How We Got Financial Disaster: A Tale Of Democrat Lies And Deceit

For all the media’s irresponsible coverage of the 2008 elections, they were the most blatantly dishonest and biased in their allowing Democrats to use the airwaves to present a blatantly false narrative that Republicans were to blame for the tanking economy due to their “failure to regulate.”

We could go back to House Speaker Nancy Pelosi, who demonized “the Bush administration’s failed economic policies — policies built on budgetary recklessness, on an anything-goes mentality with no regulation, no supervision and no discipline in the system.”  The airwaves have been filled with Democrats and liberals presenting their talking points of Republican recklessness, anything-goes mentalities, and refusal to regulate or supervise the system, with virtually no investigation or even basic fact-checking by the media.

But no one has been more dishonest, or more dispicable, than Rep. Barney Frank.  Not only is Frank a true shameless liar, but as Chairman of the House Financial Services Committee Frank had direct supervision over the real cause of the financial meltdown.  He presided over Fannie Mae and Freddie Mac while their stock plunged 90% in value.

Frank came out with a TV ad that said:

“The right wing is losing control,” the narrator says, as footage of Frank’s recent appearance on Fox News’ The O’Reilly Factor plays. “For 12 years the Republic majority refused to regulate the financial system. Last year, Barney Frank became chairman of the House Financial Services Committee and started working on the subprime mortgage crisis, outrageous CEO compensation and other Wall Street abuses.”

“I’m Barney Frank, I approve this message and the chance to be on TV without interruption,” he says.

He is referring to his appearance on the Bill O’Reilly program.  Then, like Sunday morning on NBC’s “Meet The Press”, he’s interrupted because of his unrelenting lies:

REP. FRANK: I don’t know exactly what it is.  I will say this, there’s a real difference here–there’s a split within the Republican Party here…(unintelligible)…Representative Pence.  They believe that nothing should be done, let the market basically do–except…

SEN. ENSIGN: That’s not true.

REP. PENCE: That’s not true.

SEN. ENSIGN: That’s, that’s not true.

REP. FRANK: I–what’s the interruption?  Because as you guys say things I disagree with…

REP. PENCE: Well, when you misrepresent me, I’ll interrupt you.

Earlier in the same Meet the Press program, Frank had referred to the Republicans as embracing:

REP. FRANK: Well, there is no very good approach because, frankly, a philosophy of let the private market do whatever it wants, don’t regulate capital, keep capital–keep the, the government out of it.  Alan Greenspan acknowledged, the leader of that philosophy, it caused a lot of problems.  And we now have to try and fix them.

We live in a culture that is so completely ignorant that over 57% of Obama voters even realized that it had been Democrats – not Republicans – who were in control of Congress for the last two years.  And we live in a culture in which the media broadcasts outright lies without any attempt at correction when those lies favor Democrats.

Let’s go back and correct the record.  Let us document that Barney Frank, and his fellow Democrats, are lying demagogues who were actually responsible for the very “failure to regulate” that they deceitfully blame on Republicans.

What was the cause of our current economic meltdown?  Let’s turn to a CNN Money article:

The panel heard from former Fannie chief executives Daniel Mudd and Franklin Raines; former Freddie Mac CEOs Richard Syron and Leland Brendsel; a former Fannie Mae chief credit officer.

Fannie and Freddie, publicly traded but federally backed companies, control or guarantee about $5 trillion in mortgage loans. They purchase large amounts of home loans, bundle them together and divide them into securities that can be sold to investors.

The companies, which were taken under federal control in September, have drawn criticism for taking on too much risk, exacerbating the credit crisis when the housing market declined.

“Fannie and Freddie had a role or a primary role in this crisis,” said Rep. Darrell Issa, R-Calif. “They gave people home ownership without telling them their personal dream could become their personal nightmare.”

Lawmakers repeatedly referred to a 2005 Fannie Mae memo outlining future corporate strategy. The document acknowledged that more private investors were investing in risky loans, and it spelled out the potential consequences of taking on that risk.

“The risk in the environment has accelerated dramatically,” the document stated.

It was DEMOCRATS who failed to see the risk or take action in the developing housing finance crisis.  Just watch them doing it here.  If you do nothing else, watch this!

And you have only to do a little basic fact checking to see that the people who ran Fannie and Freddie were virtually ALL career Democrats.

And we are now on the hook for trillions of dollars in bad debt – bundled to disguise the risk – due to the catastrophic failure of these Government Sponsored Entities Fannie and Freddie.

And Barack Obama – who took more campaign contributions from Democrat-to-the-gills organizations Fannie and Freddie than anyone but fellow Democrat Chris Dodd – also had disgraced and frankly criminal Franklin Raines as an economic advisor to go with former Fannie Mae CEO Jim Johnson serving on his campaign.  In addition, Barack Obama and Chris Dodd also topped out the list of disgraced and now bankrupt Lehman Brothers.  And of course Senator Chris Dodd was taking sweetheart mortgage deals from corrupt Countrywide even as Barack Obama was taking the same sweetheart mortgage deals from corrupt Tony Rezko.  And both Democrats were engaging in these cozy relationships even as the housing industry was in the process of going to hell and killing the economy.

Now perhaps you begin to see why even former Democratic President Bill Clinton acknowledged that it was actually Democrats who bore the failure for refusing to regulate the housing financial market while he was President:

Bill Clinton on Thursday told ABC’s Chris Cuomo that Democrats for years have been “resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.”

Did Republicans fail to regulate Fannie and Freddie, whose risky and ultimately disastrous policies created the economic meltdown when they imploded?

Not according to The New York Times from September 11, 2003 – the first time President Bush tried to regulate them.  In that article, which describes Bush’s goals and the Democrats’ united opposition, Barney Frank is quoted as saying:

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Democrats managed to kill that bill.

And Barney Frank was singing the same, “Everything’s fine at Fannie and Freddie, so why fix what aint broke?” song as late as July 14, 2008 – JUST BEFORE EVERYTHING WENT TO HELL:

REP. BARNEY FRANK, D-MASS.: I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under. They’re not the best investments these days from the long-term standpoint going back. I think they are in good shape going forward.

They’re in a housing market. I do think their prospects going forward are very solid. And in fact, we’re going to do some things that are going to improve them.

What little Frank and his Democrats did was way too little and way, way, too late.

Between these two statements from Barney Frank, George Bush and Republicans tried yet again to regulate what they perceived was a growing potential crisis.  John McCain wrote the following letter urging support of the Federal Housing Enterprise Regulatory Reform Act of 2005.  I bold-faced key passages:

Sen. John McCain [R-AZ]: 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.

But Democrats ignored that message and united against that bill, too, threatening filibuster.

What happened to that bill?

On January 26, 2005, hoping for a different result in the new congress, Sununu, Hagel, and Dole re-introduced legislation (S. 190) to improve oversight of Fannie Mae and Freddie Mac. The bill incorporated many provisions of the Sununu, Hagel, Dole legislation from the prior congress. It passed out of the Committee on another party-line vote of 11 – 9 on July 28, 2005. But again, without a single Democrat vote, the bill was doomed if brought to the floor for the critical 60-vote cloture. Only 41 Democrat votes would doom it. In a growing negative atmosphere created by the left based on the war in Iraq and Afghanistan, a fight over an unreported crisis brewing in Fannie Mae and Freddie Mac was likely considered futile. Again the bill was not scheduled to go to the floor where Democrats would certainly have defeated it by voting against cloture and prevented an up or down vote.

Democrat Sen. Charles Schumer – another hypocritical lying weasel who has repeatedly blamed Republicans for failing to “regulate” – wrote an opinion piece for The Wall Street Journal in 2006 which warned about what he called “overzealous regulators” and opposed a bill in 2005 that would have transformed Freddie Mac and Fannie Mae from large investment funds into “conduits” that only bought mortgages, packaged them into securities and sold them on the market.

Sadly, Barack Hussein Obama was more effective in his lies than John McCain was with the truth.  And Barack Obama – who was the 2nd largest recipient of Fannie Mae’s using “its political power to lobby Congress,” and who had disgraced former Fannie executives on his campaign – is now the President of the United States, along with the very party that created this mess and successfully scandalized Republicans whose “mismanagement” was largely the result of failing to reign in Democrat stupidity and corruption.

The American people were lied to by a blatantly corrupt and dishonest media.  And they rewarded the very people who created our current economic disaster by giving them total power.  And as a result the American people are going to spend the next four years paying for their failure to do due diligence and find out the truth for themselves.