Financial Reform: A Power Grab, yes, a Fix – no way!
Lee’s Summit, June 30, 2010 – I’ve been reading everything I can get my hands on, on the content of the Financial Reform act that just passed the test vote today. I spent my time looking for what regulations and changes were going to be made to Fannie Mae and Freddie Mac. In short, I found none. I’m not surprised. Washington never points fingers at itself, only at others.
It is easy to place the blame on Wall Street, like it is to place the blame on a Maintenance man for being near a broken machine. The logic there is, Maintenance is always around when a machine is broken, so it must be their fault: Wrong!
In 2008 and 2009 I studied the events that lead to the collapse and two institutions stood out as the main and unpunished culprits: Fannie Mae and Freddie Mac. Each had their own role to play in this debacle.
You have to think back to the period between 2006 and the end of 2008. It all started long before that, but these are critical years. Those two and a half years were the peak of the lending insanity that lead to the failure of major lending institutions.
Fannie Mae’s job was laid out by congress and supported fully by Chris Dodd and Barney Frank. Their mission was simply to buy up every mortgage that they could, so that banks would keep lending. You think I’m crazy? Read More >>