for previously archived news article
pages, visit the news archive page (click on the button above)
the clown will not go west with cap in hand to the imf - he’ll go east instead to ask for imf money!
Gordon Brown the Clown failed for ten years to fix the
UK energy sector. Now he’s off to the Middle East with the begging
bowl.
This is the invariable result of socialism.
“British Prime Minister Gordon Brown is heading to the oil-rich
Middle East to try to bolster the international funding pot available
to countries struggling amid the global credit crisis.
“Brown is pushing for Middle Eastern countries to be among the
biggest donors to an expanded International Monetary Fund, but analysts
warn money will only be forthcoming if regional leaders get more power
in any new world economic order. He begins a four-day trip Saturday.”
—
“Brown and European Commission President Jose Manuel Barroso this
week called on the Gulf states - along with China - to do more to help
the IMF amid fears that its $250 billion in reserves will not be enough
for future bailouts.” [Quoted from ap.google.com]
Having buried the UK economy under a mountain of debt,
the Clown and the fake-Lib-Dems believe they can borrow their way out
of the mess.
It is always amazing that socialists, whenever something
doesn’t work, want to spend more on that thing! In this case, still
more debt.
“ Gordon Brown told the Labour Party conference in 1997 that
"we have learned from past mistakes - you cannot spend your way
out of recession." [Quoted from conservatives.com] [This from long speech by George Osborne. It
is not marvellous. He does not understand Keynes
well.]
Here is former Chancellor, Norman Lamont talking
more sense:
“Keynes supported deficit financing as an answer to a depression
in which the economy was no longer self-correcting and interest rates
were ineffective....
“There is an understandable fear that this slowdown is different
from previous ones. It is. We have had the most serious banking crisis
since the 1930s. But the key difference between now and the 1930s is
that, this time, the banks, wisely and correctly, have not been allowed
to fail. Liquidity has been lent to banks on a massive scale. Few people
are forecasting that we will face 20 per cent unemployment as in the
1930s.
“So do we really need a full-blown , public works "Keynesian"
solution? It is an approach with great dangers.” [Quoted from
telegraph.co.uk]
The UK stock market is now down 45%, and the pound
worth over 25% less against the $ and over 15% less against the euro.
And what is Brown the Clown’s wizard solution?
More taxes and more government spending, of course.
Even his treasury puppet, Darling, is admitting that the much vaunted
“fiscal rules” of prudence, of limited government borrowing
and sending, has been abandoned.
But the Clown has only one solution to every question - more
socialism!
The drop in advanced economy stock markets, during this bear
squeeze, varies around 40%.
Thus, the real drop in the UK markets is greater in international terms than
those of competing economies.
The real drop in the UK stock market so far is 70% against
the 40% drop the USA.
The real drop in the UK stock market so far is 60% against Europe’s
drop.
The real drop in the UK stock market so far is 85% against Japan’s
drop.
The Clown is a liar:
“The UK is only in a recession because global growth is slowing.”
[said by Gordon Brown]
“The answer is to prevent the cost of oil to the consumer from
declining any further. Let consumers pocket and benefit from the decline
to US$65. Then impose a stand-by excise tax on any further declines.
If oil goes to US$64, the government taxes $1. If the decline continues
to $63, $2. And so on.
“Consumers will continue to substitute away from oil. Manufacturers
will be induced to continue investing in efficiency. Homebuilders will
continue to shift to smaller, more centrally located development. Revenues
to the governments of producing nations will be squeezed. Revenues to
the governments of consuming nations will rise -- and those governments
should use the new tax to cut other taxes, especially taxes on work,
saving and investment. I'd nominate the corporate income tax as the
first tax to cut --and ideally eliminate.”
“I'm a believer in knowing what you're doing when you're
applying for a job, and I think that if I were to seriously consider
running on a national ticket, I would have to start now before having
served a day in the senate. Now, there are some people who might be
comfortable doing that, but I'm not one of those people.”
[Barak Obama, 2004]
what the extreme left like murtha and obarmy really think about the poor
Obama:
“small-town Americans cling to guns and religion and xenophobia
out of bitterness over lost jobs”
Murtha:
“There is no question that western Pennsylvania is a racist
area.” Then he tried to squirm out of it, only to dig
himself further in:
“This whole area, years ago, was really redneck.”
Then there’s that tribune of the common people,
Biden.
Biden:
“I mean, you got the first mainstream African-American who is
articulate and bright and clean and a nice-looking guy. I mean, that's
a storybook, man.”
“ You cannot go to a 7-11 or a Dunkin' Donuts unless you have
a slight Indian accent. ... I'm not joking.”
“ I don't know how many Joe the plumbers in my neighborhood that
make $250,000 a year and are worried.”
Anyone who believes anything in the
leftist media is one idiot!
“The so-called Brown plan was in fact the result of coordinated
efforts between the U.K. Treasury, or Finance Ministry, the independent
Bank of England and the Financial Services Authority watchdog, according
to several sources familiar with the matter and a spokesman for the
FSA itself. The discussions took place over the course of many weeks,
even "months," according to one source.
“Even within this supposedly harmonious trinity, one source suggested
that the Bank of England played a particularly significant role. But
you won't catch the central bank governor, Mervyn King, getting any
praise for his as yet unconfirmed involvement in the bailout package
preparations.”
Incidentally, this is what I wrote elsewhere a week or so ago,
that this is just Brown the Clown doing what he’s told to by the Bank of England,
and him following the approach of Cameron and the Conservative Party.
I particularly liked the final paragraph:
“And where is Finance Minister Alistair Darling in all of this?
He bore the brunt of the British press's barbs when the plan was first
unveiled, with critics slamming the government's ballooning balance
sheet and the moral hazard of bailing out the financial sector. But
now that the plaudits have come raining in from across the globe, from
American economist Paul Krugman to French newspaper Le Monde, Brown
seems more prepared to step in and claim the spotlight.”
Le Monde is, of course, a leftist rag
in a France dominated by the right, and Krugman is a leftist shill in
a USA with Bush as president.
The ubiquitous nature of leftist lies is should be
a lesson to any awake person.
This is Bush before any of the lies of the Brown Clown:
24 September 2008 - from
George Bush’s statement:
“Second, as markets have lost confidence in mortgage-backed securities,
their prices have dropped sharply. Yet the value of many of these assets
will likely be higher than their current price, because the vast majority
of Americans will ultimately pay off their mortgages. The government
is the one institution with the patience and resources to buy these
assets at their current low prices and hold them until markets return
to normal. And when that happens, money will flow back to the Treasury
as these assets are sold. And we expect that much, if not all, of the
tax dollars we invest will be paid back.
Paulson presented his outline plan on 18 September
20058.
Brown and the Euro-leaders’ plans were announced
on about more like 13th October, most of a month after the Bush statement/s.
Biden: “Obama will likely be tested by an international crisis
early in his administration if he is elected.” Quoted from thehill.com]
Biden repeating that Obama is not ready:
0.32 min
Biden: “I would be honoured to run with or against McCain. I
think the country would be better off.”
Biden: “But Barack Obama indicated to me he wanted me with him
to help him govern. So every major decision he'll be making, I'll be
sitting in the room to give my best advice.” [Quoted from bigpicweblog.com]
"President Clinton said that Obama is not ready to be president
because he does not have enough experience - Obama would "roll
the dice" during the presidency.” [Quoted from unimike.net]
In an attempt to calm fears of a new cold war, one of Moscow’s
most powerful figures has said that Russia will not attack any of its
neighbours and has no claim over any of the states it lost after the
collapse of the Soviet Union.
“Sergei Ivanov, deputy to Vladimir Putin, the prime minister, promised
that Russia’s intentions were entirely peaceful despite its invasion
of Georgia. Moscow officials insist that its military operations in
August were provoked by Georgian aggression.
“ "We are not aggressive," Ivanov said in an interview.
"We have recognised the territorial integrity of all former Soviet
republics. That was in 1991. Russia, of course, has no territorial ambitions
regarding any former Soviet countries.”
Etc.
For those interested in the minutiae (pricing details not
guaranteed) there are reports that Russia needs around $70 a barrel before
they make a profit. Whereas I saw a Middle East statement that Saudi (and
thus much of the Middle East can profit from around $15-20 a barrel).
Russia has serious geo-political problems: a huge land area,
with both rivals and enemies to the south, along with a shrinking population. Thus
Russia, for all its macho posturing, needs the West far more than the West needs Russia.
Marginal tax rates:
When a person receives food stamps and other state help, they do not pay
tax. However, if they also work, this may raise their gross income (their
adjusted gross income) to above the next tax level. At that point, these
poorer people may find themselves liable to pay tax at a level that is
diproportionate to their income level, leaving little or nothing extra after
their taxes are paid.
Worse, their dole benefits start being withdrawn, thus adding to
their effective marginal tax rates, which can thereby
rise dangerously. In Europe, this has led to heavy unemployment, as work becomes
disincentivised. A poor worker, with an already low wage, ends up working in real
terms for far below the minimum wage. Thus, the penalty for working is too great and these
people prefer not to work, thus does socialism destroy the work ethic. Marginal workers
are said to be in a poverty trap.
The current marginal tax percentages are shown by the purple
area above. The proposed Obama tax regime is shown by the red line. Although
Obama’s regime does take wealth from at least some wealthy people, it hits
the poor even harder.
“Mr. Obama is proposing to create or expand no fewer than seven
[tax] credits for individuals:
“1. A $500 tax credit ($1,000 a couple) to "make work pay"
that phases out at income of $75,000 for individuals and $150,000 per
couple.
2. A $4,000 tax credit for college tuition.
3. A 10% mortgage interest tax credit (on top of the existing mortgage
interest deduction and other housing subsidies).
4. A "savings" tax credit of 50% up to $1,000.
5. An expansion of the earned-income tax credit that would allow single
workers to receive as much as $555 a year, up from $175 now, and give
these workers up to $1,110 if they are paying child support.
6. A child care credit of 50% up to $6,000 of expenses a year.
7. A "clean car" tax credit of up to $7,000 on the purchase
of certain vehicles.
“Here's the political catch. All but the clean car credit would
be "refundable," which is Washington-speak for the fact that
you can receive these checks even if you have no income-tax liability.
In other words, they are an income transfer -- a federal check -- from
taxpayers to nontaxpayers.” [Quoted from taxprof.typepad.com]
This looks like the standard income trap that keeps
so many in Europe out of work and encourages dole scrounging.
Obama is also proposing increases in capital gains tax, in the
pretence that it only effects ‘the rich’. This is yet another Obama lie, as
it will undermine the pensions of the third of Americans, saving with 401Ks.
As usual with socialists, Obama is proffering all manner of bribes to
the poor (out of other people’s money) by offering handouts which will eventually
rebound to the disadvantage of the poor and to American society.
Obama’s tax lies include the pretence
that he can spend a $trillion (and the ‘promises’ grow by
the week!) in extra taxes without taxing!
In the end, all taxes come out of production,
and then feed through to prices, and thence undermine national competitiveness, and thus wealth.
why is obarmy looking rattled? can he buy the presidency?
Like some of McCain’s Republican rivals, Obama
is spending 3 or 4 times as much as McCain.
McCain won the nomination.
Can Obama buy the presidency?
Obama is offering to steal from the productive and
give to the unproductive. That is, he’s trying to buy votes from
the impecunious and incompetent.
“A democracy cannot exist as
a permanent form of government. It can only exist until the voters discover
that they can vote themselves largesse from the public treasury. From
that moment on, the majority always votes for the candidates promising
the most benefits from the public treasury with the result that a democracy
always collapses over loose fiscal policy, always followed by a dictatorship.
The average age of the world's greatest civilizations has been 200 years.”
[1]
Well, can Obama buy the presidency?
Obama keeps lying about a tax cut for 95% of Americans,
but 40% do not pay tax. What Obama is, in fact, offering is paying out
to people who do not pay tax. However, I am not clear on the details,
I do not know whether he is being transparent.
It has been obvious to me since Obama started making
this daft claim, that he is lying again.
All tax is tax. All tax comes out of production. It
matters very little under what disguise a tax is presented. All tax means
that the cost of production rises and, therefore, prices rise.
The reality is Obama is proposing to raise more taxes,
some say a $trillion or more.
This is the way socialists attempt to build their client
states.
or can he bully his way to the presidency?
3:14 mins
Joe the Plumber, whom Obama approached during a rally
‘walkabout’, has publicly destablised Obama’s mantra
that 95% of Americans will be better off. Now both the fossil media and
the blogosphere are doing their best to discredit and intimidate Joe the
Plumber, prying into his bank accounts and tax payments, as well as (in
the case of the fossil media) sieging Joe’s house with broadcast
vans.
misrepresentation in the telegraph re cameron’s position on recovering from clown’s financial mismanagement
The following statement is clearly both false and misleading:
“He appears to have the Conservatives on the run, too. Having
promised a bipartisan approach in the national interest, the Tories
are starting to suspect the deal will not be popular with the nation.
They are studying it closely and considering sheering away from their
original position to instead "stick up for the taxpayer",
as an aide put it. That - defending the taxpayer - is a novel idea,
one that has not yet caught on in modern Britain.” [Quoted from
telegraph.co.uk]
This misrepresentation is repeated by Newsnight on 17 October 2008.
In fact, David Cameron (at the Conservative Party conference)
most clearly stated his/tory support would be subject to safeguarding
the taxpayers:
“…We’ve got to get the policy response right, and
our principle is clear: we must protect the taxpayer where possible,
and stabilise the system where necessary. So I and this party stand
ready to help in whatever way is necessary, to help the Government to
do the right thing for the sake of our economy and for our future financial
security.
“We’ve got to get the policy response right, and our principle
is clear: we must protect the taxpayer where possible, and stabilise
the system where necessary. So I and this party stand ready to help
in whatever way is necessary, to help the Government to do the right
thing for the sake of our economy and for our future financial security.”
[Quoted from conservatives.com]
Of much concern to me is that I believe Obama to be
both an marxist extremist and highly dishonest.
Here
is Obama reporting on a relation’s view of Obama’s natural
grandfather:
“What your grandfather respected was strength [...] But he could
not understand such ideas as mercy towards your enemies, or that this
man Jesus could wash away a man’s sins. To your grandfather, this
was a foolish sentiment, something to comfort women. And so he converted
to Islam—he thought its practices conformed more closely to his
beliefs.” [p.407,
Dreams from my father, hbk]
And here is Obama on his Muslim stepfather:
“ "Your mother has a soft heart [he said] That’s
a good thing in a woman. But you will be a man someday, and a man needs
to have more sense." ”[p.39]
—
“I thought for a moment. "Why was the man killed? The one
you saw?"
“ "Because he was weak."
“ "That’s all?"
“Lolo shrugged and rolled his pant leg back down. “That’s
usually enough. Men take advantage of weakness in other men. They’re
just like countries in that way. The strong man takes the weak man’s
land. He makes the weak man work in his fields. If the weak man’s
woman is pretty, the strong man will take her." He paused to take
another sip of water, then asked, "Which would you rather be?"
“I didn’t answer, and Lolo squinted up to the
sky. "Better to be strong," he said finally, rising to his
feet. "If you can’t be strong, be clever and make peace with
someone who’s strong. But always better to be strong yourself.
Always." ” [pp. 40-41]
I am strongly inclined to believe these attitudes pervade
the behaviour of Obama. I have often heard expressed, in areas I have travelled,
notions that it is clever to lie; ideas that only a fool lets others
know what he is thinking. I think Obama embraces such attitudes.
I think that if his facial expressions are watched
closely, and then compared with his accompanying words, you can get hints
of such internal attitudes.
For instance, in
the Presidential
debate of 15 October 2008, Obama was seen grinning (smirking) and shaking
his head at McCain’s words. It would seem that Obama appeared pleased at some
arrogant self-regard, then slyly tried to cover up his response.
I do not believe lying is praiseworthy, even
though it can be effective with the naive and the stupid.
Perhaps Obama would suppose that I am naive or stupid, but then,
like so many socialists, Obama does have a disparaging attitude to anyone who does not buy
into his narrow and arid pseudo-intellectualism. This was also evidenced by his nonsense about those
lesser beings “who cling to guns and religion”.
some disturbing comparisons - the clown and the usa
George Bush asked for a line of credit
of $700 billion.
The Clown [Gordon Brown] is looking for going on a trillion dollars of
tax payers’ money to nationalise anything he can grab.
On these actions:
The Footsie [FTSE - UK stock exchange] drops 8%
The Dow [US stock exchange] drops 1.5%.
The USA economy is nearly 14 trillion dollars, Britain’s
is more like 2 trillion.
Why is the Clown trying to nationalise?
Why is he grabbing at a similar, or greater, amount than the USA, despite
having an economy one-sixth to one-seventh of the size?
Meanwhile, the pound has slipped about 20% against
the dollar, so far!
“Although some may feel like that, others do believe that an
October surprise is in the making for Obama. The website HillBuzz, for
instance, reported on Saturday that its information led it to believe
that Obama could potentially face charges.This sentiment seems a bit
far-fetched presently, but the Chicago Sun-Times explained in a column
that the way for prosecutors to get to Obama is through Alexi Giannoulias,
Illinois state treasurer. Giannoulias family runs banks which may have
questionable ties to Rezko and (potentially) organized crime. When Giannoulias
ran for office in 2003, Barack Obama suddenly endorsed him. This while
Giannoulias had never run for office before, nor had he ever voted.
The two were connected, however, through Tony Rezko and Giannoulias’
family (business). In other words, if Rezko started to talk about Giannoulias
and the family’s banks, it could be that investigators will end
up... at Obama.”
“Clusters of speed cameras that will monitor drivers’
average speed on all routes across a wide area are to be deployed on
hundreds of roads next year.
“It will be impossible to evade detection because the digital
cameras will cover every entry and exit point and, unlike the earlier
speed cameras, will never run out of film.
“Drivers who slow down briefly or who make a detour from the
main route will still be caught because up to 50 of the cameras will
work together in a network. They can be positioned more than 15 miles
apart and will automatically read numberplates and transmit data instantly
to a penalty processing centre.”
—
“The Association of British Drivers, which campaigns against speed
cameras, said that Specs3 could cause drivers to lose concentration.
Brian Gregory, a founder member, said: “People put the car in
cruise control and the mind in neutral. It’s so boring driving
through these sections at a constant slow speed that people are going
to drop off.” ”
Obarmish: That’s a distraction =
“I’m going to avoid that question.”
Obarmish: Irritable = “I object
to mccain pointing out that I’m lying.”
Obarmish: Desperate = “Insisting
that I answer a question.”
Obarmish: Unstable = “Telling
the truth.”
Obarmish: Truth = “Lie”
Obarmish: As I said = “What
I heard McCain say”, also
“What I heard Bush say”, also
“What I heard Paulson say”, etc.
Obarmish: Let me be very clear about this =
“I’ve flip-flopped so many times on this issue, I need a minute
to remember where I stand now.” [Contributed
by End.of.an.Error.012009]
Obarmish: Let me clarify what I meant by that statement =
“I accidentally told the embarrassing truth, so now I'm going
to try to fool you into thinking that I said the opposite of what I
actually said, in sure and certain knowledge that my sycophants in the
media will turn a blind eye to the deception.” [Contributed
by Occidental]
Obarmish: Erratic = “Don’t
be subtle beyond my empty sound bite.”
Obarmish: Educated = “Never done
a real job, no real-world experience.”
“British companies are being forced to pay over four times more
for their electricity this winter than competitors in France and in
excess of 70 per cent more than in Germany.”
—
“On Friday, the forward price of power for November reached more
than £130 per megawatt hour. In France, it was about €40
(£31) per megawatt hour, according to Spectron, a supplier of
energy market data. In Germany, the price stood at around €97 per
megawatt hour. ”
as
the election approaches, the obama campaign desperately tries to close
off leaks about the real obama
Corsi, who has written a highly
sourced book on Obama’s evasions, lies and attempts to cover
up his background, has been detained in Kenya, while he was there further
investigating Obama’s background.
Obama was most certainly raised a muslim for several
years of his childhood, and has expressed sympathy with Nation of Islam,
anti-semite, Farrakhan. As described in Who is Obama?, Obama has real links to…
Raila Odinga, the politician currently disputing elections in Kenya.
“[...] Raila Odinga has, in his own words, a "close personal
friendship" with Barrack Hussein Obama Junior.
“When Obama went to Kenya in August of 2006, he was hosted
by Raila and spoke in praise of him at rallies in Nairobi:”
[Quoted from atlasshrugs2000.typepad.com]
Also....
“The Evangelical Alliance of Kenya has posted on its website
a photograph copy of a Memorandum of Understanding, dated and signed
on August 29, 2007, between Raila Odinga and Shiekh Abdullah Abdi,
chairman of the National Muslim Leaders Forum of Kenya.
“It pledges the support of Kenyan Moslems for Raila's election.
In return, as President of Kenya, Raila agrees to 14 actions, listed
a) through n) on page two. Read them all, and be sure you're sitting
down. Here's a sample:
“b) Within 6 months re-write the Constitution of Kenya to
recognize Shariah as the only true law sanctioned by the Holy Quran
for Muslim declared regions.
“c) With immediate effect dismiss the Commissioner of Police
who has allowed himself to be used by heathens and Zionists to oppress
the Kenyan Muslim community.
“g) Within one year facilitate the establishment of a Shariah
court in every Kenyan divisional headquarters. [Note: everywhere in
Kenya, not just in "Muslim declared regions."] ”
Odinga and Obama both have roots in the Luo tribe.
Odinga has also claimed to be a first cousin
to Obama. As ever, Obama has denied that also.
But then Obama now has a long history of denying his
relationships!
The
Obama Nation: Leftist Politics and the Cult of Personality
by Jerome R. Corsi
According to US TV pundits, Biden made at least ten clear errors
of fact (if you are being generous with this description). The blogosphere is eagarly making lists of his lies, here is an example. He also contradicted
himself:
He and Obama will treat oppressive regimes
as illegitimate, Biden citing the intervention in Kosova -
“BIDEN: I think the American public has the stomach for success. My recommendations
on Bosnia. I admit I was the first one to recommend it. ”
(This is a position with which I fully agree - that is, the so-called Bush doctrine.)
“They saved tens of thousands of lives. And initially John McCain opposed it along with
a lot of other people. But the end result was it worked. Look what we
did in Bosnia. We took Serbs, Croats and Bosniaks [sic.], being told by everyone,
I was told by everyone that this would mean that they had been killing
each other for a thousand years, it would never work.
“There's a relatively stable government there now as in Kosovo.
With regard to Iraq, I indicated it would be a mistake to -- I gave
the president the power. I voted for the power because he said he
needed it not to go to war but to keep the United States, the UN in
line, to keep sanctions on Iraq and not let them be lifted.”
This is a lie. He voted to give Bush war powers.
“I, along with Dick Lugar, before we went to war, said if we were to
go to war without our allies, without the kind of support we need, we'd
be there for a decade and it'd cost us tens of billions of dollars.
John McCain said, no, it was going to be OK.
“I don't have the stomach for genocide when it comes to Darfur. We can
now impose a no-fly zone. It's within our capacity. We can lead NATO
if we're willing to take a hard stand. We can, I've been in those camps
in Chad. I've seen the suffering, thousands and tens of thousands have
died and are dying. We should rally the world to act and demonstrate
it by our own movement to provide the helicopters to get the 21,000
forces of the African Union in there now to stop this genocide.
In other words, he wishes to intervene.
He and Obama “reject the Bush
Doctrine of preemption and regime change and [will] replace it with
a doctrine of prevention and cooperation”. Heavens know what is the difference between
“preemption” and “prevention”.
Biden says will sit over Obama when he makes decisions,
and give him advice. “So every major decision he'll be making, I'll be sitting in the room to give my best advice.”
The regent and the young inexperienced prince.
It was also interesting to watch Biden start off over-confident and supercilious, and then gradually, throughout the debate, slowly turn a sickly green as he realised that things were not turning out the way he had fantasised. Maybe this is part of the reason he reverted to winging it and making things up as he went along.
Democrats strenuously resisted the change and
reform.
“Mr. President, I rise today to introduce, along with my colleagues
Senators SUNUNU and DOLE, the Federal Housing Enterprise Regulatory
Reform Act of 2005. This is needed regulatory reform at a critical time
for the Federal National Mortgage Association (Fannie Mae the Federal
Home Loan Mortgage Corporation, Freddie Mac, and the Federal Home Loan
Banks.
”There is no doubt that our housing government sponsored enterprises
GSEs, have been successful in carrying out their mission of providing
liquidity for the housing market. The market has remained strong through
tough economic times, and homeownership in this country is at an all-time
high.
“The housing GSEs, however, are uncommon institutions with a
unique set of responsibilities and stakeholders. Fannie and Freddie
are chartered by Congress, limited in scope, and are subject to Congressional
mandates, yet they are publicly traded companies with all the earnings
pressure that Wall Street demands. Additionally, Fannie and Freddie
enjoy an implicit guarantee by the Federal Government that has aided
them in developing substantial clout on Wall Street. With their influence
in the markets, their ability to raise capital at near-Treasury bill
rates, and their use of the most sophisticated portfolio management
tools, Fannie and Freddie today are no longer simply secondary market
facilitators for mortgages.
“The significance of Fannie Mae and Freddie Mac to our economy
cannot be overstated. Together, the companies own or guarantee roughly
45.6 percent of all mortgage loans in the United States. The companies
combined have issued over $3.9 trillion in obligations comprised of
$2.2 trillion in mortgage backed securities and $1.7 trillion of GSE
debt.
“It is clear that the recent revelations at both Freddie Mac
and Fannie Mae precipitate the need for Congress to address GSE regulatory
reform. In 2003, Freddie Mac found itself treading through a wave of
accounting problems and questionable management actions. That led to
an income restatement of $5 billion, a penalty of $125 million and the
removal of several members of its executive management. One year later,
a similar surge of questionable practices was discovered at Fannie Mae.
That led to the retirement and resignation of two of Fannie Mae's top
management officials, as well as last month's ruling by the Securities
and Exchange Commission, SEC, that Fannie could face a $9 billion income
restatement.
“At a minimum, the bar for a GSE should not be held lower than
it is for any other company. In fact, given its congressionally chartered
mission to serve a public interest, the bar should be held significantly
higher. The operations of such companies should be managed with uncompromising
integrity and unabridged transparency.
“Our legislation would create a new independent world class regulator
for Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Our bill
provides the new regulator with enhanced regulatory flexibility and
enforcement tools like those afforded to the Federal Deposit Insurance
Corporation, the Federal Reserve System, the Office of the Comptroller
of the Currency and the Office of Thrift Supervision. Furthermore, the
bill would:
“Provide the new regulator the authority of receivership to close
down a failing GSE and protect against a taxpayer bailout; provide the
new regulator greater discretion in raising capital standards to protect
against insolvency; provide the new regulator approval power over new
programs and activities proposed by a GSE; provide the regulator with
greater authority to limit exit compensation packages or golden parachutes
for executives removed for cause; require the annual audits of Fannie
Mae's and Freddie Mac's affordable housing programs to ensure that these
programs support the enterprises' affordable housing mission; end presidential
appointments to the board of directors of Fannie Mae and Freddie Mac,
and would require all Federal Home Loan Bank directors to be elected.
“This reform is important to restoring and maintaining the confidence
that investors and the markets require. In light of the recent problems
at Freddie Mac and Fannie Mae, it is even more important. I urge my
colleagues to support this reform effort and invite them to cosponsor
our bill.”
