Quote:
Originally Posted by larrymcg421
"Two years ago, I warned that the oversight of Fannie and Freddie was terrible, that we were facing a crisis because of it, or certainly a serious problem."
-- Sen. John McCain, in an interview earlier today, via ABC News.
"So, I'd like to tell you that I did anticipate it, but I have to give you straight talk, I did not."
-- McCain, in an interview with Keene Sentinel on the mortgage crisis in December 2007.
McCain's straight talk is going in all sorts of different directions.
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They're completely different situations. The first quote is about the terrible public/private setup regarding the running of Fannie and Freddie - many "free market advocates" have been railing on it for years (including McCain - who's not even that free market). The second is about the sub-prime craziness that came from a combination of Greenspan keeping rates too low too long and some questionable lending risks by mostly private corporations.
I would expect many fairly knowledgeable financial people could see the issues with Fannie and Freddie, but need some 20-20 hindsight to know the full impact of the Greenspan rates and private mortgage risks. McCain was in that camp and actually being honest about it (not just taking credit like most politicians do).
A few pages back I posted McCain's co-sponsored bill back in 2005 that was spiked by the senate democrats to add some oversight to Freddie and Fannie. One has to wonder why the senate democrats were so against the oversight legislation proposed by Hagel and McCain back in 2005 - especially if protecting against corruption was such a major concern. There were clear signs that steps needed to be taken:
Quote:
As soon as Clinton crony Franklin Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.
Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.
Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.
In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes in its accounting procedures and ways of managing risk.
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