Foxes don't have mirrors

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Americans should welcome hearings currently underway in Congress on the roots of the financial system's meltdown.

One of the first CEOs that House Oversight Committee members sharply grilled was Richard S. Fuld Jr. of Lehman Brothers. Fuld squirmed and dodged while trying to explain why he handed out millions in bonuses to fired executives while pleading to the federal government to rescue his firm from the bankruptcy in which it now finds itself.

Many more failed CEOs who bailed out with their multimillion-dollar golden parachutes are also being put on the congressional hot seat, and deservedly so.

Yet here's our problem with the hearings. They're only looking at part of the cause of the disaster. Yes, Wall Street honchos who did wrong should be exposed and, when appropriate, legally punished.

But what about Congress' own role in the subprime mortgage mess that is currently tumbling our economy into what may be the harshest recession since the early 1970s? Without the subprime catastrophe, caused by a burst housing bubble that Congress not only encouraged, but mandated and protected, none of the awful strains on the nation's financial system could have happened.

The central institutions in the mortgage collapse were Fannie Mae and Freddie Mac, the government-sponsored enterprises that were designed to provide mortgages to low-income wage earners. Good intentions, yes, but basically the quasi-government agencies were handing out mortgages to people who couldn't afford them.

During the Clinton administration ushered through the Community Reinvestment Act, which actually required banks to issue bad loans. It seems insane now, but the government began ranking banks on the number of their loans, not their soundness. Quantity over quality -- what a way to run a business. It was Fannie and Freddie's job to lead the way in buying up most of the bad loans.

There were plenty of warnings from economists, left and right, about what a danger this posed to the nation's economy, but congressional Democrats, led by Barney Frank in the House and Chris Dodd in the Senate, protected Fannie and Freddie from any serious structural reforms. The pols' reward: tens of thousands of dollars in campaign contributions.

Democrats complain that deregulation traditionally championed by the GOP is the primary cause of the financial system's collapse and subsequent $700 billion rescue package. Yet, when it came to Fannie Mae and Freddie Mac, it was Republicans, led by President Bush and John McCain, who time and again called for more regulation. And it was Frank and Dodd, operating from their powerful congressional posts, who saw to it that the two tainted agencies stayed largely unregulated.

Minority Republicans are rightly calling for the Democrat-controlled Congress to hold hearings not only on the fallen CEOs, but also their own members' role in the subprime mess. Fat chance. Democrats aren't going to investigate their own, although some of them are as much or more to blame for what's gone wrong as the "golden parachute" CEOs they're grilling.

Here's the final sickening irony: Frank and Dodd, the very congressmen who contributed so mightily to the Freddie Mac and Fannie Mae debacle, are the key congressional players charged with "reforming" them. And so the foxes will stay in charge of the henhouse.

Comments (95)

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Nammy
2
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Nammy 10/13/08 - 01:40 am
0
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"Democrats aren't going to

"Democrats aren't going to investigate their own, although some of them are as much or more to blame for what's gone wrong as the "golden parachute" CEOs they're grilling." Then they ALL need to be fired immediately and replaced with those who will! We all should DEMAND this!

imdstuf
10
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imdstuf 10/13/08 - 01:43 am
0
0

The subprime loans are part

The subprime loans are part of what led to the housing bubble and now all the foreclosures, but you also have to blame the good manufacturing jobs, etc being outsourced more and more. Even the people who initially qualified for their loans fairly cannot make them now with their jobs being sent away. Secondly, if we were just having a problem with houses going into foreclosure, it would not be as huge a deal. The real problem was the people on the market using mortgages as securities, and no one regulating the swaps that were in essence, the insurance on them.

HTN007
19
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HTN007 10/13/08 - 05:55 am
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and the 700 billion for the

and the 700 billion for the bailout........"a spit in the ocean" in terms of the impact it will have on fixing this mess.

christian134
1
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christian134 10/13/08 - 06:07 am
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To expect the Democratic

To expect the Democratic 'powers that be' to actually do something about the criminal activities of their own is to be akin to living in a fantasy world...Of course they are living their now what with the bowing down and kissing the master's boots (Obama) expecting him to give them all they need to live without ever having to lift a finger to work...Now that is blind loyalty to the extreme...Actually they haven't come up with a word for that kind of loyalty...Oh wait a minute they did once before it was called "Hitlerism or Nazism"....

GACopperhead
6
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GACopperhead 10/13/08 - 06:13 am
0
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No, christian, Nazis wiretap

No, christian, Nazis wiretap without warrants, make up lies in order to invade weaker foreign countries, and call themselves "The decider".

christian134
1
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christian134 10/13/08 - 06:28 am
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Your wrong GACopper...Your

Your wrong GACopper...Your wrong...

GACopperhead
6
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GACopperhead 10/13/08 - 06:49 am
0
0

No, christian, I'm not, and

No, christian, I'm not, and history backs me up. Go back and look at the tactics that Hitler used in the 1920s and 30s to build anti-Semite fanaticism. They used rallies filled with hate speech(like Palin and McCain), they used lies and innuendo (Andy Martin and the other lies that have been spread about Obama being Muslim or Arab). There are many great nations that have used illegal arrests and wiretaps, such as the USSR and Communist China. These are the great and upstanding countries that have used the same techniques that the US is using against it's own citizens, and you stand by and justify them. I want to know who the REAL enemies of the Constitution are.....

I4PUTT
5
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I4PUTT 10/13/08 - 06:55 am
0
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There is plenty of blame to

There is plenty of blame to go around. Democrats, Republicans, CEO's, and folks who took these loans who knew they could not afford them are at fault. We don't need any congressional hearings. We have the power of 1 man, 1 vote. According to the polls, the presidency is lost to Senator Obama. It is not too late however, to start cleaning up congress. Look at their voting records. If they are not listening to the folks they represent, vote them out. If they are not voting to cut spending, vote them out. If they are not voting to keep our country safe and take care of Americans first, vote them out. If they are voting to raise taxes, vote them out.

dani
12
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dani 10/13/08 - 06:58 am
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GA C Where do you get your

GA C Where do you get your weird ideas. You are a strange person, no? Do you listen to the wee hours of the morning broadcasts by blowhards who espouse strange and alien beliefs.
You sound a lot like my neighbor who does.

patriciathomas
42
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patriciathomas 10/13/08 - 07:21 am
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You're dead off

You're dead off topic.....again Copperhead. The subprime loans forced on banks and then sanctioned by taxpayer money through Fannie and Freddie were championed by the likes of Barney and Chris. That's what needs to be investigated and have the blame laid in the right place. If ever a situation cried out for a special prosecutor, this one does. By the way blind man, the jobs "outsourced" were forced out of country by overtaxing. Which party is proud of that action?

GACopperhead
6
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GACopperhead 10/13/08 - 07:45 am
0
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pat, no one FORCE any of the

pat, no one FORCE any of the people giving the loans to falsely raise the values of the houses, and NOONE forced Dub to repeatedly take credit for "more people than ever before own houses". There's a difference between trying to help the disenfranchised(by the likes of you) poor to own houses and the rich, unethical(like you) bankers taking advantage of the system. By the way, howcome McCain's campaign manager is directly linked as a lobbyist to Freddie? Howcome it's proven that McCain's campaign has gotten more money from Fannie and Freddie execs and lobbyist? Hmmmmmm.....you're not going to muddle facts with rhetoric. By the way, the jobs weren't outsourced because of overtaxing, those companies that outsourced have gotten all the tax breaks.

christian134
1
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christian134 10/13/08 - 07:50 am
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Your still wrong GaCopper no

Your still wrong GaCopper no matter which way you slice it or pretty it up your still wrong...

Really Bugged
0
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Really Bugged 10/13/08 - 08:12 am
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(Repeatedly) Calling someone

(Repeatedly) Calling someone wrong and not backing it up with persuasive argument is wrong. Jobs have been sent overseas because multinational corporations saw huge profit margins from cheaper labor, lax financial and environmental rules, and monetary incentives from host countries. Now, some of these corporations are experiencing a backlash: nationalism on the part of hometown consumers ("Made in the U.S.A."), poor and sometimes dangerous manufacturing practices in foreign countries, and ethical concerns for the environment and workers harmed in foreign countries. But still, the profit margins are so significant there is not a lot of incentive for these jobs to return to the U.S.

shivas
2
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shivas 10/13/08 - 08:13 am
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0

From the AC Editorial Desk:

From the AC Editorial Desk: Even though most Americans understand what we have written is BS, we believe we can always count on our right-wing bloggers to support us. We understand that blaming Clinton doesn't carry a lot of weight nationally since he did eliminate the deficit, give us 8 years of economic prosperity, and keep us safe, but you and I know he's a liberal, and that should off-set those other accomplishments. It is very disheartening to see all these so-called Americans actually caring about issues this election. It's like they care more about their economic future rather than gay marriage, abortion, and who's an A-rab. But, to the AC faithful, we will continue to feed you this BS as long as it makes you feel warm and fuzzy!!!

raasheedleetawanmomood
0
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raasheedleetawanmomood 10/13/08 - 08:17 am
0
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copperhead, you sir, prove

copperhead, you sir, prove every day you are an idiot. Your inaccurate drivel is becoming quite boring. Why not give it and us a rest for a few days, ok?

patriciathomas
42
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patriciathomas 10/13/08 - 08:24 am
0
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You're wrong Copperhead. The

You're wrong Copperhead. The loans WERE forced on the banks. The CRA and the intimidation factors featured by groups like ACORN were used as clubs to force this redistribution of wealth. When Freddie and Fannie offered to buy these horrible loans with taxpayer money (thanks to Barney and Chris), the banks gladly offered the no risk loans. Profit without risk is a businessman's dream. It did become a taxpayer nightmare though.

patriciathomas
42
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patriciathomas 10/13/08 - 08:32 am
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Really bugged, if the taxes

Really bugged, if the taxes on the manufacturing hadn't become so oppressive, in an effort to punish the achievers, the companies would still be here. If the FairTax plan were adopted, there would be a mad rush to bring companies to this country. The cheaper labor in other countries wasn't enough incentive to move there without the unreasonable taxes for doing business in America. Look for more business moves out of country if Obama has his way.

shivas
2
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shivas 10/13/08 - 08:40 am
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What patriciathomas left out:

What patriciathomas left out: "and I am going to hold my breath until I turn blue until the American people start believing Rush and Hannity like I do!!! It's all Barney Frank's fault!. He was more powerful those 6 years we had a Republican President and Congress, than all of us Republicans collectively. Even though W. has ruined this country economically and militarily, please keep voting for the same. finally, the fair tax is such a great idea, that it's greatest supporter Ron Paul got 3% of the vote. Americans are just stupid!"

LaTwon
1
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LaTwon 10/13/08 - 08:52 am
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shivas ron paul isnt a fair

shivas ron paul isnt a fair taxer............. keep spewing your idiocy and calling people stupid.............. hahahahhhahaaaaaaa

ITDoc
1
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ITDoc 10/13/08 - 08:53 am
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It is ALL no one's fault. The

It is ALL no one's fault. The problems in America were caused by people of all races, political affiliations, and income levels. That is great news, for the solutions to our problems is also Americans of all races, political affiliations and income levels. Conflict sells advertising on news channels. Conflict allows politicians to gain votes. When and only when people decide to stop letting media and politicians set us against each other and work together will this mess be cleaned up. Change begins from the bottom up, not vice versa. I voted last week and was astonished to see the lack of choices in the Columbia County election. Virtually every local office was uncontested by Democrats. State and local politics affect our lives much more than any national office. I call on ALL posters here to set aside the vitriol, quit attacking people personally, and offer real solutions to reattaining the national consensus we had on 9/12/01. United we will stand, divided we will fall.

LaTwon
1
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LaTwon 10/13/08 - 08:55 am
0
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part of the downward draft of

part of the downward draft of the market is money fleeing the U.S. already in expectation that the commie will win. that along with the left shorting the market to try to make sure he wins
with soros and co.

ITDoc
1
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ITDoc 10/13/08 - 09:02 am
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Here are some real solutions:

Here are some real solutions: Encourage candidates to file as independents. This will eventually eliminate partisan politics. (McCain's point).Eliminate tax breaks for businesses that have moved jobs overseas (Obama's point). Reduce taxes on corporations, for every penny taxed to a corp merely appears on the price tags. (McCain). Remove the Government's increasing intrusion on personal and moral issues. (McCain). Increase funding on all levels for education, specifically: more pay for teachers (Neither candidate).Decrease funding for all EXTENDED welfare programs and stipulate drug tests for any assistance. Allow the foreclosures to take place, assist those who lose their homes find AFFORDABLE living, whether it be rental or ownership is completely up to the $$$. (neither). Regardless of our next President, it is up to us the American people to change the habits in our lives which allowed too much, too fast, for too little $$.

ITDoc
1
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ITDoc 10/13/08 - 09:04 am
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Please note: I have foresworn

Please note: I have foresworn against any personal attacks on Obama, McCain or other posters. I have engaged in such in the past and won't be sucked in again. If you feel you must conduct yourself in such a way, I reserve the right to ignore your opinion or demands for more information.

karmakills123
8
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karmakills123 10/13/08 - 09:30 am
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To copper and

To copper and shivas...please show your proof of any falsehoods in the above editoral......then and only then is anyone going to listen to your rantings....we all know what happened and all of your naysaying is not going to change these simple truths....so prove or just quietly be quiet....tall2 I like he way you think.

disssman
6
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disssman 10/13/08 - 09:58 am
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Isn't it amazing that

Isn't it amazing that although this was written by a group of people (the staff) not a single one of the writters corrected the intro sentence to para 7, and the glaring error in the final para. Pretty good for a group effort STAFF. By the way you didn't mention the person receiving the largest amount of money from the corps. that would be Johnny Mac who made 6 times as much as Obama, but then this letter was a group effort and mistakes can happen, can't they?

karmakills123
8
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karmakills123 10/13/08 - 10:02 am
0
0

LOL..deflection? No

LOL..deflection? No Proof..jump on grammar erros :(

KSL
105366
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KSL 10/13/08 - 10:15 am
0
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shivas, Huckabee was the fair

shivas, Huckabee was the fair tax proponent.

draksig
167
Points
draksig 10/13/08 - 11:49 am
0
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You misunderstand the purpose

You misunderstand the purpose of congressional hearings. The party in power in congress holds hearings in order to place blame on others (preferably the opposition party) and exonerate themselves.

angiesdad
0
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angiesdad 10/13/08 - 11:58 am
0
0

exactly right copperhead

exactly right copperhead @7:45 you can't make lenders loan money it's just an excuse to blame clinton as usual.who are these people who got these dream mortgages? when i bought a home in 1998 we had a hard time getting approved.they went through every document with a magnifying glass,and our credit was good.we had a arm also but it never jumped that high.the lenders made a lot of profit,the builders,made money, i remember the construction was booming,so what happened? and if all of this happened during clinton's term whay did it take so long to bottom out?seems like buffoon bush is saturated with teflon like the gipper was.please investigate it !

imdstuf
10
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imdstuf 10/13/08 - 12:19 pm
0
0

Copperhead reads up on his

Copperhead reads up on his history, while Christian just provides nothing to prove her point other than saying Copperhead is wrong. If this is how "christians" base their important decisions "heaven" help us all.

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