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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Sept. 22, 2008 / 22 Elul 5768

Crony capitalism

By Jack Kelly

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http://www.JewishWorldReview.com | Lending money to people who probably won't pay it back isn't good business.


If you wrap crummy loans in a clever package, they're still crummy loans.


Your typical Wal-Mart shopper understands this. But the Masters of the Universe on Wall Street and in Washington evidently didn't.


There are a lot of people to blame for the subprime mortgage crisis.


The Federal Reserve Board under Chairman Alan Greenspan (1987-2006) pursued what seems in hindsight clearly to have been way too loose a monetary policy. Banks were awash with money to lend and got careless in how they lent it.


Ostensibly to aid the poor and working class, the Clinton administration and Congress encouraged lenders to give mortgages to bad credit risks. The combination of easy money and the expansion of the number of borrowers unable to repay their loans sent housing prices through the roof, creating the bubble whose bursting has led to this crisis.


Congress in 1999 repealed the law that established a bright line between commercial and investment banks. This meant bad investments by banks could jeopardize depositors. Wall Street created "derivatives" that multiplied profits in good times, but also multiplied risk if there were defaults.


Most important was corruption and mismanagement at the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac), which together controlled 90 percent of the secondary mortgage market.


Once your bank has lent you money to buy a house, it can't lend the money again until you pay it back. But if your bank sells your mortgage, it can make another loan right away. Without the secondary market, most of the funds for home mortgages would dry up.


Fannie and Freddie went broke because they bought billions of dollars worth of subprime mortgages, on which borrowers defaulted when the housing bubble popped. Fannie bought most of its bad mortgages from Countrywide Financial, whose CEO, Angelo Mozilo, gave sweetheart loans to senior executives of Fannie Mae.


Fannie and Freddie cooked their books so senior executives would be paid millions of dollars in bonuses to which they were not entitled. Inadequate regulation kept the book-cooking from being discovered until the crisis had become a catastrophe.


President Bush proposed regulatory reforms in 2003, but Congress took no action. In 2005, John McCain and three other GOP senators proposed a strong reform bill. It died when Democrats threatened a filibuster. Democrats opposed reform in part because they feared it would mean fewer loans to poor people.


"Fannie Mae and Freddie Mac are not facing any kind of financial crisis," Rep. Barney Frank (D., Mass.) told the New York Times when the Bush bill was introduced. "The more pressure there is on these companies, the less we will see in terms of affordable housing."


Democrats and some Republicans opposed reform in part because Fannie and Freddie were very good at greasing palms. Fannie has spent $170 million on lobbying since 1998 and $19.3 million on political contributions since 1990.


The principal recipient of Fannie Mae's largesse was Sen. Chris Dodd (D., Conn.), chairman of the Senate Banking Committee. No. 2 was Barack Obama.


Mr. Dodd was also the second largest recipient in the Senate of contributions from Countrywide's political action committee and its employees, and the recipient of a home loan from Countrywide at well below market rates. The No. 1 senator on Countrywide's list? Barack Obama.


Fannie Mae CEO Franklin Raines was forced to resign in December, 2004, because of "accounting irregularities." The Washington Post reported July 16 that the Obama campaign has called Mr. Raines "seeking his advice on mortgage and housing policy matters."


Mr. Obama appointed Mr. Raines' predecessor, James Johnson, as head of his vice presidential search committee until he also was implicated in "accounting irregularities," and it was revealed he'd received cut-rate loans from Countrywide.


Chicago billionaire Penny Pritzker, head of Mr. Obama's finance committee, chaired the now-defunct Superior bank when it began to cook the books to conceal losses from subprime mortgages. The holding company her family owned collected $200 million in dividends on phony profits.


The trouble with crony capitalism isn't capitalism. It's the cronies.

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JWR contributor Jack Kelly, a former Marine and Green Beret, was a deputy assistant secretary of the Air Force in the Reagan administration. Comment by clicking here.

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