Larry: ONE example proving your point does not make the title, nor the conclusions of this post incorrect.

To say “We now know the details of the Senate opposition” is absurd despite Scott’s tepid endorsement.

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Larry, great job looking this up. I’d like to look at it more later (busy this afternoon). This is EXACTLY the kind of feedback and discussion that makes Flopping Aces strong. Sincerely, my thanks to you!

-Scott

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Hi, Guys.

Little follow up:

http://ap.google.com/article/ALeqM5jRzoY3Qvz0l_IFNXguiYMSK9ur5AD93TNP1O0

Basically, it was Bill Frist who ultimately “blocked” the Senate bill. There were 25 Republican Senators who signed Senator Hagel’s letter and 29 Republicans who did not sign it, including not only the then-GOP majority leader (Frist), but also the current GOP minority leader (Mitch McConnell).

We now have the complete story of the 2005 attempts to regulate Fannie Mae. A regulatory bill passed in the House, with a majority of Democrats joining with a majority of Republicans to approve the bill, despite speeches against the bill by Barney Franks and Maxine Waters. Some Democrats said dumb things, but a majority of Democrats voted in favor. According to the Bill’s sponsor, Republican Michael Oxley, the bill was opposed by the Bush White House and by the Senate.

We now know the details of the Senate opposition. (story above).

My conclusion remains that the title of this thread is incorrect. The Democrats did NOT “block” financial reforms in 2005. Which is precisely why neither John McCain nor any Senate Republican running for re-election (including Mitch McConnell) is making that charge. McCain said that he signed a letter supporting reform. We now know what the letter was. And we now know why it didn’t go anywhere.

- Larry Weisenthal/Huntington Beach CA

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Well, I guess you’re done with our conversation INRE the causes of the bail out too, Larry… yes?

Well, don’t be a stranger. I, for one, found your comments to be thought provoking. And opposing opinions alway demands rechecking your base information for their merits… and inspiring more research. Being a research junkie, I’m always appreciative of being challenged with one that presents cogent dissenting arguments.

BTW… hope you and the group come up with some serious inroads into curing the big “C”. It’s an admirable quest.

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We’ve each had our say. It’s your blog, and you deserve the last word. Thank you for allowing me to state my opinions as your guest.

- Larry Weisenthal/Huntington Beach, CA

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Larry: I’m not going to waste my time by repeating everything I have said before and the essential elements of this post which DO document the efforts Republicans made for reform of Fannie Mae and the efforts Dems made to block it.

I realize you simply prefer NOT to allow any blame to be cast on the Dems and you are an enabler of the tricks they pull.

So be it.

I’ve presented my side in detail and you haven’t given me anything that casts doubt (other than your own) on my conclusions.

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“I again repeat that no Senate Republican, including McCain, has ever made this charge, despite the fact that they obviously have every motivation to do so, were it, indeed, true, which it certainly is not.” (Larry)

You’ve got to be kidding, right? McCain has been saying it everywhere he can. Are you deaf or what? Didn’t you see all the videos? Didn’t you watch the debate last Tuesday? Come’on, get real! Even Bill Clinton said it and blamed the Dems.

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The point is that the GOP controlled Congress from January 1995 to January 2007 and the only Fannie Mae regulatory bill to pass either chamber of the congress was the October 2005 bill, which was authored by a Republican (Oxley) and which passed with the votes of 122 out of 204 Democratic member of the House (a majority) and with the votes of a large minority of Republicans.

This bill was actively opposed by the White House, as expressly stated by Oxley. I’m personally certain that the main opposition to the House-passed bill was from the Senate Republicans, as the majority of the House Democrats supported the bill, but only a (substantial) minority of House Republicans. My understanding is that the Senate Republicans wrote their own, alternative bill, for which they were unable to find sufficient support.

It isn’t likely that only a minority of House Republicans would have supported the House bill with a majority of Democrats supporting and then the situation would not just be the reverse in the Senate, but that Senate Democrats would be in such opposition to a bill passed in the House with a majority of Democratic votes that they could actually “block” the bill with a filibuster threat.

I mean, don’t you agree with me on this? What happened, precisely, in the Senate remains opaque, but, on the basis of available information presented on this thread, it’s neither credible nor fair to claim that Democrats “blocked” Fannie Mae regulatory reforms in 2005. I again repeat that no Senate Republican, including McCain, has ever made this charge, despite the fact that they obviously have every motivation to do so, were it, indeed, true, which it certainly is not.

In contrast to the House action in 2005, in which Fannie Mae regulatory reform was passed with strong Democratic majority support, all we have from anyone else during that entire period of GOP congress control between Jan 1995 and Jan 2007 are speeches and press releases. The fact that some individual House Democrats were caught on CSPAN saying dumb things is much less important than the fact that the House Democrats supported improved Fannie Mae regulation in 2005 (authored by a Republican) by a strong majority vote.

- Larry Weisenthal

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I’m on the fly most of today, but will check in a few times to carry on the three way conversation Mike’sA, Larry and I are having.

There’s just a couple of things that I wanted to address in brief. Larry, INRE your comments from #125:

The floated a different bill, instead, and the Republican sponsor of the House-passed Fannie Mae regulatory bill (Rep. Michael Oxley) claimed his bill was opposed by White House “ideologues” (his word) who wanted to privatize Fannie and Freddie and who opposed a bigger government role.

Technically, Fannie and Freddie are already privatized in their operations, but are a GSE… meaning optionally government backed. But it was never a guarantee… But today, we realize they did guarantee it.

S190 created a new regulatory agency, wresting away it’s current oversight under HUD… and gave that new regulatory agency authority to address some, today, familiar issues like golden parachutes, risk assessment criteria, capital levels, etc. This does not sound like a WH who wanted to further privatize Fannie/Freddie…. but rather like a WH and Senate who wanted more govt oversight of the GSEs.

A final bipartisan regulatory bill passed by a huge margin. But this bill was killed — truly killed — by the Republican controlled Senate, who obviously did not make a priority of putting together a regulatory bill which would be acceptable to the majority of both Houses of Congress and which the President would sign.

You originally said the WH preferred the Senate bill, Larry. In which case the GOP was likely to have constructed it within the framework they felt the WH would not veto. If that passed, the House and Senate could have worked together to reconcile the differences for Presidential signature/veto.

While I agree there is ample blame for both parties in this whole mess over the 13 years of it’s growth to the financial tumor it is today, I can’t see this Senate bill being a GOP failure entoto. With likely 100% of the DNC opposed, it only took a few GOP to oppose it for it’s demise.

And yes… I will agree witih your last paragraph that had any of these elected bozos had a crystal ball to see today’s times, they might have acted differently. But the point is, they carry significant power to affect our nation. And frankly, I think all of them took that responsibility far too lightly, assuming they could not cause this collapse.

I will, however, remain to agree to disagree with you on Wall Street masters of the universe being the prime culprit here. I believe Congress created an environment of easy money/credit, promoted risky loans for minority home ownership, and the market took over from there. And I also blame a very undisciplined, gimme “stuff” oriented society who thought they could live forever outside of their financial means.

So just as the DNC and GOP must share blame, so must the consumer.

Last, in your comment #123, Larry:

Note that the House bill was actively opposed not by the Democrats, but by the Senate Republican leadership, the Bush administration, and also by the Wall Street Journal editorial page.

I did not see where Oxley expressly stated “Senate Republican leadership”. He said:

The bill encountered opposition in the Senate, in the administration, and on the Journal’s editorial page.

That opposition was certainly by the DNC, and quite likely some GOP since they did not get the majority verbals to forward it to the floor for a vote. But that may not have been “leadership”.

But fact remains, DNC opposed fixes and not enough GOP overrided them when they had a majority. But also, if enough DNC would have supported reform, this could have been accomplished. So we are still blaming a small segment of GOP, and the bulk, if not all of the DNC.

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Mike, Here’s the reality. There was a bipartisan bill which passed the House in 2005, which would have regulated Fannie Mae and improved its lending standards. This wasn’t a Democratic bill, it was a bipartisan bill.

Now, there were elements of this bill which the White House and Senate Republican leadership didn’t like. So the Republicans killed the House Fannie Mae regulation bill in the Senate. The floated a different bill, instead, and the Republican sponsor of the House-passed Fannie Mae regulatory bill (Rep. Michael Oxley) claimed his bill was opposed by White House “ideologues” (his word) who wanted to privatize Fannie and Freddie and who opposed a bigger government role.

Now, you claim that Democrats “killed” this latter bill. You’ve yet to provide the slightest bit of evidence to support this charge. Not a single Republican Senator, including John McCain has made this charge. Given the very high level of GOP support in the House for the Oxley bill, it is entirely plausible that there were insufficient GOP Senate votes to support the bill. What typically happens when there is a disagreement between House and Senate bills, there are meetings and compromises to hammer out a deal. Obviously, the majority of Democrats didn’t oppose substantive regulation of Fannie Mae, despite the exisistence of old CSPAN clips of a few House members saying stupid things from time to time. The obvious truth is that no one — President, McCain, Senate leadership — cared enough circa 2005 – 2006 to do a deal with the House to reform Fannie Mae regulation.

So both Democrats and Republicans favored Fannie Mae regulation. Talk is cheap. Getting the votes is what counts. Fannie Mae regulation was favored in the House by a Democratic majority and a strong Republican minority. A final bipartisan regulatory bill passed by a huge margin. But this bill was killed — truly killed — by the Republican controlled Senate, who obviously did not make a priority of putting together a regulatory bill which would be acceptable to the majority of both Houses of Congress and which the President would sign. The Senate Republicans could have passed a strong regulatory bill along the lines of the House bill. They chose not to do so.

My own position is bipartisan. I don’t blame Republicans. I don’t blame Democrats. Everything is 100% clear in retrospect. Had Senate Republicans and the President realized in 2005 what was going to happen in 2008, I’m sure they’d have done a deal with the House to pass regulatory reform. I’m sure that Bush would have actually made an effort to achieve regulatory reform in 2003, rather than simply phoning in a press release and dropping the subject. I’m sure that Clinton would have twisted a lot more arms. I’m sure that all the banks who bought mortgage backed securities because they thought they were going to make a lot of money wouldn’t have done so. And that brings us to the proximate cause of this global debacle: the Wall Street Masters of the Universe were the proximate cause.

- Larry Weisenthal/Huntington Beach, CA

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