The Lie:
1. WBSM have been peddling a youtube video that allegedly shows black Dems in 2004 preventing reform of of Fannie Mae and Freddie Mac.
2. WBSM have claimed that "social engineering" and affirmative action have helped fuel the mortgage crisis.
3. WBSM have claimed that McCain and the GOP stepped up to save the financial system from Fan and Fred.
The Truth:
1. The 2004 video has no relation to sub prime market failure. It shows a committee hearing with Housing regulators critiquing accounting systems at Fan and Fred. Sub prime mortgages are not at issue in the '04 hearing, not a big part of Fannie and Freddie in 2004, and not even mentioned in the whole 7 hours of hearings.
2. Directing loans to minorities and the CRA has no relation to crisis.
3. Fan and Fred are a small or secondary domino of the crisis. Dems were at the forefront of reform, being the only ones to successfully pass reform acts.
The Details:
1420 White Male Angst Radio has been spending numerous hours slamming Bill Clinton's actions on Redlining and the Carter era Community Reinvestment Act (CRA) as "Social engineering" i.e. affirmative action. They forget that redlining was a real issue with real prosecutions and evidence of bias. A bigger gaffe is the assault on the Community Reinvestment Act as a sort of "social engineering" to direct loans to African Americans.
On the CRA
Truth is, the CRA doesn't even apply to the loans made and bought by the main firms in trouble on Wall St. It applies mainly to depository institutions, and is working just fine. Despite the local GOP defending the poor folks on Wall St from minorities, there is no evidence that those investing in, selling, and repacking sub prime loans were motivated in any way by fear of redlining or the non applicable CRA. There's about as much evidence for that as the Michelle Malkin race bait that illegal alien mortgages are behind the crisis ( also pushed out on WMAR).
Black, like Obama
The hosts have repeatedly played a snappily edited youtube video , which shows various African American democrats grilling investigators, as proof of Democrats blocking reform of Fannie and Freddie and hence failing to avert the current crisis. This emulates the racism of the McCain campaign ads (where Franklin Raines and Kwame KIlpatrick are linked to Obama by virtue of the fact that they are African American).
Trouble is, the House hearing being played in the clip has nothing to do with subprime mortgages. And sub prime mortgages are the root cause of the current bust. In the video an Office of Federal Housing Enterprise Oversight report is discussed, a report that had NOTHING TO DO with sub prome mortgages. In fact
an old SEC report filing by Fannie says of the 2004/2005 period:
We did not participate in large amounts of these non-traditional mortgages in 2004 and 2005.
The video is full of other falsehoods, claiming Fan and Fred themselves made mortgages ( to minorities of course), that Franklin Raines was criminally implicated ( that's a new one). Once again, committee members are talking about an entirely different matter - accounting reform at Fan and Fred. Accordingly:
Although under Raines, Fannie Mae invested in some securities backed by subprime loans, it didn't start buying subprime and Alt-A loans directly (and bundling them into securities) until late 2004 AFTER the accounting scandal.
Misreading the calendar
If you understand the legislative process you would get this focus on accounting.In fact, the first clue comes shortly into the video when Chris Shays mentions that Fan Mae, Fred Mac were not subject to the accounting reform Sarbanes-Oxley act.
If you understood Wall St, you would get that Fan and Fred assumed, but did not originate, bad mortgages.
If you understood the common Gregorian calendar you would understand that 2004 is not 2005, is not 2008. Mortgage reliability was violated elsewhere and later on, and is not relevant to the video.
And yet, a quote or two from Barney Frank in '03 is supposed to seal the sub prime indictment on the Democratss? When one actually looks at the Democrat approach to reform and regulation of Fan and Fred, what do we see?
On Democrats
We see that Democrats, including those featured in the video, were strongly pro reform and eventually succeeded despite GOP opposition. That's quite a contrast to the WMAR 1420 youtube fairy tale.
Of the African Americans attacked in the youtube clip:
Arthur Davis actually voted for a successful house bill (HR 1461) to improve regulation of Fannie and Freddie in 2005.
Gregory Meeks ( also set up in the video) praised the same 2005 bill (HR 1461) as "true bipartisanship" and, like Barney Frank, regretted that the "excellent bill" had been sunk by a GOP amendment that prohibited many non profits from participation.
Maxine Waters ( selectively edited in the video) praised, in 2005, the "bipartisan support for this legislation" and was explicit in claiming that HR 1461 "was a good bill...because..it was going to bring about reform of the GSEs."
So when the Dems are actually on record discussing the actual issue, they are fully backing reform!!
On HR 1461
And guess what? HR 1461 passed the House without much trouble. The only trouble was GOP attempts to keep non profits from potential applicants for competitive housing grants ( causing Meeks, Frank and Waters to vote no).
So with praise and/or support of Democrats the bill went to the Senate , where, WBSM tells us it died in a Senate committee because of Dems. This is another lie, unfortunately. Although WBSM did merely borrow this lie from Amanda Carpenter of the Boston Herald.
On McCain
On his web blog, Ken Pittman lies by saying that McCain "introduced The Federal Housing Enterprise Regulatory Reform Act of 2005." Trouble is S190 ( Senate version of HR 1461) was not introduced by McCain at all -although he did sign on as a co sponsor. Senators co sponsor hundreds of bills annually.
So what did happened to CHUCK HAGEL'S bill? Well, contrary to Pittman's tale, it actually did make it out of the senate committee on Banking, Housing, and Urban Affairs -but too late for congressional action in the GOP's 109th Congress.
On GOP culpability
So why the urge to blame Dems for the "death" of this reform?
Two other developments add to the mystery:
* Ohio Republican Rep. Michael Oxley says that White House ideology scuppered the bi-partisan bill because Bush wanted to kill off Fan and Fred completely.
* Also, we have a Colorado Republican Wayne Allard writing a letter to Senate Majority leader Bill Frist in May 2006 urging that the bill be brought to the Senate floor for a vote. No response came.
Conclusion - Shelby or Frist held up the bill for the White House???
Either way, James B. Lockhart of the FHE Oversight was dismayed that the GOP senate killed the bill and appealed that it be revisited in the next Congress. And so it was, Barney Frank passed it next time round as HR 1427, co sponsored by those very Dems attacked in the video - Clay, Meeks, and Waters!!!!!!!!! ( strangely, McCain the regulator didn't sponsor this Senate version).
So why the coverup?
Why the exclusive focus on Barney Frank and Fan and Fred, when the 800 Billion bailout is actually going to Wall St players?
Why do Amanda Carpenter of the Herald and her loyal readers in the southcoast GOP claim that John Kerry, Barack Obama, Chris Dodd and Hillary Clinton were against the Hatch reform bill when it never reached the Senate in 2005/2006?
