It has been a tumultuous two weeks. Let’s review. As a result of poor lending practices in the home mortgage market and particularly egregious practices at mortgage giants Fannie Mae and Freddie Mac, non-performing loans have served to dry up lending capital.
This lack of capital is putting the squeeze on individuals and businesses that need ready, affordable access to credit in order to buy cars, houses, inventory and to cover payrolls.
In order to address this problem, the president and the secretary of the Treasury informed us that we need to commit $700 billion of our money to the purchase of impaired assets held by lenders in order to re-inject liquidity into the credit markets. Failure to do so, they and others say, will result in a credit squeeze that will have disastrous consequences for the American economy and for the worldwide economy.
Leaders of the House from both parties worked all last weekend on a House Resolution that sought to appropriate the $700 billion. Calls from constituents to members of Congress were reported to be running overwhelmingly against passage of the bill. Democrat members that are facing tough re-election fights were given tacit permission by the house speaker to vote “no.”
Earlier this week, the measure failed in the House by a narrow margin.
The recriminations began immediately.
Here is house speaker Nancy Pelosi.
If you want to be critical of the administration, by all means go for it. But your criticism has to be intellectually honest, which means it has to be supported by the facts. And the facts don’t support the speaker’s allegation. And either Nancy Pelosi doesn’t know that she’s wrong on the facts, which in light of her leadership role is unacceptable. Or she knows that what she said is wrong but said it anyway in the belief that she won’t be called out. That’s unforgivable.
Madame Speaker: in late 2004, Freddie Mac had to admit to accounting irregularities and make a dramatic restatement of earnings. (By the way, the amount of money now in question makes Enron look like lost lunch money.) The Republicans were in the majority then and, with the full knowledge and concurrence of the president, hearings were held. Here’s part of what sub-committee chairman Richard Baker, and committee member Ed Royce, both Republicans, said.
The Democrats on the committee were having none of it. As just one example of many, here is Maxine Waters, Democrat of California.
The Republicans were not equivocal. Here again is Ed Royce.
And finally, here is Connecticut Republican Christopher Shays, asking the question that surely deserves an answer now.
A more complete YouTube montage of the hearings follows below.
If you’re just finding out about this by listening to me, you should be outraged. Fannie and Freddie are at the root of a serious financial crisis that threatens our very way of life and Democrats were active in their efforts four years ago to thwart the efforts of the Republican majority to address a growing problem.
Nancy Pelosi said what she said this week more or less unchallenged. Have you seen a story on ABC World News with Charles Gibson or the CBS Evening News with Katie Couric or the NBC Nightly News with Brian Williams?
If the roles were reversed, with this kind of easily obtained background material, do you think the Republicans could have kept a devastating story off the front page of the New York Times?
The founding fathers gave the press very broad protections in order that they would be free to expose government conduct just like this.
So where are you guys? Why haven’t you jumped on this story? Why are you letting Nancy Pelosi say what she says with no examination and no challenge?
If you want to know why circulation is down and TV news ratings are down, examine your conduct on just this one vitally important story.
You’re losing us, and by extension we are losing the valuable role you play, because we can no longer trust you to do your job.