Democrats Resisted Freddie Mac and Fannie Mae Reforms - In 2003

I am not a partisan person.  That said, I am surprised this 2003 (yes, 2003!) article from the New York Times is not getting more attention:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

Who opposed these reforms?  Democrats:

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

''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.''

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

Oh, there was a shell game going on.  It wasn't, however, the kind that Rep. Watts claimed.

People are saying that the "free market" caused the problems we are facing today.  They want the heads of the CEOs who are responsible.  Where are those same people calling for the heads of Barney Frank?

I'm not partisan, because partisanship, like fear, is the mind killer.  That said: It's now as clear as freshly-washed windows that the Democrats are the ones most responsible for this mess.  Let them suffer the consequences.

UPDATE: Thanks to slominshield for this video.  It's a bit too partisan for my tastes, the original footage is must-see:

After watching that video and reading the 2003 article, I can now say that I am no longer an undecided voter.  McCain is a war monger.  He does not support gay marriage.  Yet did the War in Iraq cause nearly the chaos that Barack Obama's Fannie-Freddie policies are causing?  As between a country that has gay marriage, or a country that is going through a Great Depression; I'll choose the latter. 

There is no way that I can, in good conscience, vote for Obama.  He and his party have done enough damage to this country.  Obama will no doubt destroy this country's economy.

Comments

[Aaron]

Okay... I didn't look past whitehouse.gov, but I couldn't find anything there. What was the proposal, what was its purpose, and why didn't Congress act on it? Is there any reason to believe it would have prevented the problems Fannie Mae and Freddie Mac have had as a result of the housing bubble?

[slominshield]

I'm non-partisan also. Have a look at THIS CLIP on youtube.

Or copy and paste: http://www.youtube.com/watch?v=usvG-s_Ssb0

[Aaron]

You're that easily swayed by a partisan YouTube clip that engages in pretty overt race-baiting? Really?

[Mike]

That New York Times article was partisan? How? That video contained original footage. Was that footage faked or rigged? Is it not a fact that Barack Obama got huge campaign contributions from Fannie and Freddie?

I really don't understand your broader point. I shouldn't be persuaded by original source materials? I should ignore a speech by Fannie's CEO? I should ignore an article showing that leading Democrats circled the wagon around Fannie and Freddie? Why?

On a meta-level, I am reminded why I don't often discuss politics. You are a brilliant guy. I could talk legal issues that require deep analysis with you all day. Yet you ignore evidence that goes against your political views.

I really don't understand this. It's because I'm not a partisan person or a "team player," I guess.

I am perfectly capable of saying, "I would still vote for Barack Obama, even in light of this evidence, because he stands for other things I believe in." I don't even have a problem when people say that.

But to ignore the evidence all together? To pretend like that 2003 article is fiction? To pretend that Obama didn't get tons of cash from Fannie and Freddie? To pretend that Obama and the Democrats did not offer Fannie and Freddie incredible protection?

[Aaron]

You described the YouTube video as partisan. I didn't realize it would be controvercial to agree with you.

You are surprised that major organizations that employ lobbyists contribute to the campaigns of presidential candidates? I know I'm shocked.

I'm not the one ignoring evidence here. Sorry.

[The Crusader]

The reason it would have prevented the subprime crisis you morons (financially speaking of course) is that what Democrats defeated soundly in 2003 and 2005 was strict regulation on the % of subprime loans in it's portfolio-Mae and Mac already could have 1 % more than banks because it was a GSE-Democrats defeated reducing that in 2002. It was between 2005-2007 that ALL this toxic debt was created and Mae and Mac IS responsible, 100% for it. Once the government let them do it, it HAD to let other mortgage companies do it (raise % of subprimes) or it was an unfair advantage to the market-Then the market went whacko. So, Mae Mac SET the market, using their Democratic agents to protect them- Finally, IF the 2005 legislation was passed NONE of this would ever have happened-Democrats? 100% Opposed-Republicans? 100% for- I imagine most of America would like to know these facts, but the MSM has a blackout on any of these FACTS, but the last two or three days Several big city minor papers have began to publish it. The hypocrisy of Dodd and Frank is monumental-They came out recently screaming we need MORE REGULATION, yes they defeated that regulation in 2002, 2003 and 2005- Now that the Bailout is blocked, I think these facts will emerge though. Previous, I believed the news blackout would hold, like it has on Jeremiah Rezco Ayers, but the American People smell a rat-they need to be told that the self righteous Democrats defeated any chance we had of preventing this.

[The Crusader]

The reason it would have prevented the subprime crisis you morons (financially speaking of course) is that what Democrats defeated soundly in 2003 and 2005 was strict regulation on the % of subprime loans in it's portfolio-Mae and Mac already could have 1 % more than banks because it was a GSE-Democrats defeated reducing that in 2002. It was between 2005-2007 that ALL this toxic debt was created and Mae and Mac IS responsible, 100% for it. Once the government let them do it, it HAD to let other mortgage companies do it (raise % of subprimes) or it was an unfair advantage to the market-Then the market went whacko. So, Mae Mac SET the market, using their Democratic agents to protect them- Finally, IF the 2005 legislation was passed NONE of this would ever have happened-Democrats? 100% Opposed-Republicans? 100% for- I imagine most of America would like to know these facts, but the MSM has a blackout on any of these FACTS, but the last two or three days Several big city minor papers have began to publish it. The hypocrisy of Dodd and Frank is monumental-They came out recently screaming we need MORE REGULATION, yes they defeated that regulation in 2002, 2003 and 2005- Now that the Bailout is blocked, I think these facts will emerge though. Previous, I believed the news blackout would hold, like it has on Jeremiah Rezco Ayers, but the American People smell a rat-they need to be told that the self righteous Democrats defeated any chance we had of preventing this.

[Aaron Larson]

(Nice try. You can acknowledge the Fannie Mae/Freddie Mac role without resorting to fiction.)

[Andrew]

Wait a minute--several Democrats may have spoken against the 2005 legislation, but as a group the Dems never even got the chance to vote on it. Although the bill made it out of committee, it never came up for a vote. The Republicans were in the majority at the time and had control of the Senate agenda, so I think there is enough blaim for BOTH parties on that point.
And let's not forget that McCain has had, both on his Senate staff and still on campaign staff, lobbyists who worked for FM.
Again, singling out Obama and Democrats is telling only half the story. If you want a blaimless candidate, you'll have to go third party.