Fannie and Freddie
Last updated 10/2/2008 at Noon
In 2005, Alan Greenspan told Congress it urgently needed to act to regulate Fannie Mae and Freddie Mac. He said if they “continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road. We are placing the total financial system of the future at a substantial risk.”
Subsequently, for the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee, but the bill didn’t become law, because Democrats opposed it on a party-line vote in the committee. Republicans couldn’t even get the Senate to vote on the matter.
We now know that many of the senators who protected Fannie and Freddie have received significant financial support from them over the years.
Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.
Democrats pointing fingers between now and until November 4 don’t want you to know this, or that Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.
From a 9/22 article by Kevin Hassett at http://www.bloomberg.com.