Bernanke: Blame China, Not Greenspan

The GSEs caused this almost depresson=“April 6, 2005 Greenspan further stated at a Senate Banking Committee hearing: “If we fail to institute GSE regulations we increase the possibility of insolvency and crisis.”

In 1992 the Clinton administration revised congress’ banks, called the Government Sponsored Enterprises. They were to sponsor ever increasing percentage of loans to the “poor.” Congress and their allies in HUD set that percentage at 52% loans to the poor in 2008 when they went bankrupt. The loans that they gave out became a pork barrel for the local politicians. They appointed liberal politicos to lead Fannie and Freddie, and spent $200 Million on lobbyists in 10 years to keep congress from regulating this monstrosity. If the corporate officers at Fannie and Freddie didn’t give that percent of loans to the “poor” then the house subcommittee on would call them on the carpet. The leadership of Fannie Mae and Freddie Mac, with the help of Mass. Rep. Barney Frank, developed loan packages that were guaranteed to cause default. During the 2003 hearings on corruption and accounting manipulation in Fannie Mae, Fannie’s CEO Franklin Raines was commended by Maxine Waters for producing the “no interest loan” in consultation with the Representatives Housing Subcommittee.

In August 2008, Barney Frank asked “why didn’t the Republicans stop this if it’s real. They were in charge.” The answer is simple: Conneticut Senator Chris Dodd threatened a filibuster to prevent anyone from adequately regulating the GSEs. Most of the sixteen Republican senators who called for regulation of the GSE’s in 2006 were targeted by the Democrats and defeated. Before 2006 Republicans in congress couldn’t do anything about this because so many congressmen had been corrupted.

To get an eyeful of the GSEs Tammany Hall activities, such as paying lobbyists to intimidate congressional oversight as they did in Chris Shays case, or hiring family members to get representatives or senators to sabotage efforts to regulate Fannie and Freddie as they did in the case of Utah Repuclican Senator Robbins. For more specifics, see Beverly McLean's article online on Fortune/CNN on 25 January 2005 [http://money.cnn.com/magazines/fortune/fortune_archive/2005/01/24/8234040/index.htm]. The August 2002 Washingtonian also detailed the Government Sponsored Enterprises's corruption [http://www.washingtonian.com/articles/people/8593.html] as did the Wall Street Journal for the past eight years.)

Warnings by the responsible financial leaders were ignored and the whistleblowers were castigated in the press. Chairman Greenspan solemnly warned the Senate Banking Committee on: “April 6, 2005 Greenspan further stated at a Senate Banking Committee hearing: “If we fail to institute GSE regulations we increase the possibility of insolvency and crisis.” Greenspan was dismayed that 23% of all home mortgages were guaranteed by the GSEs. http://www.federalreserve.gov/boarddocs/testimony/2005/20050406/default.htm

William Poole President of the St. Louis Federal reserve reported that as of October 2006, The 14 GSE’s were bankrupt in 2006, but no-one could get them regulated b

Doug Miles of AL @ May 13, 2009 16:23:14 PM