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View Full Version : Elections Change You Can Believe In: Guess Who Got More Money From Freddie/Fannie


RINGLEADER
09-15-2008, 09:55 AM
Fannie Mae and Freddie Mac survived scrutiny by manipulating, cajoling, and lobbying politicians and hiring board members who were politicos (e.g. Jamie Gorelick) rather than mortgage gurus. They hired lobbyists, gave massive donations, obtained nice tax breaks, and sailed below the regulatory radar screen.

Of the 354 lawmakers who received money from Freddie and Fannie between 1989 and 2008, Sen. Chris Dodd received the most. But next was . . . drumroll . . . Barack Obama. Yup. And he was only there for three years. Not too much went to John McCain, about a sixth of what Obama received (h/t Glenn Reynolds.)

But, you say, maybe all the Fannie and Freddie employees who gave money just “liked” Obama. That might make sense with ordinary institutions. But these two had a game plan to influence and sway lawmakers for the purpose of keeping them on the government gravy train and out of the regulatory line of fire. It’s no coincidence that they “liked” Senate Banking Chairman Chris Dodd best of all.

So it would appear that this is precisely what Obama has been railing against: Washington insiders lining the pockets of other Washington insiders while the taxpayers ultimately have to foot the bill. The Agent of Change, it seems, didn’t exactly walk the walk on this one.

mlyonsd
09-15-2008, 10:41 AM
New campaign slogan......

Change....hope.....bailout

Stinger
09-15-2008, 10:52 AM
New campaign slogan......

Change....hope.....bailout

I thing you may have that backwards.

Bailout .... hope .... Spare Change

bkkcoh
09-15-2008, 10:54 AM
I didn't think that Obama did that kind of thing!

RINGLEADER
09-15-2008, 11:20 AM
Guess who received the most money of any member of congress (except Hillary) from Lehman Bros.?

http://www.politico.com/blogs/bensmith/0908/Friends_of_Lehman.html?showall

tiptap
09-15-2008, 11:30 AM
Did President Obama bail out the Mortgage twins. No, I think that came on Bush's watch. And what administration failed in oversight to guard against excesses when funneling the economy through the mortgage ride. Uhh, I believe that was the Republicans. I haven't seen the pay off from either Dodd or Obama. Dodd was surprised that there was talks about bailing out Lehman a few weeks ago and that didn't even come to fruition.

RINGLEADER
09-15-2008, 11:39 AM
Did President Obama bail out the Mortgage twins. No, I think that came on Bush's watch. And what administration failed in oversight to guard against excesses when funneling the economy through the mortgage ride. Uhh, I believe that was the Republicans. I haven't seen the pay off from either Dodd or Obama. Dodd was surprised that there was talks about bailing out Lehman a few weeks ago and that didn't even come to fruition.

I don't disagree with you that both parties totally screwed the pooch on lender regulations and find the idea of the government running mortgage lenders to be a very, very bad idea. But I would point out that the Dems did very little during their time as the minority party or during their limited control of Congress to bring attention or fix the problems associated with this issue. Everyone was fat and happy -- why rock the boat?

As far as Obama taking money is concerned it's nothing but a great television ad in the making. Politically, it would be a good move.

tiptap
09-15-2008, 12:08 PM
I don't disagree with you that both parties totally screwed the pooch on lender regulations and find the idea of the government running mortgage lenders to be a very, very bad idea. But I would point out that the Dems did very little during their time as the minority party or during their limited control of Congress to bring attention or fix the problems associated with this issue. Everyone was fat and happy -- why rock the boat?

As far as Obama taking money is concerned it's nothing but a great television ad in the making. Politically, it would be a good move.

President Bush put his personal seal of approval on securing home ownership for everyone. It was his notion of getting everyone on the ownership boat only he didn't connect the dots about financing it while drawing debt in competition to finance a dead end war. He is as stubborn about his view about this as the war. He was uncompromising on this and let the Congress know it. The idea that the Congress could act before they have secured their majority, against a sitting President with veto power. You must think I was born during the Reagan years and just sop up this bullshit.

BucEyedPea
09-15-2008, 12:15 PM
Oh there's lots more on this topic:

In 1999 a bill was passed by a Republican Congress and signed by Democratic President Bill Clinton that rescinded the Depression era's divorce of commercial banking activities from investment banking, called the Glass-Stegall Act of 1933. That opened a floodgate of "creative" financial instruments backed by notes and other commercial paper.

Much of the banking regulation of the Roosevelt administration — including abandonment of the gold standard — made absolutely no sense, but markets can fail with dire short-run consequences under a fiat monetary system. With Glass-Stegall, Congress put its finger on and mitigated the tendency and temptations of banks to create massive costly externalities to society, in this case, by holding bundled mortgage-backed securities which were deemed safe by rating agencies but which ultimately failed the market test.

Link (http://mises.org/story/3098)

Blame the govt for this mess, not the market!

BucEyedPea
09-15-2008, 12:16 PM
Fannie Mae and Freddie Mac survived scrutiny by manipulating, cajoling, and lobbying politicians and hiring board members who were politicos (e.g. Jamie Gorelick) rather than mortgage gurus. They hired lobbyists, gave massive donations, obtained nice tax breaks, and sailed below the regulatory radar screen.

Of the 354 lawmakers who received money from Freddie and Fannie between 1989 and 2008, Sen. Chris Dodd received the most. But next was . . . drumroll . . . Barack Obama. Yup. And he was only there for three years. Not too much went to John McCain, about a sixth of what Obama received (h/t Glenn Reynolds.)

But, you say, maybe all the Fannie and Freddie employees who gave money just “liked” Obama. That might make sense with ordinary institutions. But these two had a game plan to influence and sway lawmakers for the purpose of keeping them on the government gravy train and out of the regulatory line of fire. It’s no coincidence that they “liked” Senate Banking Chairman Chris Dodd best of all.

So it would appear that this is precisely what Obama has been railing against: Washington insiders lining the pockets of other Washington insiders while the taxpayers ultimately have to foot the bill. The Agent of Change, it seems, didn’t exactly walk the walk on this one.

I don't disbelieve this but I'd like to have the source via a link. So I can save or use it.

tiptap
09-15-2008, 12:28 PM
http://amygdalagf.blogspot.com/2008/09/obama-should-refuse-contributions-from.html

This is where RL gets the quote. It is second hand from Center for Responsive Politics. Still Digging

tiptap
09-15-2008, 12:33 PM
NYT says Obama got around 220,000 dollars from employee connected donations. That both candidates got similar funds. And that is the only tie to Obama as compared to lobbyists ties to McCain.
http://www.nytimes.com/2008/09/10/us/politics/10fannie.html?ref=us&pagewanted=all

Cut and paste carefully to get the impression you want and avoid original sources.

underEJ
09-15-2008, 02:19 PM
Unless there is proof that employees were influenced into their donations, there's nothing wrong with it. If you donate more than one or two hundred (I can't remember which one is the trigger) the campaign is legally required to ask who is your employer. I guess not every one answers so the tally is not precise first of all, and second, my donation does not in any way connect my employer to a candidate.

Seems pretty typical of any large company, or are you theorizing employees were influenced to contribute?

orange
09-15-2008, 03:55 PM
Oh there's lots more on this topic:



Link (http://mises.org/story/3098)

Blame the govt for this mess, not the market!

Excuse me, but you seem to have MISREAD your own source. It wasn't the Govt. at fault - it was DEREGULATION and THE UNREGULATED MARKET to blame.

With Glass-Stegall, Congress put its finger on and mitigated the tendency and temptations of banks to create massive costly externalities to society, in this case, by holding bundled mortgage-backed securities which were deemed safe by rating agencies but which ultimately failed the market test.

WITH Glass-Stegall - massive costly externalities were mitigated

WITHOUT Glass-Stegall - banks held bundled mortgage-backed securities which were deemed safe by rating agencies but which ultimately failed the market test.

memyselfI
09-15-2008, 04:12 PM
Repost. This wee little detail was posted last week.

http://www.chiefsplanet.com/BB/showthread.php?p=5000094#post5000094

SBK
09-15-2008, 04:28 PM
Repost. This wee little detail was posted last week.

http://www.chiefsplanet.com/BB/showthread.php?p=5000094#post5000094

That was a good thread, thanks for sharing. ROFL

BucEyedPea
09-15-2008, 04:42 PM
Excuse me, but you seem to have MISREAD your own source. It wasn't the Govt. at fault - it was DEREGULATION and THE UNREGULATED MARKET to blame.
No I didn't. You're not reading it correctly.

WITH Glass-Stegall - massive costly externalities were mitigated

WITHOUT Glass-Stegall - banks held bundled mortgage-backed securities which were deemed safe by rating agencies but which ultimately failed the market test.
Maybe you should read within the context of the blurb or if need be more of the data in the link.

Such as:

Much of the banking regulation of the Roosevelt administration — including abandonment of the gold standard — made absolutely no sense, but markets can fail with dire short-run consequences under a fiat monetary system.

Who gave us a fiat monetary system? Who took us off gold, which would regulate things anyway.

Once on a fiat system who allowed uniting commercial and investment banks? The congress and president Clinton. The govt created the problem due to this policy within an already faulty system.

Link also mentions "an insidious form of 'market-based policy' is also a real culprit in the current mess." That's not a true laissez-faire market. It's a corporate welfare market as noted further in the next passage:

The Financial Services Modernization Act of 1999 would make perfect sense in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance; [all Govt] but in the world as it is, this "deregulation" amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly. Such government privileges are nothing new to Republicans — consider the effective subsidies to the pharmaceutical, sugar, and steel industries — but this particular gift to financial institutions is what allowed the credit bubble to expand to such absurd proportions, because it allowed banks of all types to engage in increasingly risky transactions and to greatly expand the leverage of their balance sheets.

orange
09-15-2008, 04:51 PM
Sorry, but no reading of that changes my understanding that the author acknowledges that Glass-Stegall was an important safe-guard. Now if you're saying "blame the Govt. for not regulating the financial industry properly," I'll agree - but that seems a bit contrary to your normal Libertarian posts. Perhaps I reached the wrong conclusion.

As for this, "Who gave us a fiat monetary system? Who took us off gold, which would regulate things anyway." - under Monetary Policy for $1000, who was "Richard Nixon?"

Calcountry
09-15-2008, 05:05 PM
2 years ago, I reccomended gold for any portfolio. Hurry, it might not be too late.

BucEyedPea
09-15-2008, 05:18 PM
Sorry, but no reading of that changes my understanding that the author acknowledges that Glass-Stegall was an important safe-guard. Now if you're saying "blame the Govt. for not regulating the financial industry properly," I'll agree - but that seems a bit contrary to your normal Libertarian posts. Perhaps I reached the wrong conclusion.

As for this, "Who gave us a fiat monetary system? Who took us off gold, which would regulate things anyway." - under Monetary Policy for $1000, who was "Richard Nixon?"
It's only an important safeguard in a system that has certain flaws which include too much govt backing or guarantees for failure.

Overall it's still too much govt involved because F/F are govt backed which leads to moral hazard. They should be on their own as should the banks as they wouldn't be inclined to take such risks without that govt backing because they'd go out of business. They were never wholly private and they were put in place by FDR.

It was FDR who took us off of gold and Nixon took us off of the modified gold standard. FDR confiscated the gold of all the Federal Reserve Banks with the Gold Reserve Act of 1934 substituting them with only "gold certificates." FDR knew a gold standard would get in his way because his plans required an inflationary policy to build socialism in America. Everyone must own a home hence FF.

My economics is not just libertarian, it's also small govt conservatism which overlaps with libertarianism mostly but not totally.

BucEyedPea
09-15-2008, 05:19 PM
2 years ago, I reccomended gold for any portfolio. Hurry, it might not be too late.

I did too.

patteeu
09-15-2008, 06:57 PM
Fannie Mae and Freddie Mac survived scrutiny by manipulating, cajoling, and lobbying politicians and hiring board members who were politicos (e.g. Jamie Gorelick) rather than mortgage gurus. They hired lobbyists, gave massive donations, obtained nice tax breaks, and sailed below the regulatory radar screen.

Of the 354 lawmakers who received money from Freddie and Fannie between 1989 and 2008, Sen. Chris Dodd received the most. But next was . . . drumroll . . . Barack Obama. Yup. And he was only there for three years. Not too much went to John McCain, about a sixth of what Obama received (h/t Glenn Reynolds.)

But, you say, maybe all the Fannie and Freddie employees who gave money just “liked” Obama. That might make sense with ordinary institutions. But these two had a game plan to influence and sway lawmakers for the purpose of keeping them on the government gravy train and out of the regulatory line of fire. It’s no coincidence that they “liked” Senate Banking Chairman Chris Dodd best of all.

So it would appear that this is precisely what Obama has been railing against: Washington insiders lining the pockets of other Washington insiders while the taxpayers ultimately have to foot the bill. The Agent of Change, it seems, didn’t exactly walk the walk on this one.

I wonder who Lehman Bros. favorite presidential candidate is?

patteeu
09-15-2008, 06:58 PM
Guess who received the most money of any member of congress (except Hillary) from Lehman Bros.?

http://www.politico.com/blogs/bensmith/0908/Friends_of_Lehman.html?showall

Asked and answered!