Fannie & Freddie

For anyone who is confused about who is to blame for all this economic meltdown (and I am one of those who has been confused by it), here's some perspective that makes at least some sense to me: back in 2005 legislation was proposed that would have imposed a much stronger oversight of Fannie Mae and Freddie Mac. It was apparent that both were heading for trouble and that reform was needed. It's impossible to know whether the legislation, if passed, would have averted today's meltdown. But we do know that the legislation was defeated along party lines, with the democrats (including Barrack Obama, Hillary Clinton, Harry Reid, and Chris Dodd) voting to defeat it. And we also know that Barrack Obama and Chris Dodd were by far the top two recipients of financial donations from Fannie and Freddie in its history. There were three co-sponsors on the reform legislation. One of those three was John McCain. I'm not sure why we don't hear all that much about it today from not only the press, but from the McCain campaign. Sure seems like there should be a lot of 3 year old video and sound bites from all of these people speaking out about this piece of legislation, both for and against. Seems like it would make for a nice ad for McCain. Instead we hear McCain flailing around with mixed messages, many of which ring as off the mark. Obama is not any better. His problem has been his slow response and lack of committing to any ideas for resolving the meltdown. Bottom line: neither candidate seems to know what to do here.

UPDATE: In 2003 the New York Times printed an article detailing the Bush Administration's proposals for reforms to Fannie Mae and Freddie Mac. Within the article was this statement: "These two entities - Fannie Mae and Freddie Mac - are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Why isn't Barney Frank being called to the carpet today? If George Bush had made this statement, and it was the Democrats who proposed reform, the press would have been all over it.