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    To me Purple People are those of us who are neither Republican Red nor Democrat Blue; we find ourselves in between. The internet often represents those on the far left or the far right; this site is for those of us in the middle.

    Since there are a variety of non-conformists that consider themselves Independents, here's a clarification. The point of view of this blog is basically Realist/Libertarian light...

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Fannie, Freddie, and Frank Problems

Fannie Mae and Freddie Mac did not just suffer from a problem with oversight, they suffered from a problem with a lack of foresight.  The issue that is rarely mentioned with these mortgage lenders is that there is an inherent problem with trying to put people into homes that they can’t afford.  As a broad concept it sounds good, ‘put more people in homes’, but assisting people in living beyond their means is irresponsible policy and not the intended role of government.  The whole concept that people will eventually be able to afford these homes because home prices will always rise is foolish.  It is no favor to the person whose home is now in foreclosure, and it’s no favor to the people who live within their means and get hit with the economic fallout of this foolish government policy.

Then there is the problem with Rep. Barney Frank the chairman of the Financial Services Committee who supported the growth of Freddie and Fannie, and opposed its oversight.   Senator McCain along with others did warn that their were problems with these two mortgage institutions, and their concerns were ignored.  The following report discusses how Mr. Frank dropped the ball when it comes to Fannie and Freddie…

3 Responses to “Fannie, Freddie, and Frank Problems”

  1. Barney Frank has been chairman of the committee for less than two years. Democrats barely have a majority in the Senate even now.

    Fannie/Freddie problems have been around for a long time. Anyway, it is the republican administration who has not done anything to regulate or control any financial entity for the last 8 years.

    In case it is still not clear - REPUBLICANS have been IN CHARGE of the government for the last eight years and of both the Senate and Congress for most of the eight years,

  2. Who received more campaign donations than Chris Dodd the Chairman of the senate banking committee !
    Let’s see now, over $160,000 from Fannie,a sweetheart loan deal from Countrywide, and some money from AIG ! This smacks of impropriety , if he is innocent why did he not return the donations ?

  3. Dave: Democrats have controlled the Senate for four of the last eight years, including the last two and, of course, now - when the financial crisis is actually occurring. In case you didn’t pay attention in school, laws are actually made in Congress. The President can only sign or veto what Congress passes, such as increased FM/FM oversight. The president does not make the law, he can only carry out the laws that Congress passes. Fannie Mae and Freddie Mac were in trouble in 2005 because of accounting irregularities and it was Senate Democrats who prevented passage of the additional oversight that McCain and other Republicans wanted. Nothing happened in Congress before now because Democrats, raking in campaign cash from FM/FM and getting sweetheart refinancing deals from Countrywide, were opposed to any reforms that their benefactors also opposed. (Nor is it any secret that most financial industry players are Obama supporters.) President Bush has many faults, but failure to strengthen FM/FM regulation can only be attributed to Congress, and the record is clear that it was congressional Democrats who prevented any additional regulation from passing.

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