[Rhodes22-list] Bush Speech

[Hank]

Rob,

According to a white house press release previously posted by Ed, Bush
warned congress of this 17 times since 2001 and asked them to act, so yes, I
believe that he would have signed the bill had congress passed it.

Here was Ed's original post.

Hank

--------------

Peter:

Here is some information.  You may not believe it because of the source, but
just lay your eyes on it:

White House warned 17 times about problems with Fannie and Freddie
September 22, 2008 - 11:07 ET

For many years the President and his Administration have not only warned of
the systemic consequences of financial turmoil at a housing
government-sponsored enterprise (GSE) but also put forward thoughtful plans
to reduce the risk that either Fannie Mae or Freddie Mac would encounter
such difficulties.  President Bush publicly called for GSE reform 17 times
in 2008 alone before Congress acted.  Unfortunately, these warnings went
unheeded, as the President's repeated attempts to reform the supervision of
these entities were thwarted by the legislative maneuvering of those who
emphatically denied there were problems.

2001

April: The Administration's FY02 budget declares that the size of Fannie Mae
and Freddie Mac is "a potential problem," because "financial trouble of a
large GSE could cause strong repercussions in financial markets, affecting
Federally insured entities and economic activity."

2002

May: The President calls for the disclosure and corporate governance
principles contained in his 10-point plan for corporate responsibility to
apply to Fannie Mae and Freddie Mac.  (OMB Prompt Letter to OFHEO, 5/29/02)

2003

January: Freddie Mac announces it has to restate financial results for the
previous three years.

February: The Office of Federal Housing Enterprise Oversight (OFHEO)
releases a report explaining that "although investors perceive an implicit
Federal guarantee of [GSE] obligations," "the government has provided no
explicit legal backing for them."  As a consequence, unexpected problems at
a GSE could immediately spread into financial sectors beyond the housing
market.  ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO,"
OFHEO Report, 2/4/03)

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's
review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial
Services Committee to recommend that Congress enact "legislation to create a
new Federal agency to regulate and supervise the financial activities of our
housing-related government sponsored enterprises" and set prudent and
appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November:  Council of the Economic Advisers (CEA) Chairman Greg Mankiw
explains that any "legislation to reform GSE regulation should empower the
new regulator with sufficient strength and credibility to reduce systemic
risk."  To reduce the potential for systemic instability, the regulator
would have "broad authority to set both risk-based and minimum capital
standards" and "receivership powers necessary to wind down the affairs of a
troubled GSE."  (N. Gregory Mankiw, Remarks At The Conference Of State Bank
Supervisors State Banking Summit And Leadership, 11/6/03)

2004

February: The President's FY05 Budget again highlights the risk posed by the
explosive growth of the GSEs and their low levels of required capital, and
called for creation of a new, world-class regulator:  "The Administration
has determined that the safety and soundness regulators of the housing GSEs
lack sufficient power and stature to meet their responsibilities, and
therefore…should be replaced with a new strengthened regulator."  (2005
Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to "not take [the financial
market's] strength for granted."  Again, the call from the Administration
was to reduce this risk by "ensuring that the housing GSEs are overseen by
an effective regulator."  (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And
Freddie's House In Order," Financial Times, 2/24/04)

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed
by the GSEs and called for reform, saying "We do not have a world-class
system of supervision of the housing government sponsored enterprises
(GSEs), even though the importance of the housing financial system that the
GSEs serve demands the best in supervision to ensure the long-term vitality
of that system.  Therefore, the Administration has called for a new, first
class, regulatory supervisor for the three housing GSEs:  Fannie Mae,
Freddie Mac, and the Federal Home Loan Banking System."  (Samuel Bodman,
House Financial Services Subcommittee on Oversight and Investigations
Testimony, 6/16/04)

2005

April: Treasury Secretary John Snow repeats his call for GSE reform, saying
"Events that have transpired since I testified before this Committee in 2003
reinforce concerns over the systemic risks posed by the GSEs and further
highlight the need for real GSE reform to ensure that our housing finance
system remains a strong and vibrant source of funding for expanding
homeownership opportunities in America… Half-measures will only exacerbate
the risks to our financial system."  (Secretary John W. Snow, "Testimony
Before The U.S. House Financial Services Committee," 4/13/05)

2007

July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform
package for Fannie Mae and Freddie Mac, saying "first things first when it
comes to those two institutions.  Congress needs to get them reformed, get
them streamlined, get them focused, and then I will consider other options."
(President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August –
up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the
previous month – the lowest level in nine years.  Median sale price of
existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass
legislation reforming GSEs, saying "These institutions provide liquidity in
the mortgage market that benefits millions of homeowners, and it is vital
they operate safely and operate soundly. So I've called on Congress to pass
legislation that strengthens independent regulation of the GSEs – and
ensures they focus on their important housing mission.  The GSE reform bill
passed by the House earlier this year is a good start.  But the Senate has
not acted.  And the United States Senate needs to pass this legislation
soon."  (President George W. Bush, Discusses Housing, The White House,
12/6/07)

2008

January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms,
says "A new regulatory structure for the housing GSEs is essential if these
entities are to continue to perform their public mission successfully."
(David Nason, Testimony On Reforming GSE Regulation, Senate Committee On
Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase.

March: President Bush calls on Congress to take action and "move forward
with reforms on Fannie Mae and Freddie Mac. They need to continue to
modernize the FHA, as well as allow State housing agencies to issue tax-free
bonds to homeowners to refinance their mortgages."  (President George W.
Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation and
"modernize Fannie Mae and Freddie Mac. [There are] constructive things
Congress can do that will encourage the housing market to correct quickly by
… helping people stay in their homes."  (President George W. Bush, Meeting
With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation
reforming Fannie Mae and Freddie Mac before the situation deteriorates
further.

"Americans are concerned about making their mortgage payments and keeping
their homes. Yet Congress has failed to pass legislation I have repeatedly
requested to modernize the Federal Housing Administration that will help
more families stay in their homes, reform Fannie Mae and Freddie Mac to
ensure they focus on their housing mission, and allow State housing agencies
to issue tax-free bonds to refinance sub-prime loans."   (President George
W. Bush, Radio Address, 5/3/08)
"[T]he government ought to be helping creditworthy people stay in their
homes. And one way we can do that – and Congress is making progress on this
– is the reform of Fannie Mae and Freddie Mac. That reform will come with a
strong, independent regulator."  (President George W. Bush, Meeting With The
Secretary Of The Treasury, the White House, 5/19/08)
Congress needs to pass legislation to modernize the Federal Housing
Administration, reform Fannie Mae and Freddie Mac to ensure they focus on
their housing mission, and allow State housing agencies to issue tax-free
bonds to refinance subprime loans."  (President George W. Bush, Radio
Address, 5/31/08)
June: As foreclosure rates continued to rise in the first quarter, the
President once again asks Congress to take the necessary measures to address
this challenge, saying "we need to pass legislation to reform Fannie Mae and
Freddie Mac."  (President George W. Bush, Remarks At Swearing In Ceremony
For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President's call for action and passes reform of
Fannie Mae and Freddie Mac as it becomes clear that the institutions are
failing.


On 9/25/08, Lowe, Rob <rlowe at vt.edu> wrote:
>
> Hank,
> Oh, agreed, Bush is not solely responsible.  Congress is in this just as
> much.  But it was Bush giving the speech and asking the American people
> to bail out Wall Street.  And administration set the agenda.  Think if
> Congress had passed laws that would have restricted the abuses that led
> this to this mess that Bush would have signed them?  Think not, so in
> reality the administration is squarely at fault here.  If we are facing
> the dire consequences that the Federal Reserve and the Secretary of
> Commerce say we are, isn't it reasonable to ask for an explanation of
> what when wrong and why and what are you going to do so that it doesn't
> happen again?  But I don't believe that was covered.  Just we're in a
> heap of crap and we need you taxpayers to bail our ass out, even though
> you don't get anything out of the deal.  Yeah, I know, a functioning
> economy and all that.  But there is no guarantee or even a hint that
> this will save the economy.  Just keep us from sliding down hill even
> further. - rob
>
>
> -----Original Message-----
> From: rhodes22-list-bounces at rhodes22.org
> [mailto:rhodes22-list-bounces at rhodes22.org] On Behalf Of Hank
> Sent: Thursday, September 25, 2008 9:28 AM
> To: The Rhodes 22 Email List
> Subject: Re: [Rhodes22-list] Bush Speech
>
> Rob,
>
> What I fail to understand is why everyone wants to paint Bush as SOLELY
> responsible for everything that happens in this country.  Last time I
> checked we weren't living in a dictatorship.  Congress has to pass the
> laws
> before the President can sign them.  Congress shares just as much
> responsibility in this as Bush.  Let's give credit, and blame, where it
> is
> due and not just dump it on a convenient scapegoat.
>
> Hank
>
>
> On 9/25/08, Lowe, Rob <rlowe at vt.edu> wrote:
> >
> > Brad,
> > That pretty much sums it up.  What he failed to say was that he was
> > apologizing for 7 years of failed policies that created this mess in
> the
> > first place and that he was trying to save his legacy by having the
> > taxpayers bail his ass out of trouble.  Now if he had said that, I'd
> > probably consider going along with his plan.  But wait, $700B spread
> > among 300M citizens is only around $2300 a person, why not just ask
> > everyone to pony up their share?
> >
> >
> > -----Original Message-----
> > From: rhodes22-list-bounces at rhodes22.org
> > [mailto:rhodes22-list-bounces at rhodes22.org] On Behalf Of Brad Haslett
> > Sent: Wednesday, September 24, 2008 9:46 PM
> > To: The Rhodes 22 Email List
> > Subject: [Rhodes22-list] Bush Speech
> >
> > I truly hope SOMETHING gets passed so the loan on the house I'm
> > selling closes on schedule next week (Tip O'neil said it best - all
> > politics is local).  Here's one summary of the Presidents speech.
> > Brad
> >
> > ---------------
> >
> > Bush: Congress Must Act to Save Stupid People
> >
> > Posted By Scott Ott On September 24, 2008 @ 10:41 am In Business, U.S.
> > News |
> >
> > (2008-09-24) - The foundation of the U.S. economy could crumble,
> > President George Bush said today, if Congress fails to approve a U.S.
> > Treasury plan to take over foundering financial firms, a proposal
> > which the president called "a much-needed 21st-century civil rights
> > act for stupid people."
> >
> > "To sustain this shining city on a hill," Mr. Bush said, "we need to
> > rescue the ignorant, irresponsible folks - from Wall Street to Capitol
> > Hill to Main Street - who got us to where we are today. We must
> > guarantee that no American suffers the soft bigotry of being forced to
> > live with the consequences of his bad decisions."
> >
> > The president, in remarks to the news media clearly aimed at reluctant
> > Republicans in Congress, said, "Our financial system rests on a
> > foundation of huge banks, brokerage houses and quasi-governmental
> > agencies that followed Washington's lead by gambling on long-shot,
> > poorly-collateralized investments. Now this glorious way of life is
> > threatened, and we must act to preserve it."
> >
> > "We need to guarantee that the structures, systems, people and
> > products that got us to this point won't be tossed on the ash heap of
> > history," said Mr. Bush. "If these giant companies fail, then America
> > will be left with nothing but thousands of small to mid-sized
> > financial firms that made prudent investment decisions during the past
> > 15 years."
> >
> > The president added that, "Americans value the liberty they have to
> > buy homes they can't afford, to invest in securities backed by nothing
> > but hope, and to draw six- and seven-figure salaries based on the
> > courage to risk taxpayer dollars on deals that even the dealmakers
> > don't understand."
> >
> > "It is a moral imperative that we guard the civil rights of these
> > idiots," he said. "If we fail, then we face the specter of free market
> > capitalism run amok, and millions of Americans will feel the painful
> > lash of personal responsibility across their backs."
> >
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