"Frankly, I'm disappointed and disgusted... as I watch them attempt to strong-arm a bailout of some of America's biggest corporations by asking the taxpayers to suck up the staggering results of the hubris, greed, and arrogance of those who sought to make a quick buck by throwing the dice."
-Former Arkansas Governor Mike Huckabee
Let's get one thing straight. We can assign a lot of blame for this crisis... there is certainly a lot to go around. Hubris and greed on Wall Street played a significant part...
But let's not get so distracted that we forget the real irony here... namely that those who are now pretending to come to the rescue with solutions like knights on white horses -- I'm talking about the men and women we elect to Congress -- bear a large share of the blame!
Huckabee also said; "They all lived off big campaign contributions and the swill of the lobbyists who strong armed them into permission to steal."
Or to put it the words of Chuck Colson; "the people who are going to steer this plan through Congress are the very characters who brought us this crisis. And they are already looking for political and financial goodies they can hang on to the plan."
And, who is one of the main culprits?
None other than "the savior" B. Hussein Obama!
Colson also had this to say in his recent Breakpoint commentary:
"But there is another cause of this crisis that we cannot ignore: the near-incestuous relationship between politicians and big-time government-supported financial institutions."
"... Fannie and Freddie spent more than $200 million lobbying Congress over the past decade. Among politicians, Barack Obama ranked number three in terms of campaign contributions received from the two agencies-more than $100,000. His chief advisor in the vice-presidential vetting process is a former CEO of Fannie Mae." [Emphasis Mine]
As our political leaders wrangle and haggle and jockey to score political points, let's send them our own message. Let them know that we are not fooled... that the American people are fully aware of the roll they played in this mess.
This crisis never needed to happen. A number of conservatives in Congress sounded the alarm several years ago. And what happened?
Charles W. Calomiris and Peter J Wallison, in The Wall Street Journal called this sudden incredulous show of innocence by politicians a "canard" and wrote: "The same politicians who today decry the lack of intervention to stop excess risk taking in 2005-2006 were the ones who blocked the only legislative effort that could have stopped it."
Colson names names: "The Main Stream Media (MSM) worshipped at the altar of the Jack Abramoff scandal during the 2006 cycle; of which, Republicans lost control of the House and the Senate...well, do you think the MSM will unleash the dogs on Fannie CEOs Jim Johnson & Franklin Raines (Clinton's director of OMB)...Jim Johnson (Mondale's campaign manager) became CEO of Fannie Mae and took $10's of millions for himself ...Franklin Raines (Clinton's Budget Director) took over $100 million for himself ...Janet Reno and her sidekick Jamie Gorelick (who denied the FBI access to CIA files on the 9/11 bombers that would have stopped them before they acted) have taken over $75 million for themselves from Fannie?"
To answer Colson's question... Don't bet on it! Colson again:
"So what did Fannie and Freddie get for their lobbying efforts? Political cover and huge compensation packages for their executives, like Franklin Raines, who received $91 million over a seven-year period. And they were pushed by House Financial Services Chairman Barney Frank to dive into the incredibly risky sub-prime mortgage business."
"Why would Frank and other politicians encourage that? Well, according to a recent Wall Street Journal article, Congressman Frank 'pushed through" an 'affordable housing' trust fund in the Congress, a fund that 'siphons off . . . as much as $500 million a year each' from Fannie and Freddie profits to another 'fund that politicians can then disburse to their favorite special interests.'"
In plain English, the Journal is claiming that Frank legislatively "pushed" Fannie Mae and Freddie Mac to make questionable loans and Congress used the proceeds from these loans to fund Congressional pork and pet programs!
Calomiris and Wallison basically say the same thing: "The poor choices of these two government-sponsored enterprises (GSEs) [Fannie Mae and Freddie Mac] -- and their sponsors in Washington -- are largely to blame for our current mess."
"The strategy of presenting themselves to Congress as the champions of affordable housing appears to have worked. Fannie and Freddie retained the support of many in Congress, particularly Democrats, and they were allowed to continue unrestrained. Rep. Barney Frank (D., Mass), for example, now the chair of the House Financial Services Committee, openly described the "arrangement" with the GSEs at a committee hearing on GSE reform in 2003: "Fannie Mae and Freddie Mac have played a very useful role in helping to make housing more affordable . . . a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing." The hint to Fannie and Freddie was obvious: Concentrate on affordable housing and, despite your problems, your congressional support is secure."
So much for our saviors in Congress! Any solutions? Mike Pence and the Republican Study Committee outlined the following four point plan:
"Two-Year Suspension of the Capital Gains: Immediately suspend the capital gains rate of 15% for individuals and 35% for corporations. By encouraging corporations to sell unwanted assets, this provision would unleash funds and materials with which to create jobs and grow the economy. After the two-year suspension, capital gains rates would return to present levels but assets would be indexed permanently for any inflationary gains."
"Schedule the GSEs for Privatization: Transform Fannie and Freddie over a reasonable time period to being truly private companies without special government privileges and open them up to real market competition. This reform would 1) establish commonsense limits for their capital requirements and portfolio holdings relative their size, 2) focus their mission on affordable housing only, not profit making, 3) require them to pay an appropriate risk-based amount for the government guarantee they enjoy, 4) subject them to state and local taxes and accurate SEC filings like every other private for-profit corporation, and 5) ultimately provide for the phase out their GSE charters once their conservatorship has ended. In a matter of mere weeks, Fannie and Freddie have gone from too big to fail to too dangerous to repeat. This hybrid illusion must not be allowed to continue."
"Stabilize the Dollar: Repeal the Humphrey-Hawkins Full Employment Act which diverts the Federal Reserve's attention from long-term price stability to short-term economic growth. In an effort to fuel the economy, this additional mandate has encouraged the Fed to keep rates artificially low, fueling economic boom and busts, and now a strong up-tick in inflation and the decline of the dollar (as investors free dollars for hard assets). This reform would require the Fed to establish a numerical definition for price stability and maintain a policy that promotes it over the long-term."
"Suspend 'Mark to Market' Accounting: Suspend the mark-to-market regulatory rules for long-term assets. These rules require financial firms to mark assets at current market levels, even where the no market exists and any immediate transactions would result in fire-sale prices. Instead of allowing firms to mark these assets to their true economic value, these rules contribute to a downward spiral as firms have to evaluate their assets not on the basis of their long-term investment but rather on a short-term mania."
Makes sense... But don't expect liberals in Congress like B. Hussein Obama and Barney Frank to go that route. Not when a crisis can be used as a pretext to intrude further upon business and erode our freedoms.