Sunday, January 24, 2010

Congress Disses America's Voters

Sunday, January 17, 2010

The Fraud of Fannie Mae, Freddie Mac, & the U.S. Congress

"Fannie and Freddie, both government-sponsored enterprises that are guaranteed and funded by U.S. taxpayers, committed fraud so massive it dwarfs the Enron scandal."

As far back as 1993, Fannie Mae and Freddie Mac were investing in risky subprime and Alt-A loans, but routinely misrepresenting them as "Prime."

Without Fannie Mae and Freddie Mac’s U.S. Government certification of millions of bad loans as safe, other banks, both domestic and foreign, would not have bought them. More importantly, world financial markets would not have relied on those packaged subprime loans as collateral which resulted in the collapse of those world markets when their U.S. investments went bad. Fannie Mae and Freddie Mac were United States government-sponsored, government-backed enterprises, guaranteed and funded by the taxpayers of the United States, that committed fraud so massive that it left the world's financial markets in ruins.

The warnings of economists who saw this coming decades ago went unheeded by the all-knowing U.S. Congress. Even President George W. Bush warned the Democrat-controlled Congress that such massive government involvement in the housing market would inevitably produce catastrophic results and he pleaded for reforms. Senator Barack Obama and the Democrats voted down the pleadings of President Bush, attacking him as an enemy of home ownership for poor minorities. Democrats like Senator Barack Obama and Congressman Barney Frank used Fannie Mae and Freddie Mac as a piggy bank to buy votes for themselves and to keep the Democrat majority in power. It worked as they schemed to give homes to low-income individuals who had no capacity to repay the mortgages on the homes. So, here are we, the world, in a government-created financial calamity.

However, the story line of the Barack Obama administration is that this a “Great Recession” caused by President George W. Bush and Capitalism. No one tells the American taxpayers of the many high-ranking officials currently running the Obama administration who themselves profited immensely from that same mortgage fraud business. The man at the very beginning of the Fannie and Freddie fraud that brought down the world's financial system was Jim Johnson, who is now a “trusted adviser” to Barack Obama, and in fact helped him pick his running mate, Senator Joe Biden. And the list of villains continues to now.

You see, in American democracy of today, the villains who cause the greatest suffering for their fellow countrymen are the very ones who are anointed to profit from the very catastrophes they cause for others. That is because in American democracy today, the incumbent villains always get voted back into office.