Three Opinions on Fannie Mae and Freddie Mac

Three Opinions on Fannie Mae and Freddie Mac

October 8, 2008 2 Comments

John Rutledge


  1. vince flaherty

    October 10, 2008

    People have become so hung up pointing the finger at each other, the political parties, the speculators, the people who got liars loans and the predatory lenders, that they have got many of us thinking that the world’s financial problems were started by contagion from the “sub-prime crisis”.

    But no one is taking responsibility. We’ve lost sight of what we knew in our hearts, that the misnomered sub-prime crisis scenario doesn’t adequately explain away what’s going on. There’s more blame to put on Democratic legislators, for instance, for blocking regulation of the GSEs and having exacerbated the mess, but I think that's because Democrats have the majority of legislators in the Senate and the House. These days, if a majority party doesn’t materialize to enact legislation in favor of the banks, pharmaceutical or insurance companies and such, then you can bet that politicians from the other party will be changing their votes to make it happen.

    In my view, partisan finger pointing about who did or didn’t vote for what, even if it’s correct, looks like passing the buck, even though it may not be meant to be, and it distracts everyone from the roots of the problem we must confront. Bills have so much stuff in them that offtimes legislators can’t vote yes on a bill they want, because at the same time they would approve something they’re against.

    It’s not the Democrats or the Republicans. It’s corporations, and the mortgage perks and campaign contributions that controlled Congress when our legislators could have averted this mess. That, and the fact that when legislators retire from office they are taken care of by those same corporations.

    And we can follow the money trail at:

    Look at the Chairman of the Federal Reserve, who as you know is is always picked by the president from a list of three supplied by the banks. He gets away, under the flag of fighting inflation, with raising interest rates 11 times in 2007… eleven times, even as the secondary market was choking on the “Triple A” rated paper that was being regurgitated back upon its originators because it really wasn’t “Triple A” and had 15 and 20% delinquency rates from the moment investors around the world purchased it from American brokerages.

    All the Federal Reserve and the banks who control it had to do, in order to preserve the medium and lower taxpayer’s ability to make their mortgage payments, and thereby avoid this crisis, was to lower interest rates. And that wouldn’t have cost the government or the taxpayer anything.

    Turning to a related subject, I want to tell everybody my life story starting from when I was about 10. Ha ha. I wanted a hit record, and I began writing songs with friends. Especially when I got a little older and saw a duo named Jan and Arnie do it. I thought their tune Jennie Lee that they cut in Jan’s garage was really avant garde. It was beyond the rhythm and blues or the Brooklyn rock and roll harmony that came before it, and they were from right here in West Los Angeles.

    I was a kid in grade school when Jan became a teenager and had hit records, and I wanted to be like him. But like his first partner Arnie, I could see there were other things, like becoming a senator for instance, where you could be more useful to people. That seemed to be a more fulfilling goal. But you had to be rich to get elected, so I was out.

    By the time I got to be 18, I was under the gun to decide what to do in life, and I remembered Senator George Murphy, who started out with nothing but made enough as a hoofer and actor to get the ball rolling. Now my pop always told me, “Vincie, if you want to be successful, pick one thing, and stick to it.”

    So naturally I disregarded his advice and followed a plan to do everything. I’d do it all. I’d write music and movies, I’d produce, I’d take a shot at being a rock star, and an actor. I even landed the best agent, which was no small feat because they only had 5 leading men and that included Ryan O’Neal and Steve McQueen the number one box office draw. And when McQueen died, Ryan became number one.

    Up until now I’ve had a little success, but I never made enough money at anything to enable the political phase of my long shot plan. You could say I am a failure. But I haven’t stopped trying. If I were fortunate enough to be elected in the future to public office, here’s what I’d do:

    1) I’d lie and vote on things that I don’t like, just like all the rest of them.
    2) I’d do everything else I have to do to stay in office, just so I can hang in there long enough to get the few things done that I promise you I will follow through with.
    3) I’d find alternative arrangements to confront and diffuse the incredible conflicts of interest under which our system at every level has enslaved all of us.
    4) I promise to do everything I can to provide a more level playing field, between corporations and small business, and from the legislative to the judicial systems.
    5) I’d encourage the U.S and Central Banks back stop interbank lending in order to restore sorely needed confidence and reign in the runaway Libor to which most adjustable mortgage instruments are tied. Why hasn't that been done?
    6) And now here cometh the fear mongering we have all grown to know and love: If these kinds of changes aren’t made, we are headed into further disillusionment and crushing of the human spirit. People will think it’s smart to become even less ethical in their dealings with others, and this current crisis will repeat itself. And when nations distrust one another and trade across borders becomes disrupted, then armies are not long to cross them.

    Here’s something else I thought of a year ago that I’d fight for:

    Instead of rushing in to burn the medium to lower end taxpayers for 700 billion to prop up the lifestyles of corporate folks, what we should have done first, and I say first because I believe it was a mistake for us to abandon Bear Stearns and Lehman Brothers, is to find a way to make whole the investors around the world that our corporations damaged with these bogus AAA pools of mortgages in the first place.

    We don’t have to admit fault, because it’s not our nation that is at fault, it’s corporations that bullied our government into it. We simply need to show our economic partners that we have the character to stand behind the things we export. Even bad loans.

    Last year I registered to run for a Republican seat in the 31st District here in West Los Angeles. Not because I’m a Republican or a Democrat, but because that’s where I felt I had the best shot. I paid the fee, but in December they told me somebody dropped the ball and it was too late to be on the ballot. Unbelievable isn’t it.

    If I’d had known how things were going to be right now, I would have made a bigger deal about it then. But I didn’t think I had much chance, not being rich, and there are plenty of other guys out there who could do as good or better a job.

    It just seems as though there aren’t enough of them in Washington D.C.

  2. vince flaherty

    October 13, 2008

    Correction: I mistakenly mentioned
    I meant to say

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