The Mess We’re In

by Jonah

White House releases list of times it warned Congress to regulate Fanny and Freddy since 2001, including seven times this year alone.

Barney Frank, the US Representative in charge of writing the bailout package along with his counterpart in the Senate Chris Dodd, has had a rather cozy relationship with Fanny and Freddy . . . and by cozy I mean an executive of Fanny Mae was his lover (and he received $40,100 in campaign contributions from them). In 2003, thrilled that they had started buying sub-prime loans, Frank said, “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.”

Speaking of Chris Dodd, he received more campaign contributions from Fanny and Freddie than any other politician: $133,900. He also received $21,000 from Countrywide, not to mention his below-market mortgages on a couple houses, and $70,000 from Bank of America, which bought the failed mortgage giant. Only Barack Obama and Hillary Clinton have received more money from Bank of America than Dodd with John McCain slightly trailing him at $64,000. Obama is the top recipient of contributions from employees at Bank of America: $263,500 in donations. McCain is at $177,500, making him the fourth-largest recipient.

Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, which McCain endorsed in a speech on the Senate floor, would have been our best hope to avoid the mess we’re in now. But Chris Dodd blocked it from ever leaving committee. So much for deregulation.

Marketplace had a great piece about the value of $700 billion dollars. It’s enough for a laptop for every child . . . in the world.

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