This isn't even me bashing President Bush! Just a legit question. I just read an email from a friend, who knows WAY more about this stuff than I do and is way more conservative than I am, and she puts a lot of blame on President Bush and his administration.

What do you think?

I think Congress is the problem. They are the ones who wouldn't let us drill for our own oil. The whole Freddie/Fannie mortgage credit thing was their problem also. The president can only suggest legislation. It's up to Congress to pass it.

I'm curious as to when these industries were deregulated.

I can't put the blame solely on Bush for this, but I do think he's had his head in the sand a bit re: the economy. Every State of the Union address he's said the economy is solid, while talk of this meltdown has been going on for years in the financial news...

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I was told (guess we each hear from our own sides huh? ) that much of the Fannie Mae & Freddie Mac crisis started with Bill Clinton. I don't know if this is true, just what someone told me. They said that he started the ball rolling on those agencies providing loans to individuals with poor credit and low or no down payments. That the thought was to help people get into homes that might not otherwise be able to, but that the result is that all these mortgages are now defaulting because they probably shouldn't have been done in the first place. Perhaps someone else can find a reference to this.

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Billie was on the Today show this morning and they asked him about the bill he passed and if it was intended to give people with poor credit homes etc. he said it was not intended to do that and he said the bill was intended so that Bank of America could buy out Merrill Lynch, that type of transaction. So, it sounds like he did pass that bill but then again did the Bush administration, or republican controlled Congress or democrate controlled Congress ever amend it? No. The problem is that owning a house is a privilege and not a right and the banks didn't care who owned a home because the government would bail them out...and they are getting bailed out. Doing anything shady is great when you make money, but once you start losing money then you start blaming others and acting innocent.

Yes, the Fannie/Freddie problems did originate in the Clinton administration.

Andrew Cuomo and Fannie and Freddie - News - Village Voicepage 1 - Village Voice


Congress has shot down numerous attempts to curb the problems with Fannie/Freddie. They were all shot down by Democrat opposition. This article from 2005 mentions some of the attempts to correct the problems and how they were opposed by some in Congress:

AEI - Short Publications - Regulating Fannie Mae and Freddie Mac

Two exerpts from the article:


Congressman Richard Baker (R-La.) has been concerned about the risks created by Fannie and Freddie since 2000, when he first introduced legislation to augment the powers of their regulator. However, the alignment of the political stars was so unfavorable at the time that Baker--then the chairman of the House subcommittee that had jurisdiction over the GSEs--could not find sufficient support for his bill to bring it to formal consideration and possible amendment by the subcommittee (what is known as "mark-up"). Successive bills in 2002 and 2003 met similar fates, although the threat of legislation brought Fannie and Freddie to agree to modest changes in their financial procedures and voluntary registration of their equity securities under the Securities Exchange Act of 1934.



If Congress cannot take this essential step, however, no amount of additional authority--given to a purported "world class regulator"--will significantly change the course of events. Fannie and Freddie will continue to grow, and one day--as Alan Greenspan has predicted--there will be a massive default with huge losses to the taxpayers and systemic effects on the economy. We should be grateful that Congress finally has before it a serious proposal that is equal to the seriousness of the problem. But we should also worry about whether Congress can find within itself the political will necessary to see the task through to its logical conclusion.


So, yeah, I do blame Congress!

Yes, the Fannie Mae/Freddie Mac stuff started in the late 90s so you can't blame that one on Bush. While Bush has not been the most forward thinking president and has had his head in the sand a bit, I do not think this is all his fault. I think it was a little bit of everybody's fault, but the greed started (if it ever really was not there) during Clinton's administration. I think his intentions were good, but the way he went about it was dangerous to our future, as we are seeing now. One of the reasons I think he is a hugely overrated president. JMO

And, Congress is the ultimate one who passes the law. The president only has veto power so a lot of the problem rests with them.

So then it goes back to the Clinton administration, but when Congress was controlled by the republicans. And then Congress couldn't get it changed in the early 2000's, due to democrats, even though the congress was still controlled by the republicans? That doesn't seem entirely logical.

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Thanks bonnotsm9...you're proving to have a lot of facts at your hands which I always enjoy & appreciate. I did go do some reading on the internet after I posted my response as I don't like to give false info, and I did find many references to the practice of providing high risk loans to people being really pushed by Clinton in the late 90's and then I also read quite a bit about the 2005 proposal where they wanted to try to stop all the problems they could see at that time. The article I read said all the republicans voted for tightening the reins and all the democrats voted against it (I guess that help explain that chart we saw a wk or so ago about how much democrats were getting from Freddie Mac & Fannie Mae and why the discrepancy....guess we know now!!)

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Here's another article that explains how Greenspan warned of a coming crisis and how reform was blocked by the democratic senators.

Hot Air » Blog Archive » Who’s to blame for the financial crisis — and why does that matter?

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