Monday, April 27, 2009

WHAT IS SO HARD TO UNDERSTAND?

House Financial Services Committee hearing, Sept. 10, 2003:

Rep. Barney Frank (D., Mass.): I worry, frankly, that there's a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . . .



Rep. Maxine Waters (D., Calif.),
speaking to Housing and Urban Development Secretary Mel Martinez:

Secretary Martinez, if it ain't broke, why do you want to fix it? Have the GSEs [government-sponsored enterprises] ever missed their housing goals?




House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Frank:
I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .


House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Gregory Meeks, (D., N.Y.):
. . . I am just pissed off at Ofheo [Office of Federal Housing Enterprise Oversight] because if it wasn't for you I don't think that we would be here in the first place.

And Freddie Mac, who on its own, you know, came out front and indicated it is wrong, and now the problem that we have and that we are faced with is maybe some individuals who wanted to do away with GSEs in the first place, you have given them an excuse to try to have this forum so that we can talk about it and maybe change the direction and the mission of what the GSEs had, which they have done a tremendous job. . .


Office of Federal Housing Enterprise Oversight Director Armando Falcon Jr.: Congressman, Ofheo did not improperly apply accounting rules; Freddie Mac did. Ofheo did not try to manage earnings improperly; Freddie Mac did. So this isn't about the agency's engagement in improper conduct, it is about Freddie Mac. Let me just correct the record on that. . . . I have been asking for these additional authorities for four years now. I have been asking for additional resources, the independent appropriations assessment powers.

This is not a matter of the agency engaging in any misconduct. . . .


Rep. Waters: However, I have sat through nearly a dozen hearings where, frankly, we were trying to fix something that wasn't broke. Housing is the economic engine of our economy, and in no community does this engine need to work more than in mine. With last week's hurricane and the drain on the economy from the war in Iraq, we should do no harm to these GSEs. We should be enhancing regulation, not making fundamental change.

Mr. Chairman, we do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines. Everything in the 1992 act has worked just fine. In fact, the GSEs have exceeded their housing goals. . . .


Rep. Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated?
Mr. Raines?

Mr. Raines: No, sir.

Mr. Frank: Mr. Gould?

Mr. Gould: No, sir. . . .

Mr. Frank: OK. Then I am not entirely sure why we are here. . . .

Rep. Frank: I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists.


Senate Banking Committee, Oct. 16, 2003:

Sen. Charles Schumer (D., N.Y.):
And my worry is that we're using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie's mission. And I don't think there is any doubt that there are some in the administration who don't believe in Fannie and Freddie altogether, say let the private sector do it. That would be sort of an ideological position.
Mr. Raines: But more importantly, banks are in a far more risky business than we are.




Senate Banking Committee, Feb. 24-25, 2004:

Sen. Thomas Carper (D., Del.):
What is the wrong that we're trying to right here? What is the potential harm that we're trying to avert?

Federal Reserve Chairman Alan Greenspan: Well, I think that that is a very good question, senator.

What we're trying to avert is we have in our financial system right now two very large and growing financial institutions which are very effective and are essentially capable of gaining market shares in a very major market to a large extent as a consequence of what is perceived to be a subsidy that prevents the markets from adjusting appropriately, prevents competition and the normal adjustment processes that we see on a day-by-day basis from functioning in a way that creates stability. . . . And so what we have is a structure here in which a very rapidly growing organization, holding assets and financing them by subsidized debt, is growing in a manner which really does not in and of itself contribute to either home ownership or necessarily liquidity or other aspects of the financial markets. . . .


Sen. Richard Shelby (R., Ala.): [T]he federal government has [an] ambiguous relationship with the GSEs. And how do we actually get rid of that ambiguity is a complicated, tricky thing. I don't know how we do it.

I mean, you've alluded to it a little bit, but how do we define the relationship? It's important, is it not?

Mr. Greenspan: Yes. Of all the issues that have been discussed today, I think that is the most difficult one. Because you cannot have, in a rational government or a rational society, two fundamentally different views as to what will happen under a certain event. Because it invites crisis, and it invites instability. . .


Sen. Christopher Dodd (D., Conn.): I, just briefly will say, Mr. Chairman, obviously, like most of us here, this is one of the great success stories of all time. And we don't want to lose sight of that and [what] has been pointed out by all of our witnesses here, obviously, the 70% of Americans who own their own homes today, in no small measure, due because of the work that's been done here. And that shouldn't be lost in this debate and discussion. . . .


Senate Banking Committee, April 6, 2005:

Sen. Schumer: I'll lay my marker down right now, Mr. Chairman. I think Fannie and Freddie need some changes, but I don't think they need dramatic restructuring in terms of their mission, in terms of their role in the secondary mortgage market, et cetera. Change some of the accounting and regulatory issues, yes, but don't undo Fannie and Freddie.


Senate Banking Committee, June 15, 2006:

Sen. Robert Bennett (R., Utah):
I think we do need a strong regulator. I think we do need a piece of legislation. But I think we do need also to be careful that we don't overreact.

I know the press, particularly, keeps saying this is another Enron, which it clearly is not. Fannie Mae has taken its lumps. Fannie Mae is paying a very large fine. Fannie Mae is under a very, very strong microscope, which it needs to be. . . . So let's not do nothing, and at the same time, let's not overreact. . .




Sen. Jack Reed (D., R.I.): I think a lot of people are being opportunistic, . . . throwing out the baby with the bathwater, saying, "Let's dramatically restructure Fannie and Freddie," when that is not what's called for as a result of what's happened here. . . .






Sen. Chuck Hagel (R., Neb.): Mr. Chairman, what we're dealing with is an astounding failure of management and board responsibility, driven clearly by self interest and greed. And when we reference this issue in the context of -- the best we can say is, "It's no Enron." Now, that's a hell of a high standard.



Are liberals really unable to see what was going on here and how it led to the crash of the housing "bubble?"

Was this about corporate greed or Congressional (Republican and Democrat) malfeasance?

Is it really a good thing that these people are still in charge?

Really?

19 comments:

TAO said...

Are these people really in charge? Or do they do the bidding of the corporate CEO's?

How many CEO's have lost THEIR jobs?

Joe said...

TAO: Why they wouldn't even THINK of doing the bidding of the corporate CEOs. They are there to represent you and me. And don't they do it well? (Read that question with exceeding sarcasm in your voice)

TAO said...

Ah, but we keep re electing them, so by default, we support them as they support the CEO's and corporate welfare.

Joe said...

TAO: Hey! Don't lay that one at MY feet. I didn't vote for 'em.

I'm even going to vote against Connie Mack, who is SUPPOSED to be one of the "good guys."

He's not loud enough and doesn't use the same tactics the DEMS used when THEY were in the minority.

The time for "Mr. Nice Guys" has done come and gone.

Mark said...

"Are liberals really unable to see what was going on here and how it led to the crash of the housing "bubble?""

Depends on whether you believe them or not. Or if they believe themselves or not. But I would say, no.

"Is it really a good thing that these people are still in charge?"

No.

Mark said...

Joe, What really amazes me is how Liberals can look us straight in the eye, with their bare face hanging out, after seeing these testimonies, and say this is not the Democrats fault.

TAO said...

Why should one expect anymore from Liberals/Democrats than one expects from Conservatives/Republicans?

That is what always fascinates me is that the folks in power always look stupid to those who are no longer in power and with the fact that we have a two party system and the parties shift control between themselves on a regular basis that basically means that overall all they all look stupid half the time to a majority of Americans...

Joe said...

"...they all look stupid half the time to a majority of Americans."

Only half the time?

Mustang said...

Let me help you with this, Joe. Whatever a politician says only counts for five minutes. After that, whatever was said expires and can no longer be attributed to said politician unless said on tape. In such cases, it could be that the politician simply misspoke, or what was said was taken out of context.

I'm glad to lend you a helping hand, my friend.

Joe said...

Mustang: I am so relieved. Thanks for the explanation.

shoprat said...

A good argument for term limits.

Joe said...

Shoprat: You got dat right.

TAO said...

Term Limits? Why not just let us vote direct via the internet and call it a day....

House Members are nothing but a mob anyway, and Senators no longer serve the function that they once did as prescribed by our Constitution...

So, fire them and do it oursleves!

Joe said...

TAO: I actually LIKE that idea, and suggested it to my boss six years ago...to which he said, "Too undependable." Maybe it could be made dependable today.

Joe said...

Anonymous: You wrote: "The vast majority of website operators don't have the guts to allow this post."

I can't speak for website operators. I'm just a little old blogger.

I can tell you this, though. You would have a much better chance of being heard if you would organize your thoughts in such a way as to move logically from one point to another.

As written, your paragraphs are much too long for normal people to want to read and your thought are incoherent.

You bounce back and forth between name calling and false statistics.

You premise is wrong and your presentation is both tedious and boorish.

You have no "right to remain anonymous...protected by a federal law," or any other law in civilized society.

You write like one affected by schizophrenia, and should go back on your meds.

Your long, discombobulated discourse is not welcome here, thus your comment has been deleted.

snaggletoothie said...

Joe
A great collection of quotes. I've copied and pasted them and put them aside for use in future discussions. Would you give your source in case I ever need it?
Thanks

Joe said...

snagletoothie: Actually, my sources were various, articles I pulled together from various Internet sites and from the Congressional Record, with which I verified ALL of the quotes...a tedious process at best.

snaggletoothie said...

Thanks for doing that work, Joe. Now we just need to find out why big timers like Jake Tapper and Katie Couric can't do what a citizen soldier for truth does.

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