Part Two: Setting the Record Straight
In Part One of this series, we looked at causes of the mortgage meltdown in terms of Wall Street. They aren't the only one's with dirty hands, our corrupt Congress is to blame too. While Obama, Pelosi, and Barney Frank blame "Bush and the Republicans" with the Elite Media parroting along, the REAL story is quite different.
Fannie Mae was created as part of FDR's New Deal. It was created to buy and secure mortgage debt, so the banks could clear their books and write more loans. In 1968, Congress took Fannie Mae's debt off its books by privatizing the company (but still let them keep their government charter). Then in 1970, Congress created Freddie Mac, thinking that way, Fannie Mae couldn't monopolize the secondary mortgage market. These two companies are known as government-sponsored enterprises (GSE). A GSE is a publicly-traded, private corporation created by Congress, and backed with an implicit government guarantee.
As you read the rest of the story, keep the following words by Barack Obama on September 15, 2008 in mind.
"[The Republican] philosophy that lets Washington lobbyists shred consumer protections and distort our economy so it works for the special interests instead of working people ... Confident of their clout in Washington, they made hundreds of billions in bad loans, knowing that if they lost money, the government would bail them out ... And they were right. The gambles did not pay off, our economy went into recession, and the taxpayers ended up footing the bill. Does that sound familiar?"
If Barack Obama was speaking the truth, he'd call for Congressional hearings and a criminal investigation on Fannie Mae and Freddie Mac, after all, he's quick to use the Department of Justice to silence his critics, so you'd think he'd want to root them Republicans out!
But he doesn't call for any such investigation ... because it would destroy his political machine and aspirations to rule the world.
Here's what REALLY happened ...