Saturday, September 20, 2008

McCain or Obama -- who bears responsibility for the crisis?

John McCain on the Senate floor, May 25, 2006:
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.
Until recently, Raines was an Obama adviser -- although Obama now pretends otherwise. Back to McCain:
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.
Barack Obama voted against the legislation. Barack Obama -- in the Senate for mere months -- quickly became the number 2 recipient of contributions from Fannie Mae.

10 comments:

Perry Logan said...

Obama's big-money connections fit well with my pet theory that Obama is a neocon.

They also seem to confute the notion, often heard amongst right-wing PUMAs, that Obama is a far-left Marxist bent on creating a socialist America.

Joseph Cannon said...

Man, I hear you, Perry. You've put your finger on one reasons why I am NOT always comfortable around the PUMAs.

But, what the hell -- politics makes for strange bedfellows.

Anonymous said...

"who bears responsibility for the crisis?"
huh... the Bush Republican junta ?

"They also seem to confute the notion, often heard amongst right-wing PUMAs, that Obama is a far-left Marxist bent on creating a socialist America."

It only proves one thing: most people discussing politic are incapable of rational thinking. They prefer emotional thinking with the simple good & evil dichotomy as a reference. In that simple mindset, evil is never "us", it's always "them". For you, neocon = evil, then Obama must be a neocon. For them Marxist = evil, then Obama must be a Marxist. Exactly the same problem with Hillary haters, the ones from the right will say she's a Marxist while the "prog" will say she's a neocon.

It's the reverse of the scientific process: you start with the conclusion, you ignore all the facts that don't support your conclusion and overemphasize any tiny potential link that support your thesis even if it's fallacious (I read this every month to remind myself: http://www.nizkor.org/features/fallacies/ ). That's why 2 groups with diametrically opposed thesis can develop from the same set of facts. And their common hate will make sure they can co exist without attacking each other (the ennemy of my ennemy is my friend). The allegory of the 8 blind men describing an elephant fits well here since hate can really blind you. And sadly, most people are more interested in being right than finding the complex truth, the whole picture with all its shade of grey. Their simple caricature is much easier to deal with. The Obot, the Prog, the 911 truther, the 911 debunker, the Kosack, the freepers, the PUMAs are all guilty of this while they all accuse each other of doing it.

"Man, I hear you, Perry. You've put your finger on one reasons why I am NOT always comfortable around the PUMAs."

I'm curious: when are you comfortable with the PUMA's ? Is it when they talk about the whitey tape ? when they say he might be a secret muslim just after they talked about his racist pastor ? or is it when they speculate about the COLB ? or his school registration form in Indonesia ? Basically, what smear of the PUMA are you comfortable with ?

Anonymous said...

What the heck is a right-wing PUMA? PUMAs are lifelong Democrats currently pissed off at the Democratic party. Most PUMAs I know (and I know many) do not believe Obama is a real Democrat.

Edgeoforever said...

Also, I remember Obama as recent as the debates, opposing caps on mortgage interests that Hillary proposed.
Who will he pick now? The taxpayers or the Obama payers?

RockSpot said...

Fair's fair. If you're going to site lobbyists in one camp ... site the lobbyists in the opposing camp!

Charlie Black, one of McCain's top aides made at least $820,000 lobbying for Freddie Mac between 1999 and 2004. [MJ] It's harder still to take McCain Campaign assertions of “neutrality” seriously when the McCain Campaign manager, Rick Davis served as president of an advocacy group led by Fannie Mae and Freddie Mac that defended the two companies against increased regulation. “At least 20 McCain fundraisers have lobbied on behalf of Fannie Mae and Freddie Mac, netting at least $12.3 million in fees over the past nine years.” [Politico].

I'm sick of both of them ... so sick that I'm voting for neither of them. This year, I'll be voting Libertarian. If you want change ... then change WHO you're sending to Washington. Stop sending members of the same parties who got us in this mess in the first place. Join me ... vote Libertarian this year and help us elect Bob Barr as President!

Unknown said...

Cannon says: “Barack Obama voted against the legislation. Barack Obama — in the Senate for mere months — quickly became the number 2 recipient of contributions from Fannie Mae.”

I can’t stand B.O. but I trusted this, posted it elsewhere and got my ass handed to me because it is a lie. Nobody voted on it. It never made it out of a GOP controlled banking committee.

I hate it when I get propaganda from my favorite sites. The truth is bad enough.

Anonymous said...

Perry, that's not fair. Sure, there are right wing PUMAs, as both Clinton and Obama's supporters have this weird breakdown of leftish and rightish people, but how "often" do you hear that? I don't know what sites you're visiting, but from what I've seen liberal PUMAs outnumber right-wing PUMAs by a long way. I'm not saying I've never heard that, but not "often." (OTOH, a few of my academic Obot friends also say things like that--and good luck with the wishful thinking. :))

Joseph Cannon said...

Brook, I am indeed sorry. I got it from a post by MYIQ2X or whatever the name is on the Confluence, and I should have double-checked, but info from that writer has always turned out to be okay before. I tend to be respectful of people whose IQ is twice mine...

At any rate, MYIQ has apologized for that part. I apologize for not double-checking.

Let me note that I've written nearly 4000 posts, and I've had to backtrack on only a few.

Unknown said...

Joseph, thank you for apologizing but are you going to remove the misinformation from your original post?

MYIQ2X may have apologized to you, but someone at the Confluence removed the misinformation from the original post and then deleted my post in which I informed them it was misinformation.

And you should know that myiq2xu attributed the misinformation to you over at the Confluence. So someone is not being honest here. And that is upsetting as I've generally trusted both blogs. A mistake is a mistake and we all make them. But as was said about Tricky Dick, "it's not the crime, it's the cover-up."