Speaker Nancy Pelosi held a news conference last week and told reporters this:

During her weekly press conference on April 15, a reporter asked Pelosi a seemingly innocuous question about taxes. Pelosi prefaced her response with a fairly standard litany: explaining the dire state of the U.S. economy inherited by President Obama and setting the blame at the foot of the Bush administration. But she also added this: “When [then-Senator Obama] accepted the nomination in Colorado, the [Bush] Administration had kept from the public the idea that, in a matter of weeks, the financial community would be in crisis, and we would need to pass the TARP legislation.”

The state-run media is trying to make something of this latest Pelosi fabrication today.

But, what Speaker Pelosi failed to mention was that President Bush warned the Democratic Congress 17 times in 2008 alone about the systemic consequences of financial turmoil at Fannie Mae and Freddie Mac and also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties.

Unfortunately, these warnings went unheeded, as the President’s repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.

The White House released this list of attempts by President Bush to reform Freddie Mae and Freddie Mac since he took office in 2001.
Unfortunately, Congress did not act on the president’s warnings:

** 2001

April: The Administration’s FY02 budget declares that the size of Fannie Mae and Freddie Mac is “a potential problem,” because “financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity.”

** 2002

May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

** 2003

January: Freddie Mac announces it has to restate financial results for the previous three years.

February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that “although investors perceive an implicit Federal guarantee of [GSE] obligations,” “the government has provided no explicit legal backing for them.” As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. (“Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO,” OFHEO Report, 2/4/03)

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO’s review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact “legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises” and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any “legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk.” To reduce the potential for systemic instability, the regulator would have “broad authority to set both risk-based and minimum capital standards” and “receivership powers necessary to wind down the affairs of a troubled GSE.” (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

** 2004

February: The President’s FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: “The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator.” (2005 Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to “not take [the financial market's] strength for granted.” Again, the call from the Administration was to reduce this risk by “ensuring that the housing GSEs are overseen by an effective regulator.” (N. Gregory Mankiw, Op-Ed, “Keeping Fannie And Freddie’s House In Order,” Financial Times, 2/24/04)

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying “We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System.” (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

** 2005

April: Treasury Secretary John Snow repeats his call for GSE reform, saying “Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system.” (Secretary John W. Snow, “Testimony Before The U.S. House Financial Services Committee,” 4/13/05)

** 2007

July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying “first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options.” (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying “These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I’ve called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon.” (President George W. Bush, Discusses Housing, The White House, 12/6/07)

** 2008

January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms, says “A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully.” (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase.

March: President Bush calls on Congress to take action and “move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages.” (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation
and “modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes.” (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

“Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans.” (President George W. Bush, Radio Address, 5/3/08)

“[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator.” (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)

“Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans.” (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying “we need to pass legislation to reform Fannie Mae and Freddie Mac.” (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President’s call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.

In 2005– Senator John McCain partnered with three other Senate Republicans to reform the government’s involvement in lending.
Democrats blocked this reform, too.

More… Not only did democrats not act on these warnings but Barack Obama put one of the major Sub-Prime Slime players on his campaign as finance chairperson.

 

 

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  1. Don’t forget too that before he was a State Senator, Obama was named as one of the lawyers helping unqualified borrowers sue a Chicago-based bank into issuing them risky loans.

  2. You lose all credibilty by aping Limbaugh with all this “State run media,” business.

    Typical dittohead, are you going to denounce “feminazis” and “environmentalist whackos” too?”

  3. @Frank Sinclair

    Liberal tactic #3 when confronted by the facts: misdirect.

    (You sure you don’t want to play the race card with that? …)

  4. @3 This guy Hoft is trying to be a Limbaugh clone. There is no reason to respond to what he says because I can do the same thing by responding to Limbaugh.

    I’m waiting for him to advance Limbaugh’s conspiracy theory about European environmentalists blowing up the drilling rig in the Gulf of Mexico.

  5. The dumb (rhymes with punt), forgot to rewrite the history before she spewed. oops!

  6. ++

    Pelosi lie??

    why.. have you no class sir??

    MZ PILLOUSY may be a prevaricating
    prevaricator, but she is no liar sir!! :D

    [she also has to wait to hear what she says so
    she'll know what she said, a botox side affect]

    ==

  7. ++

    Frank Sinclair @ 2:21 pm #5

    why wait mr. switch & bait..

    go open your own blog.. duh!!

    ==

  8. They just say anything that pops into their heads. Twenty years ago you could get away with it as it was really difficult to get the facts out to the public if you weren’t part of the LSM.

    What Nancy and company forget is that as soon as they spew this crap someone posts it on the web and shortly thereafter the facts follow on. Duh!

  9. everyone knows that the 18th time would have been the charm.

  10. ++

    Bruce @ 2:17 pm #4

    thanks..

    Billion-Dollar Scandal Not Ready for Prime Time

    [Connections to the halls of power can make any story front-page news. Fannie Mae and Enron had no shortage of those. They employed two of the most generous campaign contributors in the nation. The media tried to link the leadership at Enron to the Bush administration and to several key figures in Congress. On the other hand, the broadcast media had nothing to say about the unambiguous connections between Fannie Mae board members and the Clinton administration.

    [..]

    In contrast, neither NBC nor any other broadcast outlet would have needed to search hard for political ties in the Fannie Mae debacle. Former Chief Executive Officer Franklin Raines and former Vice Chairman Jamie Gorelick were both instrumental figures in the Clinton administration. The print media were candid about Fannie’s political connections. In a Dec. 23, 2004, article, Albert Crenshaw of The Washington Post revealed that Franklin Raines “was a director of the Office of Management and Budget in the Clinton administration, and his name was mentioned as a possible Treasury Secretary had Sen. John F. Kerry (D-Mass.) been elected president.”

    Jamie Gorelick was Deputy Attorney General under Clinton. Fannie Mae board member Jack Quinn was the attorney for pardoned tax evader Marc Rich. Fannie also has one of the largest lobbying budgets in Washington. A Feb. 24, 2005, article in The Washington Post reported that Fannie “paid its lobbying corps about $5 million in the first six months of last year.”

    According to Jeff Bliss of Bloomberg.com, Fannie Mae spent almost $8.7 million on lobbyists in 2003. In May of 2004, Citizens Against Government Waste criticized Fannie for “heavy handed meddling in the legislative process to protect the company’s congressional protected status and its lavish corporate welfare program.”

    The connections were there, but broadcast news was uninterested.

    [..]

    Gasparino agreed: “Right. It’s not related to George Bush. Franklin Raines, I believe, is a Democrat. So there is a degree here – because I’ve heard journalists talk about this – that hey, this is – there’s politics on the part of the Republicans. That’s why they’re beating up on Fannie Mae, which may be true. But, at the same time, this is a huge story, and it’s going overlooked.”

    Sadly, this perception of political correctness is out of touch with reality. According to a September 2003 report by a GSE watchdog group, Fannie Mae Policy Focus, Fannie lags far behind the market in facilitating housing for minority and first-time buyers. As a matter of fact, the GSEs buy less than 10 percent of private sector loans to first-time African-American and Hispanic purchasers. Moreover, Fannie and Freddie acquired “more loans made to absentee landlords, vacation homes, and second mortgages than first-time homebuyer loans,” according to the report.

    It appears that very little of the implicit taxpayer subsidy to the GSEs is fulfilling that politically correct dream. This failure, compounded by an accounting scandal, should be red meat for story-driven TV journalists.
    As the analysis proves, that hasn’t been the case.]

    may bet is more folks like Rezko & Auchi or
    Dodd & Rangel got those sweetheart loans..

    that’s why this story will never make history as being
    the main factor behind America’s financial collapse..

    ==

  11. I’m still waiting for Frank Sinclair to address the actual meat of this article: Pelosi LIED about Bush not warning Congress about the looming financial crisis. Follow along, shall we?

    1) Bush tried MANY times to warn Congress.
    2) Pelosi states the Bush Admin. kept the crisis hidden.
    3) Proof is found in multiple instances where Bush did, in fact, try to warn Congress.
    4) PELOSI LIED ABOUT THIS.
    5) Frank Sinclair addresses this by bringing up Rush Limbaugh, versus talking about the actual gist of the topic.
    6) Frank Sinclair = Epic Fail

  12. See you in November you _________________________ (Fill in with your favorite descriptive term)!

  13. And Professor Obama sued Citi Bank as an Ill Senator forcing them to give bad sub prime loans!!! Hello !!!!!!!

  14. Great post and examples from President43.Moreover, the Fannie Mae and Freddie Mac hearings on you tube were Maxine Waters and company imputed the character of the Commisssion Director investigating the problems of Freddie and Fannie rather than look at his data to the problems these loans could cause to the Nations economy is shocking.

    Mr. Sinclair do you have evidence that Fannie Mac and Freddie Mae were not responsible directly and/ or indirectly for the Financial collapse and subsequent Tarp funds to alleviate this problem?Moreover,do you agree with Mrs.Pelosi claims that Bush 43 did nothing?

  15. Shorter Frank Sinclair: “I… ahem… um… oh, hey! That cloud looks just like a bunny!”

  16. Frank Sinclair
    May 3rd, 2010 | 2:13 pm | #2
    You lose all credibilty by aping Limbaugh with all this “State run media,” business.

    Typical dittohead, are you going to denounce “feminazis” and “environmentalist whackos” too?”

    Funny how you don’t comment on the facts, but rather stick to insults. Typical for the left. When are you going to start firebombing someone, like your leftist friends in Greece have done so with Greek cops on the weekend?

    As for the “feminazis”, have you loon ever seen how German “feminists” treat women who CHOSE to have family and children? Your name-calling, that you constantly show, pales in comparison. The same “feminists” who demand women quotas in university teaching staff (they want 50% female teachers and I’m still waiting for those idiots to tell me how they’re going to achieve that at our TU, which is the technical/engineering university) are 100% silent when yet another little girl is married off to an old geezer and then raped to death in some mohammedan country.

    “environmentalist whackos” Show me an environmentalist who’s not a totaly nutjob. Show me one. Most of those whackos are city people who know animals from the internet, tv and the zoo and the only plants they’ve ever dealt with are the trees in a random park or the flower in the pot in their office. Anyone who says “CO2 is a climate killer” is a whacko. Physics are clear. CO2 has never been a climate killer and it’s none right now. The vast majority of the “environmentalists” don’t even know basic physics or biology. Same applies for their leaders, or do you think that Al Gore understands or even knows Newton’s law of cooling?

    As for the meat in this one.

    Pelosi lied? That’s like a bag of rice falling over in China.

    Meaning: it happens all the time, so what else is new?

  17. BG #11 and Floradora #12 – you both suffer the same delusion that I used to suffer.

    You think that liberal-lefties care about facts. The fact is – they do not.

    Liberalism is a mental disorder.



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