Roylin Petties, III – 9/24/08

This page was last updated on October 5, 2008.

Democrats can’t do worse than GOP; Roylin Petties, III; Beaver County Times; September 24, 2008.

10/5/08 - Since I originally published this critique, I came across a Youtube video showing clips of congressional testimony in 2004 regarding Fannie Mae and Freddie Mac. This video shows Democrats strongly defending Fannie/Freddie while Republicans and the regulator were sounding the alarm and pushing to rein in Fannie/Freddie.

A previous Republican bashing letter from Mr. Petties is here.

Below is a detailed critique of the subject letter.

“In recent weeks I have been watching the news and all I hear is bailout, bailout.

“The failed policies of the GOP have come full circle. Everyone knows that part of the Republican platform is less government and fiscal responsibility.”

[RWC] Mr. Petties ignores the fact Fannie Mae and Freddie Mac, the core of the problem, are GOVERNMENT sponsored enterprises and Democrat creations going back to FDR (Fannie Mae – 1938) and LBJ (Freddie Mac - 1968).

“Both themes have been thrown out the window under the Bush administration. John McCain is now screaming regulations and saying that he will return Washington to fiscal responsibility.

“Please do not be fooled by the political talk of McCain. Take the time to look at his record. He has voted many times against government regulations for the banking sector, and now he is screaming regulations from the rooftops.”

[RWC] Mr. Petties really hopes you don’t “take the time to look at [Mr. McCain’s] record.” Why? Mr. McCain raised an alarm about Fannie Mae and Freddie Mac back in 2005/2006 and cosponsored legislation to increase oversight. Democrats blocked that legislation.

“I do not know whether any candidate can fix what Bush and the Republicans have done, but I do believe that Barack Obama and the Democrats cannot do any worse.”

[RWC] I know Mr. Petties wants to blame Republicans for the mess, but the record points to Democrats as the principle players from beginning to end.

In 2001, President Bush’s 2002 budget (his first) raised an alarm about Fannie Mae and Freddie Mac and testimony before Congress by Treasury Secretary Snow raised the alarm again in 2003. Alan Greenspan also raised alarms in 2003 and 2005. Democrats, led by Rep. Barney Frank (D-MA), Sen. Chris Dodd (D-CT), and Sen. Chuck Schumer (D-NY), resisted all efforts to reign in Fannie Mae and Freddie Mac. Indeed, during a 2003 hearing, Mr. Frank said, “These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Democrats were also the biggest beneficiaries of political contributions from Fannie Mae and Freddie Mac employees, with Messrs. Dodd and Barack Obama being #1 and #2 on the list with more than $100,000 each. Further, former high-ranking officials {Franklin Raines [vice chairman (1991 – 1996) and CEO (1999 – 2004)] and Jim Johnson [vice chairman (1990 – 1991) and chairman & CEO (1991 – 1998)]} of Fannie Mae are Obama advisors.

Even Bill Clinton acknowledges the Democrat link. In a recent interview, Mr. Clinton said, Democrats for years have been “resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.” While what Mr. Clinton said about “Republicans in the Congress” is historically accurate, I’m not so sure about his claim about himself. I say that because it was Clinton Administration policy to “encourage” Fannie Mae, Freddie Mac, and private lending institutions to make high-risk (aka “subprime”) mortgages. “[T]ighten[ing] up a little on Fannie Mae and Freddie Mac” and pushing high-risk mortgages would have been inconsistent positions.

Finally, here’s another indication Democrats are at the core of the problem. If Republicans were at the core, the Democrat-majority Congress would be having nonstop hearings.