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You’ll Pay Big for This Bailout
Published by Pamela Gentry on Tuesday, September 23, 2008 at 12:17 pm.
By Pamela Gentry, Senior Political Producer
Sept. 23, 2008 – How many of the American people understand the word “bailout” or what President Bush is asking Congress to do?
While both parties are concerned with the dire reality of the U.S. economy, the Bush administration is asking lawmakers to move quickly and approve what is being called the “mother of all bailouts.”
Under Treasury Secretary Henry Paulson’s plan, taxpayers would foot $700 billion to buy bad mortgage debt in an effort to unfreeze the nation’s credit markets and get banks back to loaning money.
This action will place the government in a place it has never been, deeply involved in the fundamentals of the U.S. economy. This bailout could place the U.S. financial system on the brink of another style of governing: socialism.
Experts are predicting if this bailout works taxpayers will carry the financial burden of making these institutions solvent for more than 20 years. Making the youngest folks entering the workforce responsible for footing the bill.
Younger tax payers will have to live in a tighter credit market, borrow less money, save more money, and could face earning less money while corporate America balances their books.
By definition some of these realities sound a lot like the system of government known as socialism. Socialism “is any of various theories or system of social organization in which the means of producing and distributing goods is owned collectively or by centralized government that often plans and controls the economy.”
In part that’s what the U.S. Treasury will be doing. And in doing so points to an irony in longstanding Republicans policy. The GOP has always stayed away from federal regulations, congressional oversight and bailouts by the feds, but this crisis has them asking congress for all these measures.
The plan developed over the weekend to have the federal government buy all these bad loans appears to be the only way to give our stalled system a shock. Republican Sen. Richard Shelby of Alabama, the top-ranking Republican on the Senate Banking Committee, said the government’s efforts could well cost $1 trillion when the cost of the government takeovers of Fannie Mae, Freddie Mac and AIG were included.
Democrats have pledged to work toward a solution, but not without pointing to and pointing out that the crisis was developed during the years Republicans controlled the White House and Congress and championed de-regulation with minimal oversight. 
Senate Majority Leader Harry Reid (D-Nev.) issued a statement Saturday saying, “While the Bush proposal raises some serious issues, we need to resolve them quickly. I am confident that, working together, we will. Meanwhile, I call on the president to better explain to the public the severity of the threat all Americans face, and why he believes his approach is needed.”
This could be the highest price Americans will have to pay for Democracy – but it’s looking a lot like socialism.
Jffnn….above are the facts in-regards to your questions to Alex…note Obama has been in the senate for less than 2yrs and he #3….wow. Also is McCain’s bill that didnt see the day of light. You can vist the white house site to get specific warnings by the bush crew dating back to 2001. I think Bush and the crew should have taking their debate to the people more forcefully.
By Jerome R. Corsi
© 2008 WorldNetDaily
McCain pointed out Fannie Mae’s regulator had stated the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The bill passed the House but was never brought up for a vote in the Senate, largely because of Democratic opposition to change in the Fannie Mae and Freddie Mac regulatory structure that remained in place until the Treasury takeover two weeks ago.
As evidenced by the failure to pass the Federal Housing Enterprise Regulatory Reform Act of 2005, the Democrats in Congress have repeatedly fought back Republican Party efforts to reform the two mortgage banking giants.
Instead, Democrats in Congress have sought to preserve the quasi-governmental status of the mortgage giants, seeing Fannie Mae and Freddie Mac as places to locate former top Democratic Party operatives, where they have earned millions in compensation, despite a continuing series of financial scandals. Enron-like accounting manipulation, for example, boosted earnings to a level at which massive executive bonuses could be paid.
In the aftermath of the U.S. government takeover, attention has focused on three Democrats with close ties to Obama who served as Fannie Mae executives: Franklin Raines, former Clinton administration budget director; James Johnson, former aide to Democratic Vice President Walter Mondale; and Jamie Gorelick, former Clinton administration deputy attorney general.
All three Obama-related executives earned millions in compensation from Fannie Mae.
Johnson earned $21 million in just his last year serving as Fannie Mae CEO from 1991 to 1998; Raines earned $90 million in his five years as Fannie Mae CEO, from 1999 to 2004; and Gorelick earned an estimated $26 million serving as vice chair of Fannie Mae from 1998 to 2003, according to author David Frum, a fellow at the American Enterprise Institute.
All three have been involved in mortgage-related financial scandals.
In 1998, according to the Washington Post, Gorelick, as Fannie Mae vice chairman, received a bonus of $779,625, despite a scandal in which employees falsified signatures on accounting transactions to manipulate books to meet 1998 earning targets. The moves, in turn, triggered multi-million-dollar bonuses for top executives.
Gorelick was embroiled in another controversy over an alleged conflict of interest when a 1995 memo she authored as deputy attorney general surfaced while she was a member of the 9/11 commission.
The memo, which became known as the “Gorelick Wall,” appeared to establish barriers that barred federal anti-terrorist criminal investigators from accessing various federal records and databases that may have assisted them in their criminal investigations.
According to the Associated Press, Raines and several other Fannie Mae top executives were ordered in a civil lawsuit to pay nearly $31.4 million for manipulating Fannie Mae earnings over a period of six years to trigger their massive bonuses.
Raines was also forced in the settlement to give up Fannie Mae stock options valued at $15.6 million.
Last year, the Securities and Exchange Commission alleged Freddie Mac had engaged in accounting fraud from 2000 to 2002, imposing a $50 million fine on the company and on four executives fines for amounts ranging from $65,000 to $250,000.
Raines currently advises Obama on housing policy.
Johnson was appointed to head Obama’s vice presidential selection committee, until a controversy concerning an alleged $7 millions in questionable real estate loans he received on favorable terms from failed sub-prime mortgage lender Countrywide Financial surfaced and forced him to step down.
WND previously reported a panel chaired by Elena Kagan, dean and professor of law at Harvard Law School, speculated at the June two-day meeting of the American Constitution Society that Gorelick was a possible attorney general cabinet appointment if Obama should be elected president.
Senator John McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say.
At the time that Fannie Mae and Freddie Mac recruited Mr. Davis to run the Homeownership Alliance in 2000, they were under new pressure from private industry rivals and deregulation-minded Republicans who argued that the two companies’ federal sponsorship gave them an unfair advantage and put taxpayers at risk. Critics of the companies had formed their own Washington-based advocacy group, FM Watch. They were pushing for regulations that would deter the companies from expanding into new areas, including riskier and more profitable mortgages.
“The value that he brought to the relationship was the closeness to Senator McCain and the possibility that Senator McCain was going to run for president again,” said Robert McCarson, a former spokesman for Fannie Mae, who said that while he worked there from 2000 to 2002, Fannie Mae and Freddie Mac together paid Mr. Davis’s firm $35,000 a month. Mr. Davis “didn’t really do anything,” Mr. McCarson, a Democrat, said.
The Facts,
This is just too much hate…we can read the news/Obama slander papers for ourselves…you don’t need to post it here. Please stop the HATE and LIES that you repubs are known for! This is not a contest…this is our lives!
Miss Ann….what a comical post from you….lol. I dare you to dispute anything I posted. The lies is the crap Pam and others cpost here daily, just keeping balanced with the Facts my sister.
Alex
Alex
What does Col. Sanders do to chickens before they are sold ?
This is a bunch of bullsh** I watched Bush pathetic a** on tv yesterday. He has put this country and economy in a nauseating state. He’s poisoned peoples minds to make it seem as if he has done nothing wrong.When will you people wake up and examine the way this world has dramatically changed. People are losing their jobs and houses. Families are being torn apart because of lack of financial support. No one is happy. The rich get rich and the poor get poorer. If Bush wants to come up with this money he needs to check his pockets and those whom are in office with him. LISTEN TO PINKS SONG “DEAR MR PRESIDENT”. Their are so many people in Washington D.C.homeless and hungry and he just looks the other way. How can ahecall themselves a man of God and say they cares about the way of the world when he just ignores us lower/middle class people. Im barely making it. I live pay check to pay check. How can you support Bush and anyone like him(McCAin/ Palin)PEOPLE PLEASE OPEN YOUR EYES!! We have a chance to change this. VOTE OBAMA..
fact is getright many blacks from poor homes still have access to education in america via the various programmes out there for them to access. so dont cry me a river jfffnn, if its out there, you take it … and use it.. nobody is going to handout anything to anyone any more.. that is so 1965 , done and dusted…the future is barack obama, and he is america’s last , best hope for the future.. mccain is more of the same and we need someone like obama to lead a nation that has the type of military power that america has.. so far bush has been so irresponsible in his use of power and what has that lead to?. more begging for tax payers dollars and the potential for a world wide crash of the type we have not seen in many a year.no wonder gordon brown hotfoots it to washington to kiss some yankee ass.!!! britain is going under as her banks will close one by one if this $700billion dollar deal does not go thru,..word on the street is that one well known high street bank will not exist by xmas over here and that word is spreading.. the credit crunch is losing jobs and losing confidence.. and all brown can do is go kiss bush’s keister…
the adoption of the hood or street culture as black american culture wholesale is the biggest mistake and marketing ploy that is not doing blacks world wide any favours at all. even our own black youth are adopting these disgusting terms (n.i.g.g.a., etc ) not understanding the mentality that goes with the use of these discriptions that black americans use about themselves.. untill blacks STOP DEFENDING THE USE OF THESE TERMS.. and reject the thinking behind them.. they will remain one step behind the whiteman.. its true… no arab will ever degrade themselves and JUSTIFY IT..other blacks just copy shamelessly without looking at what is behind it. getright, esther, alex, nobody wants the truth about themselves, as its easier to point the finger at others.. i see the truth on a daily basis on the streets , see blacks waste opportunity and focus on irrelevance and still wonder why they cant match the asians , the chinese, the jew when it comes to owning rather than buying stuff.. as long as blacks who are in western economies continue to focus on the wrong things and expect to be paid for something they never suffered from directly, it will be the same mental stagnation and nothing will change.. all i see are boys who think father hood is more important than responsiblity and acting stupid is a sign of “blackness”… am sure you see it too. i think what is the point of the black presence in the uk when all they can do is kill each other and be proud to do so.
Olounwa
Rest assure nobody including me is crying you a river,you just ain’t worth it.I know what I’m talking about because here I see it everyday.I keep telling you all blacks are not into gansta rap or whatever marketing you are talking about.Just because SOME young blacks are into it does not mean ALL young blacks are into it.You remind me of the days when older folk were dead set against rock and roll.Every time a new form of art or expression comes out it will get a bad rap,no pun intended.When rap came out I did not like it but I did not and still do not endlessly talk bad about it because I do not listen to it,but for those that do,well thats what they do.You seem too have a deep aversion too entertainment or entertainers
Typo – education it should read
I am very upset with President Bush about this bailout!!!
This bailout is a sharp departure from the principles of Republicanism.
This bailout is a Democratic scheme to take over the markets!!!
A Republican president is pushing this through with the support of the Democratic party. The Republican party is vehemently against this.
Most of the Senate Republicans are going to vote against it.
Almost all the House Republicans will vote against this.
This bailout is something I would expect from a Democratic administration.
Patrick
The lead republican is for it as well as McCain so don’t lay this on the hands of the democrats.Bush as head of the republicans wants swift passage so don’t get things twisted.Infact as a democrat I am against it.
Patrick
I find it hard too believe that republicans will let the rich republicans on wall st. hanging.Even the Sec. of Treas. a stunch republican who by the way was the one who contacted the Speaker of the house first about the idea wants it.Now who wants the plan ? Again,don’t get it twisted.
Patrick N. Washington,
As a Democrat I am very much against this bailout as well. You said the republican party is against it, well I though George Bush was a republican? “Democratic scheme to take over the markets?” LOL. Surely you jest!
THE HOUSE REJECTED IT – DEMS AND REPUBS ALIKE.
The Facts,
DO YOU REALLY THINK PEOPLE ARE GOING TO READ ALL THAT BULLSHYT???
YOU AIN’T THE ONLY ONE THAT KNOWS HOW TO RESEARCH ON THE INTERNET AND OTHER SOURCES. WHY DON’T YOU JUST CREATE YOUR OWN BLOG AND EVERYONE CAN READ YOUR SO-CALLED FACTS! PEOPLE DON’T HAVE TIME FOR ALL THAT SHYT!!!
THEY GOT BOOKS IN THE LIBRARY IF PEOPLE WANT TO READ A BOOK, DAMM!!!
The vast majority of House Republicans voted against the bailout while the vast majority of the Dems voted for the bailout.
The bailout was backed by the Democrats. Pelosi and the Democrats mainly supported the bill.
Patrick,
And your point is? John McCain was a no show and did not deliver the republicans; nor did he take a leadership role.