Friday, September 19, 2008

Sen. Barack Obama (D-Fannie/Freddie)

The next time you hear a liberal Dem assert that Republican-pushed financial deregulation has led to the current financial crisis, remind him or her that (1) one of the key causes of the current situation was the practice financial institutions making mortgage loans to people who couldn’t really afford them; (2) dating from the early Clinton years and extending until very, very recently, that trend was cheered on, not criticized, by governmental policy makers of all political stripes who greatly enjoyed boasting of ever-increasing home ownership rates; (3) perhaps the most important participants in the trend were government-sponsored organizations Fannie Mae and Freddie Mac, who made lots and lots of politically popular loan guarantees to back higher-risk mortgages made to lower-income folks; (4) as recently as earlier this year, Congressional Dems wanted to give Fannie and Freddie the authority to back even greater numbers of higher-risk loans; and, finally, (5) as we now know, in his short time in the Senate Barack Obama has taken more fundraising cash from the two companies than any other senator except one has taken during the past 19 years.

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