blogs.abcnews.com/politicalpunch/2008/09/despite-claims.html
Jake Tapper is ABC News' Senior National Correspondent based in the network's Washington bureau. He writes about politics and popular culture and covers a range of national stories.
Bare Sterns* Despite Claims Today He Warned of this Crisis, McCain in 2007 Said He Didn't See This Crisis Coming September 17, 2008 12:24 PM "Two years ago, I warned that the oversight of Fannie and Freddie was terrible, that we were facing a crisis because of it, or certainly serious problems," Sen. "The influence that Fannie and Freddie had in the inside the Beltway, old boy network, which led to this kind of corruption is unacceptable and I warned about it a couple of years ago." How does this claim of foresight square with this interview that McCain gave to the Keene (NH) Sentinel, discussing the subprime mortgage crisis, in December 2007? Q: "Well the dimension of this problem may be surprising to a lot of people, but to many people, to many others there were feelings that there was something amiss, something was going too fast, something was a little too hot. Or, I mean you're a busy guy, you're looking at a lot of things, maybe subprime mortgages wasn't something you focused on every day. And I was surprised at the dot-com collapse and I was surprised at other times in our history. As I say, I never thought I'd pick up the paper and see a city in Norway is somehow dramatically impacted by it. When I say surprised' I'm not surprised when in capitalist systems that there's greed and excess. I think it was Teddy Roosevelt who said unfettered capitalism leads to corruption' or something like that, that people have disputed for years. "But so, in this whole new derivative stuff, and SIBs and all of this kind of new ways of packaging mortgages together and all that is something that frankly I don't know a lot about. "But I do rely on a lot of smart people that I have that are both in my employ and acquaintances of mine. But, a guy that's on my staff named Doug Holtz-Eakin, who was once the head of the Office of Management and Budget, said that there was nervousness out there. There was nervousness that we had such a long period of prosperity without a downturn because of the history of our economy.
did indeed deliver a speech on the Senate floor in 2006 in which he warned of a problem with Fannie Mae and Freddie Mac and the risks they posed to the housing market and the economy as a whole. But that said, any attempt to paint him as the Paul Revere of this current crisis doesn't seem to square with his "straight talk" from November 2007.
Despite Claims Today He Warned of this Crisis, McCain in 2007 Said He Didn't See This Crisis Coming: User Comments The new code word, McCain's 7 lobbyists but we'll never hear about Penny Pritzker, or Jim Johnson, I can guarantee that. Posted by: pennsylvaniavoter | Sep 18, 2008 2:05:08 AM "Two years ago, I warned that the oversight of Fannie and Freddie was terrible, that we were facing a crisis because of it, or certainly serious problems," Sen. McCain did indeed deliver a speech on the Senate floor in 2006 in which he warned of a problem with Fannie Mae and Freddie Mac and the risks they posed to the housing market and the economy as a whole. Posted by: Erika | Sep 18, 2008 1:36:12 AM There's one thing Democrats, Republicans, Conservatives, Liberals, Independents, Socialists, et al, can all agree on: Jake Tapper is a tool. Posted by: BrianK | Sep 18, 2008 1:33:50 AM >>Baxter Greene | Sep 18, 2008 12:42:45 AM: Thank you for your excellent post; There will be NO investigation of Senator O's complicity. This was the beginning of this crisis because all the speculators saw the big money tree growing in Wash. Posted by: pennsylvaniavoter | Sep 18, 2008 1:25:46 AM Richard Greene: Thank you for taking your time in sending that e-mail. Posted by: marfa | Sep 18, 2008 1:13:25 AM Mikhah: not a shovel of dirt has been lifted-nor will it be until the federal government puts up backing and tax incentives for the oil companies to build them-government backed and financed-more corporate welfare-republicans scream free trade and market forces dictate and then bail out every failed business-republicans couldn't sucessfully run a zoo. Posted by: cowgirlblues | Sep 18, 2008 1:12:34 AM ABC News: You have the obligation to thoroughly investigate a matter and report your findings as they truly are, and not as you WANT them to be. Posted by: marfa | Sep 18, 2008 1:05:51 AM since McCains major experience in finacial collapes came as a defemdant and participant in the Keating 5 scandals-who more experienced than he to recognise greed and corruption. Yes mr McCain has more experience than obama in this area-that of a DEFENDANT Posted by: cowgirlblues | Sep 18, 2008 1:03:21 AM This financial mess is the fault of BOTH parties. And yes, both candidates have people in their campaigns that are perhaps "questionable". Also the solution to solving this economical crisis is NOT a simple thing. I have yet to see two economists agree as what should be done. This next election I will vote for the ticket that I believe will have the BEST interests of this nation at heart, and who will govern with the interests of the American citizen in mind. It is imperative that the ticket not only can, but is willing to reach across the hall and work on things that will make this country better, stronger and safer. "Business as usual" is going to be the downfall of this nation, and do not make the mistake thinking that this great nation cannot fall! Posted by: marfa | Sep 18, 2008 1:00:06 AM Congressman Ron Paul US House of Representatives July 16, 2002 Mr Speaker, I rise to introduce the Free Housing Market Enhancement Act. This legislation restores a free market in housing by repealing special privileges for housing-related government sponsored enterprises (GSEs). These entities are the Federal National Mortgage Association (Fannie), the Federal Home Loan Mortgage Corporation (Freddie), and the National Home Loan Bank Board (HLBB). One of the major government privileges granted these GSEs is a line of credit to the United States Treasury. According to some estimates, the line of credit may be worth over $2 billion. This explicit promise by the Treasury to bail out these GSEs in times of economic difficulty helps them attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a massive unconstitutional and immoral income transfer from working Americans to holders of GSE debt. The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase the debt of housing-related GSEs. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors. Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges of Fannie, Freddie, and HLBB have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans. However, despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policies of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-in...
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