Monday, October 06, 2008

Bailout - The blame game

The rescue/bailout plan outcome is still yet to be seen but the finger pointing is out of control.

The fact someone can blame our economic crisis on the current administration (Bush I assume) shows how uninformed that person may be. I will be the first to say Republicans have to own up to some of the mistakes, but when you look at the underlying problem, Democrats have a lit match in their hand.

I've already discussed the bailout and will not go into whether it's good or bad. The fact of the matter is our current economic meltdown stems from the breakdown in the lending or mortgage industry. The bottom layer of that industry is Freddie Mac and Fannie Mae.

The meltdown of Fannie and Freddie, which has led to government intervention of the companies, began with risky mortgages the companies were buying. Under Democratic leadership the companies were urged to provide more affordable housing opportunities to lower income families. Fannie and Freddie were more than willing to do this as it would increase their gains but also led to the unregulated buying of risky housing loans. 

Several times the Bush administration and even John McCain have expressed concern about the lack of regulation of the two companies. McCain even proposed a bill to increase regulation but was voted down by the Democrats.

It has also been brought to light several Democratic Senators who have received political  contributions from Fannie and Freddie, number 1 being Sen. Chris Dodd who is chairman of the Senate Banking Committee and number 2 is Barack Obama. Remember Obama has only been in the senate for four years and has received more than long time Senators like John Kerry.

The following video explains  much of what has gone on at Freddie and Fannie.


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