Taxpayers On Hook To Bail Out Fannie, Freddie"
Sen. John McCain
St. Petersburg Times
July 24, 2008
Americans should be outraged at the latest sweetheart deal in Washington. Congress will put U.S. taxpayers on the hook for potentially hundreds of billions of dollars to bail out Fannie Mae and Freddie Mac. It's a tribute to what these two institutions -- which most Americans have never heard of -- have bought with more than $170-million worth of lobbyists in the past decade.
With combined obligations of roughly $5-trillion, the rapid failure of Fannie and Freddie would be a threat to mortgage markets and financial markets as a whole. Because of that threat, I support taking the unfortunate but necessary steps needed to keep the financial troubles at these two companies from further squeezing American families. But let us not forget that the threat that Fannie Mae and Freddie Mac pose to financial markets is a tribute to crony capitalism that reflects the power of the Washington establishment.......
Fannie and Freddie are the poster children for a lack of transparency and accountability. Fannie Mae employees deliberately manipulated financial reports to trigger bonuses for senior executives. Freddie Mac manipulated its earnings by $5-billion. They've misled us about their accounting, and now they are endangering financial markets. More than two years ago, I said: "If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose." Fannie and Freddie's lobbyists succeeded; Congress failed to act. They've stayed in business, grown, and profited mightily by showering money on lobbyists and favors on the Washington establishment. Now the bill has come due.
During these past two years Senator Chris Dodd has been chairman of the Senate Banking Committee and acted oblivious to the crisis at hand, choosing the all-purpose excuse of blaming the Bush Administration, and just weeks ago, insisting Fannie Mae and Freddie Mac were financially sound.
Today he succeeded in making the American taxpayer the world's foremost subprime borrower. http://online.wsj.com/article/SB121702734269186275.html?mod=opinion_main_commentaries adding even more risk to the economy as "Fannie and Freddie are being encouraged to head for the deep end of the pool even as we wring our hands about their ability to swim."
So the bailout bill finally passed this morning, and Dodd said this raid on the Treasury showed both parties " can work together to achieve a good result," http://news.yahoo.com/s/ap/20080726/ap_on_go_co/congress_housing
Let's see-----the biggest taxpayer bailout in decades is a "good result"? What, pray tell, would be a bad result?
If Chris Dodd stays on as Chairman of the Banking Committee, such pictures will not be ancient history. And if Barack Obama, the former "community organizer" is President, we will quickly see the taxpayers used as the sap as crony capitalists make common cause with radical activists to use the financial system to bankroll their pipe dreams.