Chuck Douglas: "Frankly, we know where the blame for the mortgage meltdown goes"
By CHUCK DOUGLAS, The New Hampshire Union Leader, Op-Ed, October 17, 2008
In a recent op-ed column here, Rep. Barney Frank, D-Mass., made it sound like the evil Republicans were behind this easy money housing crash that we are in. The reality is quite different.
In September 2003, when many were warning that Fannie Mae and Freddie Mac were leading us into the current mess, a hearing was held before the House Financial Services Committee. Barney Frank was the ranking Democrat on the committee at the time. He is now the chairman. What Barney actually said at the time was as follows:
On Sept. 10, he said, "The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see."
On Sept. 25, he said, "I do not want the same kind of focus on safety and soundness that we have in OCC (Office of the Comptroller of the Currency) and OTS (Office of Thrift Supervision). I want to roll the dice a little bit more in this situation towards subsidized housing. . . . I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists."
These are his words, not mine. The other piece of the financial puzzle comes from a report of the President's Working Group on Financial Markets, dated November 1999. You may locate it on the government Web site by its title, the Over-the-Counter Derivatives Markets and the Commodity Exchange Act. The report was sent by President Bill Clinton's treasury secretary, Lawrence Summers, as well as Chairman Arthur Levitt of the Securities and Exchange Commission, a Clinton appointee.
The legislation proposed by President Clinton's group was that the Commodity Exchange Act would exempt financial derivative trading. Thus, the $60 trillion worth of derivative instruments that are crashing the current market for credit were specifically urged to be unregulated. The report is available online for those who doubt what I am saying. It is 35 pages long.
The letter enclosing the report was dated Nov. 9, 1999, and was sent to the president of the Senate, Vice President Al Gore.
The exemption for these so-called "bilateral transactions" was set forth in 16 pages in the Federal Register on June 22, 2000, in Volume 65, No. 121. Thus, the groundwork was set for a massive deregulation of these mortgage-backed securities that are now so devastating to our credit markets. Remember, the change in law was signed by President Clinton, not by President Bush, at the end of 2000.
How clear was this future problem? Look to Sept. 30, 1999, when Steve Holmes wrote a piece in The New York Times that said the easy money pressure was on:
"Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton administration to expand mortgage loans among low- and moderate-income people and felt pressure from stockholders to maintain its phenomenal growth in profits."
Where could it lead, asked Holmes?
"In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s."
Finally, in that 1999 article titled "Fannie Mae Eases Credit to Aid Mortgage Lending," Holmes saw ahead to where we are now:
"If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry."
Others warned of the coming crisis years ago. Barney Frank and the Democrats said we should ignore the warnings and expand Fannie Mae's and Freddie Mac's adventures in risky home loans. Tomorrow, Frank will be the keynote speaker at the New Hampshire Democratic Party's Jefferson-Jackson Dinner in Manchester. That should tell you all you need to know about this party's commitment to fiscal responsibility.
Concord attorney Chuck Douglas is a former member of Congress from New Hampshire's 2nd District and a former state Supreme Court justice. He is vice chairman of Sen. John McCain's presidential campaign in New Hampshire.
Robert, lets review.
The current economic situation is almost entirely the result of bad loans.
Who forced banks to lend to people that were unqualified?
The Democrats via a Bill that was Written by a Dem Congress in 1977 and Signed by Jimmy Carter.
In 1999 Clinton made regulatory changes that increased the percentages of unqualified borrowers that Banks were forced to loan to.
Speaking of bad loans I wonder how many of these bad loans were made to Illegals who have now walked on the homes and debt they owe?
Throughout modern history the overwhelming majority of bad legislation that has been forced upon this country by Democrat led Legislatures and Executives.
In fact we're still dealing with the remnants of the disastrous programs that FDR/New Deal forced upon us as well as the fallout from LBJ/Great Society.
Big Gov Programs are the PROBLEM not the SOLUTION.
- JP, Warner
The blame for this crisis falls with all the greedy self absorbed people from the mortgage companies down to the consumers. I'm a single woman, work my proverbial tail off and know, no matter what some mortgage broker promises me, that I can't afford to own a home. I hear others say you can't blame people for wanting to live the "American Dream", I say "yes you can if it's beyond thier means. " Why can't peolpe be satisfied with having what they need and not always pursuing into the depths of bankruptcy and forclosure what they want! God Bless America
- Lee Hovestadt, MA.
Mr. Douglas, where was your party? You had control of the Executive and Legislative Branches for six of the last eight years. I agree with you, the Democrats set the stage for a lot of this in the 90's. However, the shadow banking system, the means for all this, grew exponentially over the last eight years.
Politicians look at these things through the prism of politics (Republican vs. Democrat, Right vs. Left). It's how they see the world. However, this mortgage/credit/financial crisis was a matter of greed on everyone's part (Wall Street, Main Street, Washington, foreign investors, etc.).
Politicians like yourself are great lagging indicators. We can always count on you to step forward after the fact. It's not until the credit expansion ends and the world begins to deleverage at warp speed that politicians of both parties come forward with finger pointing and "solutions".
- Mike, Milford
Both parties are at fault here. The republocrats and the demopublicans. They continue to point the finger at each other and the American people are asleep at the wheel while their 401K turns into a 101K and thier retirement dates moves further and futher away on the calendar...
Lets vote ALL of the crooks outof office and start over! But that will never happen with the mentality we are currently seing in this country. People are sick and tired of all the negative ads and media spin on everything, but rather than fight back, they've given up.
Ben Franklin is rolling over in his grave right now...
- Collin, Manchester
Ok, repeat after me; if anything goes wrong during a Republican administration it is the fault of the previous Democratic administration. If anything goes right during a Democratic administration the credit goes to the previous Republican administration. Got that? Good, that's a start.
Of course, we can't blame the Republican de-regulators who constantly preach that the market forces should be allowed to work their magic unhindered by any government oversight. We certainly can't look to Senator John "Keating 5" McCain who has been the champion of deregulation for the last 28 years.
And of course we can't look to the Republican party that controlled congress for 6 out of the last 8 years and the White House for the last 8 Years. No, it has to be those filthy, terrorist loving, America hating Democrats that are to blame.
The bottom line is that Barney Frank and the Democratic party did not force Wall Street investment bankers to cook the books for the last 8 years. Ever notice how Republicans like to privatize their profits and socialize their losses. Notice how quickly Republicans became socialists when it was time to bail the Über rich Wall Street elite?
Yeah me too.
- Mike Lane, Manchester
This country has been doomed by both parties. ...divided we fall, and we are clearly falling. It's a shame that democrats and republicans all forgot that they are first Americans. I swore allegiance to the United States of America, not the republican or democratic party. Will it be too late to get these idiots together to make our country great again? I think so. Hey, let's all argue about politics while the economy crumbles. Great idea. Such a shame.
- James, Manchester
There's plenty of blame for both Democrats and Republicans if we dig into the causes of the current economic crisis. It's fair to say that nobody sponsored or supported or signed legislation with the intention of harming the economy. Once again the Law of Unintended Consequences was ignored by members of both parties.
Maybe after the election the focus will shift from whether it's a Democratic or Republican problem to a better question: Who got rich in the housing/lending bubble and which public officials received the most money from those who got rich?
- Pat, Littleton
The law that Clinton signed was written by Gramm (Republican), Leach (Republican), Bliley (Republican) that is why repealing the Glass Stegall Act is called the Gramm (Americans are whiners) Leach (that pretty much says it) and Bliley (lost to history except as a funeral director) Act. It was like pulling the pin on the Republican economic hand granade. Took a while to go off but you only have to be close to those things. It is true that Democrats have wanted everyone, even those nasty poor people to take part in Bush's "ownership society." They never encouraged people to get loans for which they weren't qualified. That was thought up by the PRIVATE mortgage companies.
- Robert W. Mann, Deerfield
"Chuck Douglas: Is Shea-Porter really serious about ethics in Washington?"
The NH Union Leader, Op-Ed, May 26, 2009
U.S. Rep. Carol Shea-Porter is asking for $156 million in earmarks for New Hampshire, and she proudly says that this is in the public interest. Obviously, if we went project by project a reader might say, "Well, some seem like a good idea." But the problem is twofold.
The first is that these projects have not been considered on their merits. No competition has been held for the money appropriated. No governmental experts have blessed the projects in the normal course. Rather, the projects are to get around usual requests for proposals, applications, competitive bidding and agency review.
No hearing is held to evaluate the project and perhaps compare it to something else that might be needed at another school, hospital or college in the state. The connected talk to the powerful to get goodies for the connected. They are essentially no-bid contracts handed out to friends or major players.
That system has only been made worse under the federal spending bill Carol Shea-Porter voted for on March 1. That $410 billion appropriation contained more than 8,000 earmarks.
So what is the second major problem with earmarks? It is that total spending increases because every lawmaker with an earmark has to vote for every other lawmaker's earmarks plus a bloated budget bought with earmarks as incentives. In other words, total spending goes up constantly because a back-scratching pack of spenders has winked at each other, put in thousands of projects and loaded up tens of billions more in federal spending that may or may not ultimately be in the public interest. Yet all have to vote yes for all of it.
One idea that would help curb earmarks would be one that Carol Shea-Porter ought to champion. The law should prevent naming any program, building or project for a sitting senator or representative until at least 10 years after he or she has died or left office.
Among the pernicious results of earmarks are the bridges and buildings named for sitting senators and representatives, including some from New Hampshire. They take our money, build something in their honor and put their name on it while they are still in office! With my proposal, if they are still loved and revered a decade later, then name something to honor their service.
If she can step up to the plate on this one, then she will have challenged a number of her colleagues where it really hurts -- their egos.
Finally, let's turn to one of the kings of earmarks, Rep. Jack Murtha, D-Pa. Murtha has an airport that was built with your money in Johnstown, Pa., which has three flights a day back and forth to, guess where -- Washington, D.C. Two years ago when Jack Murtha was challenged and Congress sought to reprimand him for threatening reprisals against a fellow member who had challenged an earmark, Carol Shea-Porter voted not to reprimand Murtha. Jack Murtha, who was in Congress when I was there 20 years ago, had confronted U.S. Rep. Mike Rogers of Michigan, who had tried to strike a $23 million earmark for Murtha's district. Murtha threatened him by saying, "You will not get any earmarks now and forever."
But when it came time to support either Murtha or the Congressman who challenged the waste, Carol Shea-Porter cowardly went with the powerful and the spenders. The 2007 vote to reprimand Murtha went down to defeat, thanks in part to her.
No-bid contractors protecting other no-bid contractors is not the way to clean up the earmark scandal in Washington. Carol Shea-Porter is part of the problem, not the solution.
Chuck Douglas, a Concord lawyer, is a former Republican member of Congress from New Hampshire's 2nd District and a former state Supreme Court justice.
As people like Joanne continue their kool-aid drinking from the propaganda administration, its sad to see why the socialist are winning.
FYI Joanne, Ms.Shea-Pelosi held her vote until they had enough to pass the measure without her. (That way she could run on the fact that she voted against it and you would fall for it hook line & sinker and vote her in again)
- mike, Lancaster
Where were you all when Carol Shea-Porter was one of the few that voted against the first stimulus bill back in November that gave the banks 780 billion dollars. Did you give her any credit then? Now she wants to vote for something that actually gives most to the American people and not the banks. In the republican heyday I do recall the conditions at the top veterans medical facility, Walter Reed Army Medical Center in Maryland in the beginning of 2007. Did any of you visit the dinosaur Veterans Administration building here in Manchester during 2002-2007. Carol got to work and addressed that issue and did something about that too. NH is one the few states that hasn't had a full service VA hospital since 2001. She has worked hard on that to rectify it. She introduced the Veteran's Health Equity Act of 2008 and has made sure that if a veteran can't get the care he needs at the Manchester Veterans Administration building then she helps vets get the care they need at other hospitals close by in NH. I have been stymied how the republicans had no problem sending our soldiers off the war but when they came home half alive the conditions to help them were deplorable. I believe thats why McCain (a veteran himself) received a C on the report card because he voted against every bill to help veterans in any way. Carol Shea-Porter has definitely led the way in that respect. Do some research if you don't believe me. Just google her and veterans and see all the stuff she has done when Mr. Bradley has done nothing.
- Joanne, Manchester
President Obama has NOT promised to "eliminate all earmarks". He called for a "reform" of the system, and even went so far to state, among other things, that earmarks "should have a legitimate and worthy purpose".
Let's not forget that in March he signed a bill that contained over 9,000 earmarks!
A quick search on the web for "President Obama and earmarks" will clear up any doubts on his stated positions. So much for "change we can be deceived by".
- Guy Plante, Manchester
Watch the video to see how Congresswoman Shea-Porter treats one of her constituents. If the link is incomplete search " Carol Shea-Porter ignores constituent " at youtube.com.
- Wayne, Manchester
I dont understand what the fuss is all about. President Obama has promised that he will eliminate all earmarks. So there, situation under control, Carol is just wasting her time because he will get rid of all earmarks. Wow, i feel so much better having a President I can trust. Thanks Mr. President.
- Bob H, Manchester
It would be helpful if Mr. Douglas were to cite some specific examples by name of earmarks to which he objects. I think that he avoids doing so because he knows that the reading public will likely find these projects to be worthy of the money. Talking in glib generalities is easy (and misleading).
Incidentally, speaking of politicians having things named after themselves, a committee of Republicans was formed to have something in every county in the United States named after Ronald Reagan. Here in New Hampshire, the name of one of the mountains in the Presidential Range (Mt. Clay) was changed to Reagan by the (then) Republican-dominated legislature. Nice work, lackeys.
Also, Mr. Douglas might spend his time counting the number of sites in New Hampshire named after Republican senator Judd Gregg. Likely, he would grow very weary of the task (particularly in an election year).
- Gary Patton, Hampton
There isn't a single politian in office today that remembers the founding statements of the Declaration of Independence or the Bill of Rights. And of their constituents, we have all forgotten that government is supposed to be the people, and "that whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness."
- R, Raymond
The only ethics Carol believes in is getting herself re-elected. She has hooked her star to Reid and Pelosi. Both of their popularity is falling. We need to clean out Washington, stop the spending that has not happened yet and stop taking over private industries before our
Representatives take all we have, and we are all on the public dole. We need term limits for Congress so that the Representatives will work for the betterment of their constituents, not themselves. If Carol, Paul or Jeanne had an ounce of ethics they would sponsor a bill to investigate ACORN so that we can have elections without fraud.
Hopefully Shea-Porter, Hodes, Pelosi, Reid, Dodd and Frank will be ousted in 2010.
- Free Bird, Manchester
It's very simple - Carol Shea-Porter does not represent the interests of the people of New Hampshire. She does represent the interests of out of state kook-left special interest groups. She has to go.
- Tom, Campton
robert you keep using the same tired mantra you are nothing but a partisan there is greed on both side,s and yes that include,s your democrat,s so once in a while why don,t you put a little truth in your statement,s ..
- kevin dumont, nashua
Spending evaluated based on merit? I thought we all agreed that ANY spending is positive because "it gets the economy moving" (a fallacy shared by the two Bush "stimulus" programs).
Robert, if you must continue to use the "Bush war for oil" slogan, please tell us where the bleeping oil is--and if it's all about "greed," tell us exactly what you would do to make your more enlightened attitude mandatory. I suspect it includes imprisonment for achievers. Joanne, as long as fools only look at how "caring" a politician is, our decisions will continue to be overruled at gunpoint in favor of decisions that ruin our nation.
- Spike, Brentwood NH
Carol Shea-Porter is everything Chuck Douglas says however the alternative is NOT Frank Guinta, he has bungled his way through two terms as Mayor. John Stephen is onion paper thin and no better. The republicans who are the best choices to clean the incumbent clock iw Will Infrantine of Jim Weizcorek. Frank Guinta should for some insignificant county office and fade slowly away.
- Richard L. Fortin, Manchester
Joanne & Robert. The Vets do not like her. They know her "support" is a mile wide and a hairs width deep. I am one of them. Like fdar too many democrats her goal is to increase the depency of people on the federal trough. The "report card" she got was simply for being on some committee in DC, the State veterans organization blew a gasket when the national endorsed Shea-Porter because the national hadn't bothered to find out how the state organization felt. Do not assume we vetrans love her, the ones I know can't wait to see her gone.
- Jeff, Goffstown
Politicians solution: simple, give more bread to the rioters. Neil from Plymouth
- Neil McIver, Plymouth,NH
Oh please, Carol Shea-Porter is one of few that cares about people. Ask the vets how they feel about her. She was one of the leading representatives that got something done for them. She received an A on a report card from them last year. McCain received a C from them and Pres. Obama a B. These are the men fighting our wars for us and how they are treated by our country and these are the grades the Armed forces gave to our representatives. That says it all if you ask me. Considering the thousands of war vets that are coming home maimed from Iraq and Afghanistan and not getting the care they need. She did something about it and it made a difference to them. Seems like a lot of people forget about them except on Memorial Day, well she didn't.
- Joanne, Manchester
Boy, the echoes in your heads must be something. We have a representative now that supports veterans, works for local jobs, takes part in ethics legislation, tries to end Bush's war for oil and you just can't see beyond your habitual cut your taxes solution to everything. The problem with the economy is that much less is being spent than usual. Money is not being lent by the greedy banks and stock brokers that caused this problem in the first place. Get out of the way and let someone fix the problem so that you can go back to ladling money out of the government trough which is all you know how to do. The rest of us have work to do.
- Robert, Deerfield
Shooting the messenger doesn't change the message. Myself and others have posted a lot of the information seen in this article in previous comment sections on Carol Shea Porter.
- Chris, Merrimack
Let's not pretend it is only democrats who take part in earmarks. But of the two parties if both followed their beliefs the Republican Party should be the obvious one to stand against them. My concern today is not a democrat party that taxes and spends as if it does not affect the middle class like my self, it is a so called conservative republican party that allows it to stand when in power.
As for these bloated spending bills filled with earmarks and loaded with waste that benefit the friends of politicians the solution is obvious, one bill, no earmarks, one vote. Then maybe our politicians would have time to read the bills that would not be 900 pages long and the people would know where their money is actually being spent.
- Ross, Derry
Selfish, arrogant, ignorant clowns like Shea-Porter need to be cleaned out of Washington. This includes the guy at the top and his entire supporting cast.
- Brian, Farmington
Carol Shea Porter does as she is told by Nancy Pelosi and will continue to.Vote all of them out who voted for the earmarks and the people can take the country back !
- Dave, Newbury
Chuck Douglas on ethics, what a joke.
- brad, hooksett
I wouldn't really call the federal budget excessive, crippling, or pork filled. Rather, it is the raping of US taxpayers to benefit the many who do not work.
With Social Security, Medicare and Welfare complete failures because the programs are now just projects to hand out money to anyone and everyone, what member of Congress will have the courage to introduce legislation that will drastically cut spending in these programs.
Probably no one. Instead, we have a Congress and President that continue to spend at a dangerous rate and add new programs to our budget problems.
There was a time in this country that we named our bridges, squares and airports after real American heroes, soldiers who'd given their lives for our freedom.
- Melvin, Keene
Good points Chuck. Unfortunately there is no other way to politely put it; Ms. Porter is not one of the brightest bulbs we have ever sent to Washington. I honestly do not think she is even slightly aware of the damage she is causing by blindly doing the bidding of Reid & Pelosi. We just have to hold on until next year, where it is no doubt that she, being the weakest of the four we have in DC, will undoubtedly be sent packing back to Rochester.
- Thomas Thorpe, Portsmouth, NH
Its got to stop. We (the country) just cannot afford what the Democrats and Shea-Porter are doing. Although this country has vast resources they are and will continue to squander it all.
The big tax increases are coming people. Vote them all out.
- Bob, Salem
- Jonathan Melle
- Amherst, NH, United States
- I am a citizen defending the people against corrupt Pols who only serve their Corporate Elite masters, not the people! / My 2 political enemies are Andrea F. Nuciforo, Jr., nicknamed "Luciforo" and former Berkshire County Sheriff Carmen C. Massimiano, Jr. / I have also pasted many of my political essays on "The Berkshire Blog": berkshireeagle.blogspot.com / I AM THE ANTI-FRANK GUINTA! / Please contact me at firstname.lastname@example.org
- ► 2009 (43)
- Economic woes mean boom time for lawyers. -&- A b...
- The Corporate Elite & Uncle Sam at their WORST!
- Give us all a break, Jane Swift!
- Mayor Frank Guinta & his dirty & vindictive politi...
- Glenn Oullette for Mayor of Manchester, New Hampsh...
- The federal deficit is soaring toward $1 trillion ...
- Chuck Douglas is a former member of Congress from ...
- Frank Guinta & Peter Sullivan both voted for Satur...
- Frank Guinta: "I really see Sarah [Palin] bringing...
- Mayor Frank Guinta & my list of his DISSERVICES to...
- Massachusetts Mandated Healthcare INSURANCE! Also...
- ▼ October (11)