Wednesday, May 12, 2010

Money Laundering

Checking the Laundry

Boned Jello

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?

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.

Of course they're not anxious.

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.
  •   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.

Former ( and famously self-serving) president Bill Clinton (speaking out of both sides of his mouth) said it best in 2008.

"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."

1 comment:

Anonymous said...

I'm thinking the final body count will be around 15, with half being apparent suicides and none being any more important than a paper shuffler.

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