Mel Watt faces tough confirmation & mixed reviews
U.S. President Barack Obama names U.S. Representative Mel
Watt as his choice for director of the Federal Housing Finance Agency.
Please note – at the 3:00 to 4:05 portion of this video,
President Obama mentions that Mel Watt has spent 20 years in the Congress and that
during EVERY ONE of them he was on the federal committee that oversees housing
policy. (The second half of the video is about the nomination of Tom Wheeler to
head up the FCC, and not relevant to this post).
Congressman Mel Watt
I have spent considerable time in the last five years studying
the history and outcomes of the finance committees that were headed up by Barney
Frank and Chris Dodd. What I have uncovered to date is absolutely irrefutable
proof that the policies that came out of these committees lead to the reckless
lending the created the housing bubble and subsequent economic collapse. In
particular it goes back to the Community Reinvestment Act, which went through a series of Legislative Changes particularly those which were promoted and signed into law by President
Bill Clinton in the 1990’s.
The meltdown was the consequence of a combination of the
easy money and low interest rates engineered by the Federal Reserve and the
easy housing engineered by a variety of government agencies and policies. Those
agencies include the Department of Housing and Urban Development (HUD) and two
nominally private “government-sponsored enterprises” (GSEs), Fannie Mae and
Freddie Mac. The agencies — along with laws such as the Community Reinvestment Act , eventually leading to a requirement that banks make
loans to people with poor and nonexistent credit histories — made widespread
homeownership a national goal. This all led to a home-buying frenzy and an
explosion of subprime and other non-prime mortgages, which banks and the GSEs
bundled into dubious securities and peddled to investors worldwide (investment
vehicles called ‘Credit Default Swaps’). Hovering in the background was the
knowledge that the federal government would bail out troubled “too-big-to-fail”
financial corporations, including Fannie and Freddie.
(For proof of this accepted knowledge, please see Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System--and Themselves’ – by Andrew Ross Sorkin).
More history and
irony – it was Senators Dodd and Frank who were at the head of the spear
in the years just before the collapse – steering the Senate Finance committee
and pushing banks to make these loans. Barnie Frank is even on the record of
calling bankers, fiscal conservatives and republicans “the killers of the
American Dream” – by denying access to mortgage loans for lower income
citizens. They encouraged and manipulated many of the banks to make these loans
via Fannie & Freddie. The banks
knowing these loans were more risky; and fearing holding on to the risk within
their portfolios; got creative and developed a new investment vehicle called
“Credit Default Swaps”. These were essentially portfolios made up of a mix of
good loans packaged with the more risky loans and then sold off over and over
again to pools of investors worldwide. The theory was simply this – As bankers
we must play by the government’s rules; right… (Fannie – Freddie – senate
finance; regulatory, etc.); so if there is too much risk – we will repackage
the risky loans, sell them and then spread the risk across the financial
investment community – in order to dilute or mitigate our individual risk.
This makes sense – except there were so many of these bad loans across the system
that it collapsed the entire economy. The irony is – that Dodd & Frank;
their political colleagues and corporate cronies - together created the policies that
led to the collapse – and today, they are taking the lead role in the Dodd-Frank new
regulations to fix the problem. (Simply crazy; I know they can’t be possible be
qualified, right)?
So... I give you this context in order to broach the
following questions?
Who of you out there on Blogosphere can help me source more background information on Mel Watt and his involvement on these committees? Is it too much for me to have some skepticism about Mel Watt being appointed to the Federal Housing Finance Agency by President Obama, if he for twenty years he sat on the very same committees who's policies ushered in the economic collapse in the first place?
Who of you out there on Blogosphere can help me source more background information on Mel Watt and his involvement on these committees? Is it too much for me to have some skepticism about Mel Watt being appointed to the Federal Housing Finance Agency by President Obama, if he for twenty years he sat on the very same committees who's policies ushered in the economic collapse in the first place?
Resources & Links
Democrats in their
own words covering up Fannie Mae, Freddie Mac scandal (2004)
Democrats were WARNED
of Financial crisis and did NOTHING
Nancy Pelosi and
Barney Frank, Complicit in Financial Crisis (Republicans DID ask for more
Regulatory Oversight for Fannie, Freddie & the Banks – but Pelosi, Reid,
Dodd & Frank would not allow it).
Tim Geithner to Paul
Ryan: "We don't have a definitive solution... We just don't like
yours"
Barney Frank in 2005:
What Housing Bubble?
For a full history of
the aforementioned belief that the Government would in fact bailout huge
investment corporations; please see the detailed book titled ‘Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System--and Themselves’ – by Andrew Ross Sorkin. I read
this book in its entirety. I heavily recommend every American citizen read this
book!
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