IN THE MID 1930s, THE COMMUNIST PARTY WAS STRONG WITHIN THE U.S.   IT WAS COMMON KNOWLEDGE THAT THE PARTY WAS WAITING FOR ANOTHER DEPRESSION TO TAKE OVER OUR GOVERNMENT.  

 In 2008, when the Government took over the Giant Mortgage Companies, on the Internet information it was given out that neither Fannie Mae or Freddies had filed Bankruptcy but the Government stepped-in in advance to prevent a loss.  Just before the Elections?  It was the economic crisis that influenced the Elections and finished George Bush in the eyes of the Nation. 

                                       Facts behind the economic mess
                 The following is a condensation of a series from the Investor's Business Daily:
 

        1977:  Pres. Jimmy Carter signs the Community Reinvestment Act into Law.  The law pressured financial institutions to extend home loans to those who would otherwise not qualify.   The Premise:  Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc.  Statistics bear out, it did not help.

How did the government get so deeply involved in the housing market?     

        Answer:  Bill Clinton wanted it that way.

        1992:  Republican representative Jim Leach (IO) warned of the danger that Fannie and Freddie were changing from being agencies of the public at large to money machines for the principals and the stockholding few.

        1993:  Clinton extensively rewrote Fannie Mae and Freddie Mac's rules turning the quasi-private mortgage-funding firms into semi-nationalized monopolies dispensing cash and loans to large partisan voting blocks and handing favors, jobs and contributions to political allies.  This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.

       1994:  Despite warnings, Clinton unveiled his National Home-Ownership Strategy which broadened  the CRA in ways Congress never intended.

       1995:  Clinton orders Robert Rubin's Treasur Dept to rewrite the rules as Congress is about to change from a Democrat  to Republican majority.  Robert Rubin's Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans to get a satisfactory CRA rating.  The rating was key to expansion or mergers for banks.  Loans began to be made on the basis of race and little else.

        1997 - 1999:  Clinton enlisted Andrew Cuomo, then Secretary of Housing and Urban Development, allowing Freddie and Fannie to get into the sub-prime market in a BIG way.  Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.

With incentives in place, banks poured billions in loans into poor communities, often 'no doc', 'no income', requiring no money down and no verification of income.   Worse still was the cronyism:  Fannie and Freddie became home to out-of work-politicians.  384 politicians got big campaign donations from Fannie and Freddie.  Over $200 million had been spent on lobbying and political activities.  During the 1990's Fannie and Freddie enjoyed a subsidy of as much as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.  Did it work?  Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.
                                                                                                                                                                
        1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses.  Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place.  "We manage our political risk with the same intensity that we manage our credit and interest rate risks," Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama advisor, bragged to investors in 1999.

        2000:   Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the 'special status'.  The Democratic Congress raised a ruckus as did Fannie and Freddie, headed by politically connected CEO's who knew how to reward and punish.  "We think that the statements evidence a contempt for the nation's housing and mortgage markets" Freddie spokesperson Sharon McHale said.  It was the last chance during the Clinton era for reform.

        2001:   The Bush Administration tried repeatedly to bring fiscal sanity to Fannie and Freddie but the Democratic Congress blocked any attempt at reform; especially Rep. Barney Frank and Sen. Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.

        2003:  Bush proposes what the NY Times called 'the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago'.  Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democratic Congress killed reform.

        2005:  Fed chairman Alan Greenspan warns Congress:  'We are placing the total financial system at substantial risk'.  Sen. McCain, with two others, sponsored a Fannie/Freddie reform bill and said, "If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie the housing market, the overall financial system and the economy as a whole".  Sen. Harry Reid accused the GOP; of trying to 'cripple the ability of Fannie and Freddie to carry out their mission of expanding homeownership'  The bill went nowhere.

        2007:  By now Fannie and Freddie owned or guarantee over half of the $12 trillion US mortgage market.  The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall St. to repackage the bad loans and sell them to investors.  As the housing market fell in '07, subprime mortgage portfolios suffered major losses.  The crisis was on,  though it was 15 years in the making.

        2008:  McCain has repeatedly called for reforming the behemoths, Bush urged reform 17 times.
 

MEDIA DISTORTION
         Still the media have repeated about this being a "Bush Disaster".  Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats.  That's why you are now being asked for $700 billion!!

 And the bail-out money is being used, not to help the people but for the Government to buy out the Banks.  The definition of Communism:  Government = the Central Bank

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Postscript:  ACORN is one of the principle beneficiaries of Fannie/ Freddie's slush funds.  They are currently under indictment or investigation in many states.
 

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