The Sunday Paper Staff Blog

Obama supporters must have cringed painfully last night when their candidate pointed out that Republican candidate John McCain signed onto a bill to stop the deregulation of Fannie Mae and Freddie Mac a year after the bill was introduced. Obama, after all, didn’t support the bill at all, with good reason—Obama financially benefitted hugely from Fannie and Freddie’s deregulation, the root of our financial agony today.

The Democrats keep screaming that it was deregulation that wrecked out economy, but they don’t dare talk about specifics because the thing that specifically wrecked our economy was the massive disaster of failed mortgages under Fannie and Freddie and that was a Democratic hit job that started in the late 1990s and started leaving its bloody traces on the housing market in 2006. Yes, it was deregulation, alright, at the hands of the Democrats. In fact, fact—not some campaign spiel, but in actual fact—it was the Republicans who fought tooth and nail to stop Fannie and Freddie’s deregulation, but they were up against outrageous accusations of racism by people like Congresswoman Maxine Waters (D-California), and Congressman Gregory Meeks (D-New York) who attacked the head of the Office of Federal Housing Enterprise Oversight, a minority himself, oddly enough, Armando Falcon, who had the guts to point out the enormous salaries of the head of Fannie Mae, Franklin Raines, and his immediate underling, Jamie Gorelick. How much did these two bozos make? Raines made $1.2 million in bonuses and his salary was more than $500,000 per year. Gorelick made nearly $800,000 in bonuses and her salary was also about $500,000 per year. Why weren’t the Democrats, supposedly the champions of the little guy, screaming bloody murder about these overly posh paychecks to a couple of venal bureaucrats? Because those venal bureaucrats were contributing millions of dollars to Democratic campaigns and one of the biggest recipients of their dirty money was Sen.Barack Obama.

You notice that last night Obama said only that McCain signed onto the bill to fight Obama and his friends the Democratic public trough feeders a year after the bill was introduced. That part's true. Sen. Hagel introduced it in January 2005 and McCain became a co-sponsor in May 2006. What else did Obama say? If you were paying attention, you know that Obama said the bill was killed. Then he stopped himself. Why? Because guess who killed it? The Federal Housing Enterprise Regulatory Reform Act of 2005, as the bill was titled, died in committee, specifically in the Committee on Banking, Housing, and Urban Affairs where it was targeted for failure by Democrats Chris Dodd, Chuck Schumer and Jack Reed, who were also among the biggest recipients of campaign contributions from Raines and his federal housing cartel. What did they do, specifically, since we are talking specifics, to make sure it would die? Time was on their side. It was 2006 and as the mid-term elections lurked on the horizon, the Republicans who dominated the committee were under fire for failures in Iraq. Up against the ropes, the Republicans spent their resources defending decisions in Iraq. All the Democrats had to do was sit back and delay, postpone, and essentially wait out the elections. That’s what they did. The Democrats gained control of Congress in 2006 and the valiant effort to prevent the failure of Freddie and Fannie and all the misery that failure has caused was never mentioned again until Wall Street fell on our heads.

Never forget that in 2005, Armando Falcon tried to sound the alarm. His office reported that “Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.” In hearings on this gross mismanagement, the investigative agency's head, Falcon, was told to shut up by Democrats including Dodd, Schumer, Reed, and Barney Frank, all of whom got fat Fannie and Freddie contributions, just like Barack Obama.