to shake-up Wall Street and Washington. I will get this economy moving. I will lead us through this crisis by fighting for you, and when I am President we will be stronger than ever before.

UPDATE: McCain’s there. Congress is not. For a good analysis of the Democrat Congress’ pusillanimous conduct with regard to the current economic situation, please go here. The only saving grace in their show of cowardice is that, given their political/economic views, it’s probably better for the economy if they run away.

Who will clean up this mess?… Not Obama and Biden.

Conservatives will be left cleaining this up…

C. Edmund Wright
Grown ups are always having to step in and clean up the messes left by the children. Such is the case all too often in our government.    

It was announced yesterday that the Treasury is going to take over the two huge quasi-public lending corporations Fannie Mae and Freddie Mac. In short, without doing this the housing markets would have continued to decline and more problems would have been manifest throughout the entire finanical industry. When you calculate the loss of wealth as home prices and stock prices continue to decline, the consequences would have been almost unthinkable. This is wealth counted on by a lot of middle class taxpyers who depend on their home value and their 401K’s for retirement.
(For this reason, do not get swayed by the taxpayer protection arguments against this move. As a taxpyer, and a home owner, this is a win on balance. It will help the value of homes and it may or may not cost the taxpayer. The Chrysler take over decades ago actually ended up benefitting the taxpayers.)
As Treasury Secretary Hank Paulson said this morning on CNBC’s Squawk Box,
“I’m not happy about it…but it had to be done. I have to fight the battle that is in front of me.” Paulson went on to say that the problem with Fannie and Freddie were ingrained in their respective charters, which is to say put together by Democrat controlled congresses decades ago. Paulson, in great new tone fashion, did not mention which party controlled congress when these charters were drawn up. But I will.
Stock picking guru Jim Cramer, who applauded the move by Paulson, admitted that Fannie and Freddie were in the back pockets of Democrats in Congress. Cramer is normally a big Democrat, though his opinions today indicate that he would be doing intellectual gymnastics to stay that way. These are the two lenders, by the way, that  donated millions to Jesse Jackson’s various racial organizations over the years. These are the two organizations that backstopped big liberal Anthony Mozillo as his Countrywide Mortgage Corporation sold “predatory” mortgages to undeserving (and apparently financially illiterate) borrowers over the years so he could hand out sweetheart deals to congressional Democrats like Chris Dodd and others.
Warren Buffet, the billionaire investor, also applauded the move by Paulson as “exactly the right thing” to do  and indicated that these problems are decades in the making. Buffet was mum on the fact that these institutions are the Democrat’s babies and did not elaborate on just what “decades in the making” meant.
Many of the so-called “creative mortgages” were designed in response to politically correct and racially motivate legislation demanding that lenders have more minorities in their customer portfolio. Again, this was not something that came from the right side of the aisle.
And all of this came crashing down as the oil markets soared and people in the sub prime market had to choose between groceries, gas or mortgage payments. More liberal policies at work when you look at our energy situation over the past 30 years of course. Choosing to pay the former, these defaulting mortgages jump-started the mortgage-housing meltdown. These problems were the worst, of course, in liberal-controlled states like Michigan and California where government has driven businesses away and taxes up. And the result has been a cascading down of home values, bank failures and more deterioration of millions of 401K plans. It’s no wonder that Dick Armey says that “economic illiteracy” is required to join the Democrat caucus in congress.
So today, the grown ups had to step in and do what they did. This may or may not be good for the taxpayer in all of us. It is certainly necessary for the stockholder and homeonwer in all of us. Even if you don’t own a home, this is good for you since having your landlord go broke will not help anyone.
The conservative philosopher in us is split, of course. This is kind of a quasi-socialist step that was needed to correct what were simply liberal fallacies. (makes you wonder if there was a grand plan afterall?) Free marketeers cannot like this part of it. The worst part could the precedent it might set for the auto industry, ailing of course thanks to the liberal energy policies on top of liberal union power.