Since the ball of financial yarn began unraveling, Republicans have been spinning and spinning and spinning away, that the woof and warp of the issue inhered in the Democratic Party fabric. They gained the majority of both houses in 2007, and immediately began pushing FNMA (Fannie Mae) and FHLMC (Freddie Mac) to make all those sub-prime mortgages, of buy them, to poor folks who were never, ever able to afford them, and thus were and are responsible for the mess.
Or so Republicans and their shock-talk Rightie radio jocks now want everyone to believe.
Today, Democratic Representative from Massachusetts Barney Frank and Chair of the House Financial Services Committee held a hearing: "Financial Markets Regulation and Oversight." The marquee witness was Nobel winning economist and professor of economics at Columbia University Joseph Stiglitz. The entire 3-hour and 55-minute hearing can be viewed below.
[[stiglitz]]
Certain facts came out at the hearing that give proof to the lies the GOP has been spreading like sun-block, to cover their tails over this crisis that threatens to burn America to a crisp. Harkening back for just a moment, Republican Representative Scott Garrett of New Jersey, in the opening comments section of the hearing, once again tried to lay the blame for the meltdown fiasco on the Democrat's doorstep. He claimed everything that has gone awry is due entirely to Democratic refusal to pass legislation that would have averted the currently enlarging miasmatic morass.
Not that any element of the mainstream media will check, let alone report, what is the truth, the problem with all such efforts is of course, they're just not true.
Just to set the scene. Republican Senator Bill Frist was Senate Majority Leader until 2007. Republican Congressman Dennis Hastert was Speak of the House from 1999 to 2007. Prior to Congressman Hastert, Republican Congressman Newt Gingrich was Speaker from 1995 to 1997. Tom "the Hammer" Delay was elected House Majority Whip in 1995 and served there until 2003 when he was appointed House Majority Leader, a powerful post he used like a hammer, from whence he earned the nickname, until 2005. In the 1990s, Delay conceived the K-Street Project, to coerce all lobbying firms of any moment to hire only Republicans to their top positions.
POINT: With every respect possible paid to the definition of "control," for 12 years, until January of 2007, the Republican Party controlled the House of Representatives. Nothing moved in Washington that did not have as an appendage the GOP's imprimatur.
During those 12 years the GOP did nothing whatsoever to rein in the financial industry's profligate ways.
The way things work, a bill can be introduced either in committee, subject to the requirement that its substance pertain to a mater the committee has jurisdiction over. It can also be introduced on the floor. If in committee, it will be by committee vote (or the chairman's whim) that decides whether the bill will make it to the floor for an open vote of the full House. If on the floor, the bill must first be sent to the committee with appropriate jurisdiction. However bills were constructed by various Democrats that did seek to address the Fannie Mae and Freddie Mac developing sub-prime tsunami, not a one survived the Republican hold on power.
In 2004, one bill in particular, S-190) was endorsed by now Treasury Secretary Paulson as a "good bill," one that in 2005 actually passed the House under the then Committee Chair Republican Mike Oxley. But the Republican Bill Frist senate prevented proposed legislation from reaching the floor. Furthermore, according to today's testimony, and despite Secretary Paulson's initial endorsement, what killed the bill was a "one finger salute" from President Bush.
What Republicans did manage during their 12 years in power was to impeach President Clinton, interfere in the Terri Schiavo family affair, pass irresponsible tax cuts, and a Patriot Act that ran rough shod over the United States Constitution's civil liberties protections.
One of presidential aspirant Republican Senator John McCain's top economic advisors is a fellow by the name of Mark Zandy. On October 15, Mr. Zandy spoke with Knowledge@Wharton (University of Pennsylvania's extraordinarily prestigious business school) The video of the interview can be viewed here.
But what is more interesting, at least insofar as all the spinning the Right has been doing, trying to put the blame on the Democrats, can be found on page 151 of his book, Financial Shock. There, Zanday writes, "President Bush readily took the home ownership baton at the start of his administration. To reinforce this effort, the Bush administration put substantial pressure on Fannie Mae and Freddie Mac to increase their funding of mortgage loans to lower income groups. They [FNMA & FHLMC] had been shown to have problems during the corporate accounting scandals, and were willing to go along with any request from the administration. The Bush administration set aggressive goals for the two giant institutions, which they met by purchasing sub-prime mortgage securities. By the time of the sub-prime mortgage financial shock, both had become sizeable buyers."
Later in the same book, Zandy goes on to say, "
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