Financial Fiasco

Stephen Hicks has a flow chart (posted September 19) that does a nice job of showing how the current financial fiasco unfolded. Investor's Business Daily has an editorial titled, Congress Lies Low To Avoid Bailout Blame. Here are some key points from this editorial.

President Bush in 2003 tried desperately to stop Fannie Mae and Freddie Mac from metastasizing into the problem they have since become.

[Referring to Bush's actions on September 11, 2003] Bush tried to act. Who stopped him? Congress, especially Democrats with their deep financial and patronage ties to the two government-sponsored enterprises, Fannie and Freddie.

As for presidential contender John McCain, just two years after Bush's plan, McCain also called for badly needed reforms to prevent a crisis like the one we're now in.

Since 1989, Fannie and Freddie have spent an estimated $140 million on lobbying Washington. They contributed millions to politicians, mostly Democrats, including Senator Chris Dodd (No. 1 recipient) and Barack Obama (No. 3 recipient, despite only three years in office). [NOTE from me: Be sure to check the table of top recipients of campaign contributions from Fannie Mae and Freddie Mac at the end of the article.]

The Clinton White House used Fannie and Freddie as a patronage job bank. Former executives and board members read like a who's who of the Clinton-era Democratic Party, including Franklin Raines, Jamie Gorelick, Jim Johnson and current Rep. Rahm Emanuel.