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Observing my upside down America

Republicans appear to some to be reacting to Nancy Pelosi’s Vomit

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On the failure of the U.S. House of Representatives to pass 700 billion bail-out plan.

Opponents said part of the reason for the opposition from Republicans was what they termed a partisan speech by House Speaker Nancy Pelosi, said one GOP source. House Minority Whip Roy Blunt said he thinks Republicans could have provided a dozen more votes had Pelosi not given her speech.

Pelosi had said that Congress needed to pass the bill, even though it was an outgrowth of the “failed economic policies” of the last eight years.

“When was the last time someone asked you for $700 billion?” she asked. “It is a number that is staggering, but tells us only the costs of 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.”

Here are a few facts Nancy Pelosi should have studied before her ass replaced her brain.

The Bush Administration raised a red flag starting in April 2001. The administration’s 2002 budget request declares that the size of mortgage giants Fannie Mae and Freddie Mac is “a potential problem” because financial trouble in either one of them could cause “strong repercussions in financial markets.”

In 2003 the White House warning about Fannie and Freddie was upgraded to a systemic risk. that could spread beyond just the housing sector.

In the fall of 2003 the Bush Administration was pushing congress hard to create a new federal agency to regulate and supervise Fannie Mae and Freddie Mac both Government Sponsored Enterprises or GSEs. The then Treasury Secretary John W. Snow: “So we need a strong world class regulatory agency to oversee the prudential operations of the GSE’s and the safety and the soundness of their financial activities.” (Snow was nominated as Secretary of the Treasury by President George W. Bush on January 13, 2003 and unanimously confirmed by the US Senate. On May 30, 2003, it was formally announced that Snow would leave this position. On this same day, it was announced that President George W. Bush had nominated Henry Paulson, CEO of Goldman Sachs, to replace Snow. )

But Treasury Secretary John W. Snow was getting a lot of push back from then ranking member and now chairman of the house financial services committee Democratic congressman Barney Frank “Fannie Mae and Freddie Mac are not in any crisis”. In fact Frank said the federal government should be encouraging Fannie and Freddie to do more to get low income families into homes and he believed to many people had a sky is falling mentality. Frank: ” The more people in my judgment exaggerate the threat of safety and — the more people conjure — the possibility of serious financial losses to the tribute which I do not see, I think we see an entity that a fundamentally sound financially, and withstand some of the disaster scenarios and even if there were problems the federal government doesn’t bail them out, but the more protected everything there, then the less I think we see in terms of affordable housing.”

The legislation was blocked

In 2005 Fed chairman Alan Greenspan added his voice on Fannie Mae and Freddie Mac after many leaders admitted major accounting screw ups. Greenspan: “Enabling these institutions to increase in size – and they will once the crisis in their judgment passes – we are placing the total financial system of the future at a substantial risk.” Greenspan added later at another hearing on the topic: “If we failed to strengthen GSE regulation we increase the possibility of insolvency in crisis.” But the two mortgage giants had staunch defenders. Democratic senator Charles Schumer said “I think Fannie and Freddie over the years have done an incredibly good job and are an intrinsic part of making America the best housed people in the world. If you look over the last one — whatever years they’ve done very very good job.”

Senator John McCain cosponsored legislation pushing for regulation delivering a speech on the Senate floor in 2006. McCain: “For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac In the sheer magnitude of these companies in the role they play in the housing market the GSEs need to be reformed without delay.”


Written by Ben

September 29, 2008 at 8:09 pm

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