In last night's speech to the Nation, President George W. Bush took JOHN MCCAIN's advice and called for an Economic Summit Meeting with leaders of Congress, including Sen's McCain & Barack Obama later this afternoon (4:00pm EST). Here is the President's speech from last night:CLICK HERE TO SEE THE VIDEO
Mr. President, (referring to the Presiding Officer of the Senate) this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets.
The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac. The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005.
These are entities that have demonstrated over and over again that they are deeply in need of reform. For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac—known as Government-sponsored entities or GSEs—and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns.
In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay. I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation."
Clinton put the Community Redevelopment Act, a Carter era law designed to encourage minority home ownership, on steroids. And in so doing, he helped create the market for the risky sub prime loans that he and Democrats now decry as not only greedy but "predatory."
Two of Barack Obama's top staffers, James Johnson who headed the VP selection Committee and Penny Pritzer, Obama's campaign Finance Chair were both not only involved in this debacle but are attributed in creating the situations that began the sub prime lending schemes that caused the mortgage collapse.
Pritzer along with Earnst and Young working through Merrill Lynch created the sub prime financial engineering that created this meltdown. While Johnson was CEO at Fannie Mae when the Clinton Administration ordered the beginnings of the high risk market through the Community Redevelopment Act.
The very reform act that could have stemmed this
collapse in 2005 co-sponsored by John McCain was voted against by Barack Obama who also was the third highest recipient of campaign donations from the Fannie Mae and Freddie Mac PACS behind only Christopher Dodd and John Kerry.
The hypocrisy of Obama in claiming that the GOP , President Bush and by inference John McCain caused this problem and did nothing to prevent it when in fact just the opposite is true as it began under the Clinton Administration with its birth created by Democrats who are now involved with the Obama campaign, shows that it is Obama who is ignorant about the economy while McCain knows what he is talking about.
McCain's statement that the fundamentals of the economy are still strong has been backed up by the 3.3 % growth in the economy last quarter as well as all other key economic indicators still holding strong. Democrat claims that we are in a recession heading to a depression are scare tactics as even the definition of a recession is two consecutive quarters of negative growth. This economy has not even experience on quarter of negative growth. The mortgage debacle was caused by greed and sub prime loans that created a bubble that was bound to burst. A bubble that was begun by Democrats and their supporters.
A problem that McCain foresaw and tried to stem and Obama voted with Democrats to keep going. Then Obama hired the major instigators of the schemes that created the sub prime lending chaos as top staffers of his Presidential campaign. So who is actually in touch about the economy ? Well it certainly is NOT Barack Obama. Rather the proven foresight of John McCain as well as his understanding of how an economy actually works instead of trying to scare voters as Obama does proves that McCain is the candidate who will stem the tied of greed and bring necessary reforms while allowing the market based economy to continue to grow.
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