Despite Claims Today He Warned of this Crisis, McCain in 2007 Said He Didn't See This Crisis Coming

since McCains major experience in finacial collapes came as a defemdant and participant in the Keating 5 scandals-who more experienced than he to recognise greed and corruption. Yes mr McCain has more experience than obama in this area-that of a DEFENDANT

This financial mess is the fault of BOTH parties. And yes, both candidates have people in their campaigns that are perhaps "questionable". Also the solution to solving this economical crisis is NOT a simple thing. I have yet to see two economists agree as what should be done. This next election I will vote for the ticket that I believe will have the BEST interests of this nation at heart, and who will govern with the interests of the American citizen in mind. It is imperative that the ticket not only can, but is willing to reach across the hall and work on things that will make this country better, stronger and safer. The grid-lock in Congress HAS to stop. "Business as usual" is going to be the downfall of this nation, and do not make the mistake thinking that this great nation cannot fall!

Congressman Ron Paul
U.S. House of Representatives
July 16, 2002

Mr. Speaker, I rise to introduce the Free Housing Market Enhancement Act. This legislation restores a free market in housing by repealing special privileges for housing-related government sponsored enterprises (GSEs). These entities are the Federal National Mortgage Association (Fannie), the Federal Home Loan Mortgage Corporation (Freddie), and the National Home Loan Bank Board (HLBB). According to the Congressional Budget Office, the housing-related GSEs received $13.6 billion worth of indirect federal subsidies in fiscal year 2000 alone.

One of the major government privileges granted these GSEs is a line of credit to the United States Treasury. According to some estimates, the line of credit may be worth over $2 billion. This explicit promise by the Treasury to bail out these GSEs in times of economic difficulty helps them attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a massive unconstitutional and immoral income transfer from working Americans to holders of GSE debt.

The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase the debt of housing-related GSEs. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors.

Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges of Fannie, Freddie, and HLBB have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.

However, despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policies of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.

Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.

No less an authority than Federal Reserve Chairman Alan Greenspan has expressed concern that government subsidies provided to the GSEs make investors underestimate the risk of investing in Fannie Mae and Freddie Mac.

Mr. Speaker, it is time for Congress to act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors misled by foolish government interference in the market. I therefore hope my colleagues will stand up for American taxpayers and investors by cosponsoring the Free Housing Market Enhancement Act.

McCain came out years ago as stated plainly in his 2005 push for oversight
to fix this problem,the fact that he could not foresee every problem that might come from this does not diminish the fact he tried to act only to have the democrats block his actions and President Bush's.

Bush did try to increase oversight on Fannie Mae/Freddie Mac:
NYtimes reported this 5 yrs. ago:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending.

However, what many do not recall is that Bush wanted to tighten oversight with a new regulatory board for Fannie Mae, Freddie Mac, and other government recipients for the express purpose of addressing bad loan practices — and Democrats blocked it.

Look what the democrats had to say about it:
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Typical democrats,create the problem then blame others when the sh!t hits the
fan.

Obama is up to his neck in the corruption that has allowed this to happen,where are those front page headlines:

The Best Congress Fannie Could Buy
(from classicvalues)
This is a long and complicated story about how Obama backers were behind the mortgage industry meltdown.

Obama's ties to ACORN
Penny Pritzker
James a "Jim" Johnson

for starters these two were running the
show for one of the biggest bailouts the
country has had to make and they are top
financial advisors for Obama.They also have brought in hundreds of thousands of dollars to their pockets for their protection of the corrupt Fannie/Freddie
fiasco.

Now Obama wants to act like he is Robin
Hood when he was one of the leading actors in this rape of the tax payers.

"Why yes. Mr. ∅ was outraged. The very people who helped to rip off the American people were taking millions from the taxpayers while ∅ was helping the thieves get away with trillions. I'm outraged. At the theater. What a great act. And he seems so sincere."

I guess the great one will see no investigation,it would get in the way of
the activist media and their cheer leading support to get him elected.

Obviously, McCain did anticipate the Fannie Mae/Freddie Mac crisis. His remarks about the "FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005" demonstrate that conclusively.

Equally obviously, the subprime mortgage crisis that he didn't anticipate extends well beyond the FMs.

There is no contradiction here.

Bush is the reason nothing came of any bill that would have prevented this current crisis. Think what you like, but I blame Bush for being completely owned by big business and being stubborn and hardheaded about allowing any bill or measure that Democrats attempted to put forth. Bush has done nothing to prevent this situation and he won't.

McCain said last year he didn't "know" the situation would get "completely out of hand."

That's different from not warning of credit industry problems and actually offering legislation to prevent a crisis, as he did in 2005.

Did Obama offer legislation to restrain and correct Fannie Mae and Freddie Mac?

cs - yes, they need to hear more commonsense, keep it up. cs means commomsense for you uninformed!

robotworld - you really are from outerspace, mckinney and the other's, lol! McCain could'nt answer because everybody else plus McCain could'nt understand that futuristic space language coming from ron paul. he was just another ross perot, crazy! lol!

The headline is obviously meant to imply that the claim is less than factual. The explanation is a bit weak: "Again, people hear the word "claim" and assume I'm implying something that the word "claim" does not mean. (It means to assert as fact. It does not mean to FALSELY assert as fact." Although it doesn't explicitly mean falsely, it does imply that that there may be an opposing view. No one would ever say "Despite claims that John McCain is a Republican".

And if Tapper googled a little harder he would see that McCain's not making a "claim" — he really did anticpate the problems with GSEs and see them as a systemic financial problem. He even sponsored legislation to deal with it:
"
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole. "

This legislation was stonewalled by Chris Dodd, Barney Frank, and Nancy Pelosi all on the dole from Fannie and Freddie.

joe - what about biden's 30 plus year's, and he did nothing, hmm?

Ron Paul warned of this disaster 5 YEARS ago. McSane doesn't know his arse from his elbow...he's going to talk like he knows anything about Economics. He couldn't even answer an economic question from Ron Paul during a primary debate.

What an ASS? Vote McBama...we're McScrewed.

VOTE 3rd Party. Cynthia McKinney, Ralph Nader, Chuck Baldwin, Bob Barr ANYONE but McBama.

Ron Paul warned of this disaster 5 YEARS ago. McSane doesn't know his arse from his elbow...he's going to talk like he knows anything about Economics. He couldn't even answer an economic question from Ron Paul during a primary debate.

What an ASS? Vote McBama...we're McScrewed.

VOTE 3rd Party. Cynthia McKinney, Ralph Nader, Chuck Baldwin, Bob Barr ANYONE but McBama.

No doubt that earlier statement re: need for more deregulation uttered by John McCain is his real point of view. He must thinks we are all too dumb to realize he and his buddies are the very ones who entered us into the era of Unfettered Greed. This guy is clueless and a greater illustration that they are clueless could not be more perfect than this meltdown after he and his buddies push extreme deregulation. Welcome to the recession everyone, courtesy of this administration that pushed deregulation beyond acceptable boundaries.

McCain did forewarn about the potential negative impact of practices at Fannie Mae and Freddie Mac. I give him that. But, after 20 something years in the Senate I would expect McCain to have made some accurate predictions; not that he ever did much about it mind you. However, it is his overall record (e.g., war and deregulation policies to say the least) that are at issue.

ryan c - keating 5, investigated, no charges! affair with another woman while married, i don't need to get into personal marital matter, thats to judgemental especially when his ex had an affair too. happen's alot with military families!

"unlike Senator Obama, did not receive campaign contributions from them. "

While Obama has taken in roughly $120K from employees of Fannie Mae & Freddie Mac, McCain has accepted contributions from them as well(around $15K).

Why do right wingers take a perfectly good line of attack and lie about it?

Is it stupidity? Is it a need for there the issue to black and white?

"The question is whether he had the foresight to propose increased regulation. He did. Obama, Pelosi and Frank did not"

John,

McCain did not propose the legislation. He cosponsored it.

Obama authored the STOP Fraud Act in 2006 and again intro'd it in 2007.

Nothing came of either bill by either candidate.

McCain is a capitalist? What do you call it when taxpayers bail out failing companies like AIG, Bear Stearns, or Lehman? You nitwits have it backwards. McCain and his Republican pals want it both ways. The like private enterprise, so they can privatize the PROFITS. But they LOVE socialism because they can socialize (i.e., foist on taxpayers) the LOSSES. In the meantime, families lose their homes, their pensions, and sometimes their savings. And to add insult to injury, the executives get multi-million dollar severance packages. To support this Republican bullcrap you have to either be in the top .5 percent of all U.S. earners or you're an idiot.