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Today, four former CEOs of Fannie Mae and Freddie Mac testified before the on how their companies’ actions may have “contributed to the ongoing crisis.” Blaming Fannie, Freddie, the Community Reinvestment Act (CRA), and low-income people is one of conservatives’ favorite talking points. In September, Rep. Michele Bachmann (R-MN) touted an article criticizing the CRA for pushing “Fannie and Freddie to aggressively lend to minority communities.”
But as the Wonk Room’s Pat Garofalo points out, at the beginning of today’s hearing, Chairman Henry Waxman (D-CA) said that 400,000 documents amassed by the committee showed that the right-wing claim is nothing more than a conservative myth. Later in the hearing, Rep. Edolphus Towns (D-NY) asked the four CEOs whether poor people caused the current financial crisis. All said “no”:
- Richard Syron, former Freddie CEO: “I would think that it wasn’t mostly trying to do things for poor people.”
- Daniel Mudd, former Fannie CEO: “[W]hen the market goes down, it’s the folks who are the closest to the margin who — who get hurt first and longest every time.”
- Leland Brendsel, former Freddie CEO: “I cannot recall ever being forced to make — or to purchase a mortgage loan that I didn’t feel, as a matter of policy at Freddie Mac, was a good mortgage loan, a sound mortgage loan, and an attractive mortgage loan for the homebuyer or the owner of an apartment building.”
- Franklin Raines, former Fannie CEO: “I do not believe that poor people are the cause of the current financial crisis. … Most of the losses, as I read the record, have come on mortgages that were made to middle-class and upper-middle-class people, not to poor people.”
Watch it:
Congress passed the Community Reinvestment Act in 1977, requiring banks “to lend throughout the communities they serve.” In the 1990s, greater mortgage lending to lower-income households by CRA-coveed banks increased the homeownership rate for lower-income and minority families. As CAP scholar Tim Westrich has written, “The real culprits in the mortgage mess are non-bank mortgage companies — not covered by CRA — that originated the lion’s share of bad mortgages at the heart of the crisis. They made an estimated 50 percent of subprime loans in 2005.”
Numerous other scholars, including Nobel-winning economist Paul Krugman and Center for Economic and Policy Research co-director Dean Baker, have also explained that while Fannie and Freddie made many bad decisions, they weren’t primarily to blame for the financial crisis. At a hearing in September, former top government economic experts agreed that conservatives were pushing myths, rather than facts.
Source: Think Progress
Blagojevich
WASHINGTON (AP) — President-elect Barack Obama is calling for the Illinois governor to resign.
Obama spokesman Robert Gibbs says the president-elect agrees with other prominent politicians in Illinois and elsewhere that “under the current circumstances, it is difficult for the governor to effectively do his job and serve the people of Illinois.”
Illinois Gov. Rod Blagovich was arrested Tuesday, accused of scheming to enrich himself by selling Obama’s vacant Senate seat. The governor has authority to appoint the replacement.
Source: Washington Times
Former Iranian President Akbar Hashemi Rafsanjani gives a speech after leading the Eid Al-Adha prayers at Tehran University. Rafsanjani on Tuesday accused US president-elect Barack Obama of mimicking his predecessors tough stance on Tehrans nuclear drive.
This is not the only talk coming from that region – I believe that it was Iran’s secretary/minister of defence who made similar jibes about Obama’s carrot and stick, tough diplomacy stance, truth be told Europe has attempted to negotiate with Iran, only to find, one; through a leaked document that they were taking them for a ride all along – where the Iranians were openly deceiving them and laughing about it and two; the nuclear watch dog IAEA has had little success in getting Iran to cooperate with inspections – all while Iran continues to make noises about wiping out Israel. Moving to the unthinkable – a nuclear attack on Israel would mean that neither the Israelis nor the Palestinians would be able to make use of the land. In addition the world would have to form a coalition and go after Iran. When Ahmadinejad first stated publicly that Israel should be wiped from the map – top German military officials were saying that America may need to attack Iran. What Obama is saying quite clearly that in order for America not to appear as the aggressor – extend a diplomatic hand – albeit a tough one – tighten sanctions – and if war with Iran unavoidable then he has much of Europe and the free world behind him – support that will no doubt be useful.
Influential former Iranian president Akbar Hashemi Rafsanjani on Tuesday accused US president-elect Barack Obama of mimicking his predecessor’s tough stance on Tehran’s nuclear drive.
“I don’t expect someone who considers himself to be originally from Africa and a member of the oppressed black race in America to repeat what (George W.) Bush has to say,” Rafsanjani said in a sermon on state radio.
In an interview broadcast on Sunday, Obama vowed “tough but direct diplomacy” with Iran, offering incentives along with the threat of tougher sanctions over its atomic programme.
During his term, Bush spearheaded the international campaign against Iran’s atomic drive which the United States fears could be a cover for ambitions to build nuclear weapons, allegations denied by Tehran.
The outgoing US president once famously branded Iran as part of an “axis of evil” and never ruled out military action over its nuclear work.
“I advise (Obama)… we don’t want your incentives and your punishments will not stop us either,” he said in a speech marking the Muslim Feast of the Sacrifice or Eid al-Adha.
“It’s better for you to be reasonable and not to deprive Iran of its rights.”
The UN Security Council has repeatedly demanded that Iran freeze its uranium enrichment work, the process which makes nuclear fuel as well as the fissile core of an atom bomb, but Tehran has refused.
Source: AFP
Senator Barack Obama was joined by Gov. Rod R. Blagojevich, left, and Mayor Richard M. Daley in Chicago in April 2007.
In a sequence of events that neatly captures the contradictions of Barack Obama’s rise through Illinois politics, a phone call he made three months ago to urge passage of a state ethics bill indirectly contributed to the downfall of a fellow Democrat he twice supported, Gov. Rod R. Blagojevich.
Mr. Obama placed the call to his political mentor, Emil Jones Jr., president of the Illinois Senate. Mr. Jones was a critic of the legislation, which sought to curb the influence of money in politics, as was Mr. Blagojevich, who had vetoed it. But after the call from Mr. Obama, the Senate overrode the veto, prompting the governor to press state contractors for campaign contributions before the law’s restrictions could take effect on Jan. 1, prosecutors say.
Tipped off to Mr. Blagojevich’s efforts, federal agents obtained wiretaps for his phones and eventually overheard what they say was scheming by the governor to profit from his appointment of a successor to the United States Senate seat being vacated by President-elect Obama. One official whose name has long been mentioned in Chicago political circles as a potential successor is Mr. Jones, a machine politician who was viewed as a roadblock to ethics reform but is friendly with Mr. Obama.
Beyond the irony of its outcome, Mr. Obama’s unusual decision to inject himself into a statewide issue during the height of his presidential campaign was a reminder that despite his historic ascendancy to the White House, he has never quite escaped the murky and insular world of Illinois politics. It is a world he has long navigated, to the consternation of his critics, by engaging in a kind of realpolitik, Chicago-style, which allowed him to draw strength from his relationships with important players without becoming compromised by their many weaknesses.
By the time Mr. Obama intervened on the ethics measure, his relationship with Mr. Blagojevich, always defined more by political proximity than by personal chemistry, had cooled as the governor became increasingly engulfed in legal troubles. There is nothing in the criminal complaint unsealed Tuesday to indicate that Mr. Obama knew anything about plans to seek money and favors in exchange for his Senate seat; he has never been implicated in any other “pay to play” cases that have emerged from the long-running investigation of the Blagojevich administration.
Out Foxing Karl Rove 
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