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The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Archive for October 5th, 2008


Posted by iusbvision on October 5, 2008

We told you before how Obama sued banks with so called “community organizers” to force the banks to give bad loans to people who couldn’t afford them. Well now we have the audio of Obama saying in 2007 that giving sub-prime loans to people who couldn’t afford them is a good idea.

Click HERE to listen to the audio and get the story!

Posted in Campaign 2008, Chuck Norton, Journalism Is Dead, Mortgage Crisis, Other Links | Leave a Comment »

Mike Oxley – Another Congressman Trying to Lie His Way Out of Blame for the Mortgage Crash

Posted by iusbvision on October 5, 2008


Mike Oxley (R-OH)

Mike Oxley (R-OH)

Former Republican Representative Mike Oxley shares some responsibility for the mortgage crisis and he is trying to lie his way out of his role in what appears to be an attempt to preserve his legacy and his future income.

Oxley has a mixed record, and as we have reported before, to his credit he did try to end the corruption with Fannie Mae and Freddie Mac and he did try to get some more effective oversight of it. We wrote about the mortgage crisis in detail (links below). 

So what did Representative Oxley do? To answer that question we first have to go back in time just a litle bit.

He co-wrote the now infamous Sarbanes-Oxley law which was a “response to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. These scandals, which cost investors billions of dollars when the share prices of the affected companies collapsed, shook public confidence in the nation’s securities markets. Named after sponsors Senator Paul Sarbanes (D-MD) and Representative Michael G. Oxley (R-OH)”.

The law had some major unintended consequences. While it did do some good such as introducing criminal penalties for executives who commit fraud. It was too costly to administrate and yielded limited results. Some of the latest corporate institutions covered by that law crashed and the Sarbanes-Oxley law not only failed to prevent it, it actually made things WORSE.

How did it make things worse you ask? The non-indexed mark to market accounting rule.

What it does, according to federal accounting rules, is artificially lower the value of an asset or security that has lost value and artificially inflates an asset’s or security’s value when the market is going up. So when these mortgage securities crashed companies had to say they were worth nothing (because no one wanted to buy them) in spite of the fact that there is a house there that has some value. This problem was a real factor in why things crashed so quickly because it lowered the liquidity rating and solvency rating of those assets artificially.

When the housing market was going up the companies holding them had their rating inflated by them, making it all look dandy on paper and when they crashed they had their rating set artificially low and the company fell below solvency standards.

Former House Speaker Newt Gingrich and many business leaders and economists asked to have this rule fixed; no one in government listened. Several analysts have stated that SEC Chairman Chris Cox could have changed this rule with the flexibility included in the bill, but in spite of the calls to fix this rule he enforced it as it was.

Instead of just owning up to a mistake, an unintended consequence, and not pushing to fix this rule when he had the chance, Oxley is now lying about what happened to the mortgage industry. And they aren’t very good lies either because after about two hours of public records searching I was able to debunk his story easily.

In the September 9, 2008 Financial Times Oxley said this:

Instead, the Ohio Republican who headed the House financial services committee until his retirement after mid-term elections last year, blames the mess on ideologues within the White House as well as Alan Greenspan, former chairman of the Federal Reserve.

The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley, now vice-chairman of Nasdaq.

He fumes about the criticism of his House colleagues. “All the handwringing and bedwetting is going on without remembering how the House stepped up on this,” he says. “What did we get from the White House? We got a one-finger salute.”

The House bill, the 2005 Federal Housing Finance Reform Act, would have created a stronger regulator with new powers to increase capital at Fannie and Freddie, to limit their portfolios and to deal with the possibility of receivership.

Mr Oxley reached out to Barney Frank, then the ranking Democrat on the committee and now its chairman, to secure support on the other side of the aisle. But after winning bipartisan support in the House, where the bill passed by 331 to 90 votes, the legislation lacked a champion in the Senate and faced hostility from the Bush administration.

Adamant that the only solution to the problems posed by Fannie and Freddie was their privatisation, the White House attacked the bill. Mr Greenspan also weighed in, saying that the House legislation was worse than no bill at all.

“We missed a golden opportunity that would have avoided a lot of the problems we’re facing now, if we hadn’t had such a firm ideological position at the White House and the Treasury and the Fed,” Mr Oxley says.

Folks, the record shows that almost all of that is simply not the case.

1. Oxley reached out to Barney Frank he says..

Misleading – Frank voted no and tried to block the efforts to pass the legislation in the House and most Democrats voted no as well. In 2005 the Republicans didn’t need Democrats to pass a bill in the House but did need them to pass anything in the Senate.

2. Oxley says that Alan Greenspan opposed the reforms.

Lie – you can read Greenspan’s Congressional testimony for yourself HERE and HERE and we wrote about it HERE. Greenspan was very much in favor of the new Republican proposed regulation to fix the old regulation that was being skirted.

Alan Greenspan testimony – If we fail to strengthen GSE regulation, we increase the possibility of insolvency and crisis. … As I concluded last year, the GSEs need a regulator with authority on a par with banking regulators, with a free hand to set appropriate capital standards, and with a clear and credible process sanctioned by the Congress for placing a GSE in receivership, where the conditions under which debt holders take losses are made clear.

3. Oxley says that the White House and the Treasury opposed reforms.

Lie. The White House and the Treasury pushed Congress many many times to get these reforms passed and each attempt is listed HERE. Excerpts:

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)

2004  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 home-ownership 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)

4. Oxley says the Legislation lacked a champion in the Senate.

Lie – Sen. Hagel, Dole, and Sununnu pushed for these reforms for years. After S.190 got hung up in the Senate because the Democrats were filibustering everything and could not get 60 votes, and the Democrats in the finance committee all voted no, John McCain became a co-sponsor to try and hammer the legislation through but no Democrats would budge. In fact Senators Sununnu, Hagel and Dole introduced this legislation repeatedly (link HERE and video HERE).

5. Oxley says that the administration wanted privatization of Fannie Mae and Freddie Mac or nothing.

Lie – Nothing in Alan Greenspan’s testimony (which is linked in its entirety above) , Secretary Snow’s testimony, Deputy Secretary Bodmon’s testimony, nor any known statement by President Bush say privatize or nothing or any such argument. All of them pushed for the reforms pushed by Dole, Hagel, and Sunnunu. In fact here is an article by “All Business” about the hearings make no mention of Republicans trying to privatize it, but they do make mention of Democrats opposing tighter regulation and accounting practices saying that it would restrict Fannie and Freddie’s mission to give low cost loans to poor people and minorities. Of course those were loans that too many of the poor could not pay back.

HERE is the record of the 2005 hearings in the House on this legislation and no one brings up the White House or a push by Republicans to push for privatization of Fannie Mae and Freddie Mac.

You can also read quotes of what Senators, Representatives and others said about Fannie Mae and Freddie Mac in hearings HERE.

So the question is, why is a former member of Congress lying through his teeth about what happend and trying to blame Bush for all this?

There are several reasons:

1. The White House has never been aggressive about defending itself from untrue allegations. They seem perfectly content with letting partisans and the elite media with little regard for the truth define them . So blaming Bush means you will get away with it and the Democrats will gleefully pile on to give credibility to the bogus claim as Barney Frank did HERE.

2. The Sarbanes-Oxley Law is his legacy and he does not want that legacy sullied with a layer of blame from the worst financial scandal in the history of the world.

3. Oxley speaks and consults for big fees about Sarbanes-Oxley compliance and if word got out that a screw up of this magnitude was a contributor to the mortgage meltdown it would certainly damage his gravy train of fees; not to mention his cushy job at NASDAQ.

UPDATE: Newt Gingrich Explains in some detail

Every facet of the mortgage crisis story, who benefited and who is lying can be found HERE, HERE, HERE, HERE, HEREHERE, HEREHERE and HERE. – Editor

Posted in Campaign 2008, Chuck Norton, Journalism Is Dead, Mortgage Crisis | 2 Comments »

Watch a Politician Lie & Watch O’Reilly Go Nuclear on Barney Frank

Posted by iusbvision on October 5, 2008

UPDATE: Frank now says that critisizing Congress is racist…. wow is this guy desperate or what? He says that conservatives are trying to blame blacks getting loans for the mortgage mess. No Barney we are blaming you pinheads in Congress who were getting paid to let this go on when Republicans were trying to fix it and end the corruption.  

This video is one of the greatest lessons in how politicians lie and shirk responsibility that I have ever seen. So read carefully because we are going to parse this one. 

For those who don’t know, Barney Frank is one of those most responsible for the largest economic scandal in the history of the world; this mortgage crisis. Barney Frank has been a ranking member of the House Finance (banking) Committee, has served in the House since 1981, and is now the chairman of the House Finance Committee.

What you need to know before you watch in a nutshell –

We have explained in detail in different ways  HERE, HERE, HERE, HERE, HEREHERE, HEREHERE and HERE just how this mess happened, who and what got the ball rolling, and who got paid to keep it rolling when people tried to stop it. We explained how the Federal Reserve, the OFHEO, the Treasury Department, President Bush, and other members of Congress tried to get new laws passed that put the mortgage industry’s biggest players, Fannie Mae and Freddie Mac, under control of REAL banking regulators that can enforce Generally Accepted Accounting Practices. Those who monitor Freddie Mac and Fannie Mae, the OFHEO, can monitor but cannot enforce, they can only report to the finance (banking) committees in Congress. OFHEO has been asking for real banking regulator powers or the transfer of the oversight to such an agency for years. You can read these reports HERE and HERE (warning long so read them later). Frank and other Democrats on that committee and in the Congress voted no and worked to block efforts to reform it. This mess was completely avoidable.

See this video here before we get on to the shootout –

Ok Time for O’Relly vs. the Lying Politician

Frank: “I think that prospects for going forward (as an investment) is very solid.”

Keep this comment in mind as you watch the interview.

Frank says that he passed a bill in May… “I did what the Republicans couldn’t do in 12 years, get a bill passed the regulatory committee”

That is because most of the House Democrats, including YOU Barney, voted NO when the Republicans tried to fix this in those 12 years Barney. Those OFHEO reports above have been telling him what was coming for years and even the Democrat friendly New York Times warned of this in 1999…after years of knowing what was coming and denying it…. he says he passed a bill in May… After the Republicans tried to end the corruption being laundered through the “Affordable Housing Trust Fund” all the Senate Democrats voted no and Democrats in both chambers denied that the problems even existed as we saw on the video (more on that trust fund below). In 2005 the House Republicans had enough control to force passage in spite of Frank and his allies, but the Democrats in the Senate unanimously voted no and blocked it.


Frank:“..The regulation should be improved. Now from 1995 to 2006 when the Republicans controlled Congress we were in the minority we couldn’t get that done.”

We just saw on video, and it is a part of the Congressional record, Barney Frank saying that Fannie and Freddie are fine, I have other video’s of the other Democrats on his committee saying the same thing, and they even accused the OFHEO regulators of racism because the CEO of Fannie Mae was a black man named Franklin Raines and the committee wanted poor people to get these loans (that were bad loans).

FRANK: Although in 2005, Mike Oxley, of Sarbanes-Oxley fame, a pretty tough guy on regulation, did try to put a bill through to regulate Fannie Mae. I worked with him on it. As he told The Financial Times, he thought ideological rigidity in the Bush administration stopped that.

Oxley’s non-indexed mark to market accounting rule, which was put into effect by the Sarbanes-OXley law in reaction to the Enron scandal,  was a big factor in this mess. I wrote an article that explains this whole crisis in plain English, step 5 of that article explain’s Oxley’s role. Oxley is trying to throw blame off of himself just as Frank is and a new article explaining his role and lies is on the way.

Back to Fannie Mae and Freddie Mac: Some Democrats were willing to go along with the bill until Oxley and the other Republicans added an amendment to the bill to prevent recipients of the “Affordable Housing Trust Fund” from engaging in political activities.

This is crucial. Trust funds supplied from the government have very little oversight and groups such as ACORN and LaRaza were getting millions in taxpayer and taxpayer backed dollars to engage in partisan activities on behalf of Democrats. These groups get this money because they do have affordable housing councillors, but they also engage in partisan activities and ACORN has been caught multiple times in multiple states for vote fraud. Oxley was right to add this provision in the bill.

When taxpayer dollars or taxpayer insured dollars are used to promote a candidate, the word for that is corruption. When Republicans tried to put an end to this corruption most Democrats in the House and all Senate Democrats voted to stop any attempt to fix Fannie Mae and Freddie Mac. They voted no and denied that there was a problem as you saw in the video, who is it that is engaging in ideological rigidity?


Frank:But the basic point is that the first time I had any real authority over this was January of 2007. And within two months, we had passed the bill that regulated.”

A fat lie. As the ranking Democrat on the committee you had great influence and authority over the other Democrats on the committee going back for many years.


FRANK: And then also, one other point: The Senate was dragging its feet, as often happens. And in January of 2008, I asked Secretary Paulson to put in the stimulus bill. So, the earliest chance I got to put tough regulation of Fannie Mae and Freddie Mac, we did it.

The Senate was dragging it’s feet alright, the Democrats all voted NO..all of them…and why? Because Fannie and Freddie were paying members in the Senate too, most of them Democrats and they did not wnat the provision that would have stopped ACORN from engaging in partisan activities on behalf of Democrats. The Republicans did not have the 60 votes necessary to force the issue.

Here is where Frank tries to deny what O’Reilly just showed in the video. Frank is literally trying to tell the audience that you did not see what you just saw.

O’REILLY: All right, that’s swell. But you still went out in July and said everything was great. And off that, a lot of people bought stock and lost everything they had.

FRANK: Oh, no.

O’REILLY: And — yes, oh yes. Oh, yes.

FRANK: I said it wasn’t a good investment. Please stop yelling.

O’REILLY: Don’t give me any of that, we just heard the words. What are you…

FRANK: That’s wrong.

O’REILLY: You didn’t say that? You want me to play it again for you?

FRANK: You didn’t listen to it.

O’REILLY: No, I listened to every word you said. And I have the transcript right here.

FRANK: No, and I said it wasn’t a good investment.

O’REILLY: Yes, you said going forward, we’re going to be swell.

FRANK: No, I didn’t say swell. Excuse me, Bill.

An important observation needs to be made here. Frank did say that future prospects are looking solid.. ok O’Reilly uses the word swell but the meaning of what O’Reilly is saying is totally correct.

So instead of facing the 99% truth O’Reilly was giving him, Frank stands on the 1% part that wasnt sand says “I didn’t say swell”. This is the same tactic that Bill Clinton used. When his affair with Gennifer Flowers was exposed and someone said that he had an 11 year relationship with her, Clinton would say, “That is not true. I did not have an 11 year relationship with her.” – when the truth was that he had a 12 year relationship with her.

Politicians like to stand on a tiny detail that is only slightly wrong and use it to technically deny the allegation. Politicians are masters of this kind of deception and use this tactic often just as Barney Frank is here.  

O’REILLY: Look, from August ’07 to August ’08.

FRANK: Excuse me, Bill.

O’REILLY: Don’t — look, stop the B.S. here. Stop the crap! From August ’07 to August ’08…

FRANK: You know, here’s the problem going on your show…

O’REILLY: …under your tutelage, this industry…

FRANK: Here is the problem going on your show.

O’REILLY: …declined 90 percent. 90 percent.

FRANK: Yes, but…

O’REILLY: Oh, none of this was your fault! Oh, no. People lost millions of dollars. It wasn’t your fault. Come on, you coward! Say the truth.

FRANK: What do you mean coward?

O’REILLY: You’re a coward. You blame everybody else. You’re a coward.

FRANK: Bill, here’s the problem with going on your show. You start ranting. And the only way to respond is almost to look as boorish as you. But here’s the facts. I specifically said in the quote you just played that I didn’t think it was a good investment. I wasn’t telling anybody to buy stock. I said it wasn’t a good investment.

Secondly, I wasn’t presiding idly over this. I was trying to get the regulations adopted. We got them adopted in May.

“I wasn’t telling anyone to buy stock”… but hey Barney people bought stock vbased on you saying that the future aspects are solid… and he knows that.

And now they are yelling back and forth at each other, I wish O’Reilly would have taken him apart like a good tactician, but this is what we have to work with  so back to the show….

O’REILLY: You said going forward, it’s going to be swell. And people under that bought stock in that, thought it was a good investment.

FRANK: I didn’t say swell. I didn’t say swell. No, I said in fact in that quote that you played and didn’t listen to because you’re busy ranting that it’s not a good investment. I said that at the time. I did think we were going to improve things going forward. Yes, we had some things that needed improvement.

O’REILLY: All right, you want to — here, let me read you your quote here. OK? OK? “I do think the prospects going forward are very solid.”

Now O’relly catches him on the “I didnd’t say swell” dodge…

FRANK: But that’s not the part about it not being a good investment.

O’REILLY: Now, people bought stock when you said that.

FRANK: You are distorting it. Bill, you’re lying by your words.

O’REILLY: This is what you said.

FRANK: What about the part where…

O’REILLY: Not lying. And I played it and I read it.

FRANK: What about the part where I said it wasn’t a good investment?

O’REILLY: You said it’s not the best right now, but going forward this is going to be solid.

FRANK: Right…

O’REILLY: People lost millions.

FRANK: I didn’t say solid, I didn’t say swell. You distort consistently. And you think ranting and raving…

O’REILLY: All right.

FRANK: …you don’t want to talk about 1994, like no history is relevant. The fact is that you had a problem with an administration — conservative.


O’REILLY: I know, it’s all the conservatives, it’s all the Republicans and not you.

FRANK: Oh, come on.

O’REILLY: None on you. That’s a joke.

…….. comments on the exchange HERE.

Posted in Campaign 2008, Chuck Norton, Mortgage Crisis | Leave a Comment »