How "Fanniegate" could be a Game Changer

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    Jun 09, 2011 2:28 PM GMT
    http://blogs.the-american-interest.com/wrm/2011/06/07/fanniegate-gamechanger-for-the-gop/

    Fanniegate: Gamechanger For The GOP?

    Democrats, watch out.

    The Republican Party and especially its Tea Party wing have just acquired a new weapon of mass destruction — and it has nothing to do with any of Congressman Wiener’s rogue body parts. If they deploy this weapon effectively in the next election cycle — a big if — then they have the biggest opportunity to move the country rightward since Ronald Reagan took the oath of office back in 1981.

    The Tea Party WMD stockpile is currently stored in book form: Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon. By Gretchen Morgenson, one of America’s best business journalists who is currently at The New York Times, and noted financial analyst Joshua Rosner, Reckless Endangerment gives the best available account of how the growing chaos in the mortgage and personal finance markets and the rampant bundling of dubious loans into exotically toxic securities plunged the world, and millions of American families, into the gravest financial crisis since World War Two. It is gripping reading as well, and its explanations are clear enough that readers without any background in finance will have no trouble following the plot. The villains? An unholy alliance between Wall Street, the Democratic establishment, community organizing groups like ACORN and La Raza, and politicians like Barney Frank, Nancy Pelosi and Henry Cisneros. (Frank got a cushy job for a lover, Pelosi got a job and layoff protection for a son, Cisneros apparently got a license to mint money bilking Mexican-Americans of their life savings in cheesy housing developments.)

    If the GOP can make this narrative mainstream, and put this picture into the heads of voters nationwide, the Democrats are toast. The party will have to reinvent itself (or as often happens in American politics, be rescued by equally stupid Republican missteps) before it can flourish.

    If Morgenstern and Rosner are to be believed, the American dream didn’t die of old age; it was murdered and most of the fingerprints on the corpse come from Democratic insiders. Democratic power brokers stoked the housing bubble and turned a blind eye to the increasingly rampant corruption and incompetence at Fannie Mae and the associated predatory lenders who sheltered under its umbrella; core Democratic ideas may well be at fault.
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    Jun 09, 2011 3:15 PM GMT
    That's a radical interpretation of Morgenson's argument, which - in and of itself - is a very elitist view of the causes of the crisis. She's the A.B. Stoddard of the NY Times, e.g. the girl that got into the best sorority and sees the world through that lens.
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    Jun 09, 2011 4:00 PM GMT
    Very accurate summary. Also relevant is the role of Franklin Raines and the significant lobbying and the contributions to several Democrats.
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    Jun 09, 2011 4:16 PM GMT
    And in spite of an attempt to reign in Raines by the Bush Administration circa Sept 11, 2003

    http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html

    the left fought back with their typical charges of racism.

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    Jun 09, 2011 4:27 PM GMT
    Raines was doing what many other financial executives were doing, which doesn't make it right, but as a public company he was under the same pressure as others to "invent" profits.

    For those who want to blame the Dems, my question is why didn't the Republicans do something when they controlled Congress and the Presidency (2003-2006)?
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    Jun 09, 2011 4:44 PM GMT
    For good reads on the role of Republicans versus Democrats, google: McCain Fannie Freddie. Specifically, hotair.com and politifact.com. There are also some liberal links with their own interpretation, but look at McCain's actual speech on the Senate floor. Hard to spin that.
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    Jun 09, 2011 4:53 PM GMT
    Christian73 saidRaines was doing what many other financial executives were doing, which doesn't make it right, but as a public company he was under the same pressure as others to "invent" profits.

    For those who want to blame the Dems, my question is why didn't the Republicans do something when they controlled Congress and the Presidency (2003-2006)?


    See the above
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    Jun 09, 2011 6:04 PM GMT
    Christian73 saidRaines was doing what many other financial executives were doing, which doesn't make it right, but as a public company he was under the same pressure as others to "invent" profits.

    For those who want to blame the Dems, my question is why didn't the Republicans do something when they controlled Congress and the Presidency (2003-2006)?

    Evidence he was cooking the books to increase his bonuses. Instead of being an advisor to Obama (VP selection committee), he really belonged in jail. Maybe he used some of the $90+M he pocketed to influence friends. Corruption through and through.
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    Jun 09, 2011 9:45 PM GMT
    If our housing crisis had not happened you would have christian and jprichva talking about how there needs to be more equality in home ownership standards and how we need programs to help get people in homes. What ensued was exactly what liberals wanted, then we had the housing crisis. Now, post crisis we can just blame the "rich" people for purposely "disenfranchising" everyone.