Let's reform banking, healthcare, and save some money...

[WhiskeyGirl]

I keep remembering that banking reforms of the past were supposed to save money for those with mortgages.  They make billions for those who used credit default swaps and derivatives instead of common sense and tried and true methods of doing business.  Foreign investors make loads of money...

The result?  TARP and continuing bailouts.  Taxpayers ended up being the big losers.

There were problems with Freddie and Fannie years ago.  Rahm Emanuel was part of the board when the red flags started hitting the fan, and some in Congress tried to make reforms before the big failure last year.

Did everything fail overnight?  No it did not.  Why didn't someone do something?

May 25, 2006

Sen. John McCain [R-AZ]: Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say 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.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.

http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190


This is a paper from 2005.  Someone had the right idea.  Take taxpayers off the hook for

Limiting the GSE portfolios is serious business for the taxpayers and the economy, as well as for the GSEs. The taxpayers and the economy will benefit because they will be relieved of the risk of a GSE default, with a resulting taxpayer bailout and possible systemic effects. For the GSEs, however, the result will be a sharp reduction in profitability--perhaps as much as an 85 percent decline--as they are compelled to carry out their mission through the less risky technique of securitization and the issuance of mortgage-backed securities (MBS).

http://www.aei.org/outlook/23187

The bill, did not make it into law.  I wonder why?  Did all those folks in Congress think that Freddie and Fannie were safe?  Or, did they suggest over and over that the poor should have homes and mortgages too?  The senate was picking on poor people?

What about taxpayers?  Didn't the bailout make us poor?  Isn't all this debt and spending ruining our currency?

Where was common sense? 

Where is common sense today?  None of the healthcare numbers make sense.  Why should Federal or state taxpayers be on the hook for global healthcare expenses?

Maybe healthcare legislation will collapse the dollar completely?

Isn't it possible reform in 2005 could have saved the banking system from collapse?  Oops!!! it would have impacted profits for these firms and their foreign partners.

Anyone really believe these same folks in Congress that could not reform Freddie and Fannie will spend our healthcare challenges better?  Save money?  Really insure the poor in a sustainable manner?

What kind of track record do these folks have?

[WhiskeyGirl]

This sounds familiar too -

I think there is an issue that we are not focusing on and should focus on more as we talk about reforming the GSEs, but in particular in S-190, is giving the regulator far more authority and far more latitude to do the things that we call upon our regulators to do and have confidence that they will do it. You know the litany of, I believe the excesses of the GSEs, Fannie and Freddie, last year’s lobbying at over $23 million and running television ads challenging the Congress when we were marking up my first bill – which I just found astounding.

We chartered these institutions and I wake up in the morning and I’m being personally, those of us who question Fannie or Freddie, we are being vilified that we’re going to undo the entire housing market in this country. If you remember one of those commercials, there was an African-American couple sitting at their breakfast table, having breakfast, saying that they’re going to lose their house and all possibility of having any resources and money to go out and borrow money to have a future and their children would have no future because the Congress wants to do away with that liquidity that has hereto been available to low-income individuals. Just outrageous, completely outrageous. And I said so.

I remember when I said those things and I commented at the markup, and some of you may have been there, that my comments, as inarticulate as they may have been, and as I am, were greeted with almost guffaws by many of my colleagues.

http://www.debatepolitics.com/us-partisan-politics-political-platforms/36670-who-killed-federal-housing-enterprise-regulatory-reform-act-2005-a-2.html

Lots of good links there.

Sounds like some healthcare commercials.  Somebody won't get care unless we pass this massive spending.

How much will this healthcare grow to in five years?  How many more illegals will come here to get treatment?

How many generations of Americans will lose what is left of their retirement and education savings?  It seems like Congress had the opportunity to prevent the collapse of the banking sector, but did nothing.  Just put the burden of debt on future generations of taxpayers.

How long before the dollar collapses?  How much longer until all money in the US is worthless?

Say goodbye to all your savings?

Why would these same people be able to save healthcare?  Get everyone insured for less?

Was Freddie and Fannie really a good thing for taxpayers?  The only one's who seem to have reaped profits are Wall Street and Foreign Banks.  US taxpayers got stuck bailing them out.  The generational debt burden is on taxpayers.

Anyone think taxpayers will really get a deal on healthcare from Congress and the White House?  What kind of track record do these two groups have?


Congress and the White House are like the Grim Reaper for taxpayers.  Nothing good for the economy or prosperity seems to be created by these groups.

Lots of folks make money, but it isn't Main Street.