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Hand it to Ron Paul, The Senate voted 96 to 0
Tuesday to open the secretive Federal Reserve Board's emergency lending
practices to a congressional audit, as well as require a detailed
disclosure of who's getting the funds. This is like when
your girlfriend unwraps the bandages after rhinoplasty. You hope
for the best, but ... you know. I can't help but think that
Bernie Sanders ("The average American is beginning to wonder what goes on behind closed doors with the Fed") is hoping for the worst though. While they're at it, how about addressing this?
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In bed with Fannie and Freddie
America's greatest economic liability is also the greatest political
liability for the Democratic congressional leadership. Fannie Mae and
Freddie Mac have exposed taxpayers to $5.4 trillion in risk from loan
guarantees, with taxpayers already having covered $126 billion in
losses. So far, Democrats have been reluctant to include tough reforms
on the profligate government-sponsored enterprises in the financial
regulation package currently making its way through the legislative
process.
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Of course they're not anxious.
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Renewed scrutiny of the two institutions would remind the public that
senior Democrats were in bed, sometimes literally, with Fannie and
Freddie. House Financial Services Chairman Barney Frank of Massachusetts
spent a number of years blocking various attempts to regulate
government-sponsored enterprises, famously saying that that he did not
see any "safety and soundness" problems worthy of note. There was good
reason for Mr. Frank to look the other way, given his history of close
association with Herb Moses, Fannie's assistant director for product
initiatives from 1991 to 1998.
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Democrats were friends with financial benefits from
Fannie and Freddie. Franklin Raines, a former Carter- and
Clinton-administration official, pocketed $90 million as Fannie Mae's
CEO - a figure bolstered by the agency's overstated earnings.
- Former
Clinton appointee Jamie Gorelick was paid $26 million as Fannie's vice
chairman
- Democratic honcho Jim Johnson, who led Sen. John
Kerry's vice presidential search committee and temporarily led Mr.
Obama's veep search, enjoyed $21 million.
- Kent Conrad of North Dakota and
Senate Banking Chairman Christopher Dodd of Connecticut. Fannie Mae was
the biggest buyer of the outrageously risky mortgages that proved to be
Countrywide's undoing.
- Barack Obama was the second-largest recipient of contributions
from Fannie and Freddie sources during his brief Senate tenure.
- Given below-market loans directly by Countrywide
Financial CEO Angelo Mozilo were Mr.
Raines, Senate Budget Committee Chairman Kent Conrad of North Dakota and
Senate Banking Chairman Christopher Dodd of Connecticut.
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Former
( and famously self-serving) president Bill Clinton (speaking out of both sides of his mouth) said it best in 2008.
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"I think the responsibility
the Democrats have may rest more in resisting any efforts by
Republicans in the Congress or by me when I was president to put some
standards and tighten up a little on Fannie Mae and Freddie Mac."
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