As Senator Obama puts it, the current economic crisis is a result of problems initiated by the Bush administration and supported by the deregulatory standards of Sen. John McCain over the past eight years. McCain states that he’s strongly opposed to deregulation of Fannie and Freddie and that the problem did not initiate with his party, but rather quite the opposite. This brings us to the question of the week: Who is telling the truth?!
Subprime lending, a term you may not have heard of before this financial downfall, has caused a universal meltdown of the mortgage-lending market, feeding off the deregulation set forth by Congress. It is a process by which Fannie Mae purchases loans from banks and disburses them to individuals at lower than normal interest rates with a government funded money-back guarantee. Corruption in the Senate and House fueled the fires of home foreclosures across the nation as Fannie and Freddie tag-teamed our mortgage system into financial submission.
The Financial Safety and Soundness Act of 1992 was initiated by the Clinton administration. Obama ‘s Federal Housing Enterprises suggests that the current crisis is a result of Republican ideals of government deregulation, when in fact the Bush administration recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis of 1993 in an attempt to fix the forthcoming collapse. In the second Presidential debate, Obama suggested that McCain was on the payroll of Fannie and Freddie, saying “Senator McCain’s firmwas a lobbyist of Fannie Mae, not mine.”
In fact, Obama worked at Miner, Barnhill & Galland, a law firm that sued Citibank for not providing enough subprime loans to Fannie and Freddie. In return for representing their interests, over the past two years, Obama has received more money per year from Fannie and Freddie than any other Senator in the past 20 years! He’s received 49 times more money per year than McCain, so he lied about his non-involvement. I could go on and on about Obama’s involvement, including his relationships with Jim Johnson and Franklin Raines, two corrupt leaders in Fannie and Freddie, but let’s talk about McCain.
McCain warned about the pending financial crisis as early as 2005, and introduced a bill regulating Freddie and Fannie. It was called the Federal Housing Enterprise Regulatory Reform Act of 2005. Introducing the bill, McCain spoke of the rampant spending and lack of regulation in Freddie Mac and Fannie Mae. The bill did not become a law, as most Democrats (including Obama) opposed it. Why would Obama support it? Enacting legislation that would lead to the regulation of Freddie and Fannie would result in elimination of the bonuses he’s been receiving.
Over the past eight years Congress has been unable to agree on the problem with Fannie and Freddie. Obama says he knows what to do with Freddie and Fannie. He says that once we get rid of “Republican de-regulation,” somewhat of an oxymoron in this sense, we will be able to control the outrageous spending of these organizations and eliminate corruption in Congress.
Look deeper than rhetoric to find out the truth and then make your opinion. If you look at the voting history between Obama and McCain and still believe that Obama is ready to lead this country then I would encourage you to vote for him. We have some fundamental disagreements, but at least you’ll actually know what you’re voting for.