Oh, the handwringing we have seen over the horrific oil spill in the Gulf of Mexico. And rightfully so. It appears that BP made some clear mistakes in glossing over warning signs on the well whose breakdown cost the lives of 11 workers and caused environmental challenges that will take years to overcome. Washington has criticized the company and demanded that they be held accountable because they were not effectively overseeing the operation. They claim BP should be held financially responsible for even more than is actually allowed by law.
How interesting it is that when it comes to mismanagement of the people’s money, the people responsible in Washington are unwilling to admit their own mismanagement of the situation or their own accountability and accept the full penalties due.
Consider the following; when Jimmy Carter began the Community Reinvestment Program in the 1970’s to provide housing for low income individuals, he began the wave that would eventually crash into Wall Street in 2008. Bill Clinton ramped up the program during the 1990’s, blackmailing lending institutions who balked at lending money to people with no visible ability to pay it back. The Attorney General threatened investigations unless they loaned money to those who were poor credit risks.
These institutions offloaded these loans to federally-backed Fannie Mae and Freddie Mac in order to get them off their books. As these loans did not perform, the taxpayers were forced to pony up billions to “bail” them out. But that’s not all. During the Bush administration, regulators regularly went to the congressional committees to warn them of the impending implosion of both entities. Five separate times, the Bush administration specifically asked for reviews, but were turned away by Democrat lawmakers. And now, in the midst of massive demagoguery by the President, the Democrat-controlled Senate has voted to keep Fannie Mae and Freddie Mac outside the regulatory control of new regulatory reform on a party line vote. See the following links here and here.
Actions like these are what make the American people distrust Washington. And so they should. The Chairman of the Senate Banking Committee, Chris Dodd, who was accountable for what these institutions were doing, led the way for the Democrats sticking their heads in the sand while the institutions crumbled. Having realized that his voters have had enough of his self-serving duplicity (he received favorable loan treatment from Countrywide as a “Friend of Angelo”), he sacked his bats months ago and will not stand for re-election. Is there not someone in Massachusetts to challenge his U.S. House counterpart, Barney Frank? Frank chastised a Regulator during a committee hearing who came to warn the Congressmen of an impending collapse, accusing him of being the problem while the Democrat members of the House Banking Committee pontificated about the soundness of the lending institutions.
To add insult to injury, both of these institutions have now returned to the “money-well” to ask for billions more to shore up their leaking cash. Fannie Mae and Freddie Mac may seem too big to fail, but I assure you the men and women who looked the other way while this well gushed taxpayer money are not. Just ask Bob Bennett and Alan Mollohan, two long-term incumbents whom their voters sent packing this week. Keep your eye on Pennsylvania to see if Arlen “Lifer” Specter survives his Primary on Tuesday. Stay tuned!
P.S. Where was Congressman Cooper fiddling while Fannie Mae and Freddie Mac?