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Stimulating the Economy with Partisan Political Paybacks

Mary Laney 30 January 2009 One Comment

Shameful.  That’s the word President Obama used when dressing down bankers for the bonuses they awarded recently.  Mr. Obama called them to his office and told them that now is the time to show restraint, not a time to issue bonuses.   But did the President go far enough in his criticism?  The answer is: no.

Others should be called to task by the President – and paraded before Congress for grilling – they are the very people whose actions gave birth to our present economic dilemma.  They are the men who headed and the men and women who sat on the boards of Fannie Mae and Freddie Mac.  Those are the political appointees who fostered and profited by the sub-prime mortgages that eventually grew into the boondoggle called mortgage “bundling”, where mortgages were sold as good paper when they were, in fact, debt and caused banks to fail or teeter on the brink of failing and brought America’s economy to the brink of a possible depression.

Why is President Obama saying nothing about Fannie Mae and Freddie Mac?  Why isn’t congress calling former board members to testify?  Why isn’t ACORN, the “grass roots” group, called before Congress?  After all, it was ACORN that protested in front of banks and bankers’ homes to force them into issuing sub prime mortgages to people who couldn’t afford such mortgages.

Does this absence of investigation fall under the heading of “politics”? After all, ACORN campaigned boldly for President Obama, illegally signing up people multiple times to vote.  Could their actions possibly be giving their group protection?

Is the same protection true of the Fannie Mae and Freddie Mac inside profiteers?  Directors walked away with hundreds of millions of dollars as did board members.  Their profits grew in accordance with the numbers of sub prime mortgages issued – and they kept pressure going for more such questionable mortgages, even over the objections of those who saw the economic storm gathering.  But where is the investigation into their actions?  Why aren’t they being called to task before special committees in Congress?  Is the answer “clout”?  Could be.  After all, people like Rahm Emanuel and Bill Daley were among the politicians who sat on the Fannie Mae board while this profiting went on.

If Congressman Barney Frank and Senator Christopher Dodd – who head powerful committees on banking in the House and Senate – can call private businesses to testify before them, why aren’t they calling Fannie Mae and Freddie Mac directors to testify? Why isn’t the President calling them to the White House for some answers on their giant bonuses? And where is the media in calling for such testimony?

If you trace the origins of our current economic plight, it goes back to President Jimmy Carter who signed into law a document to make it easier for all people to purchase homes.  President Bill Clinton strengthened the order, but eventually saw that some oversight should be established over Fannie Mae and Freddie Mac.  President George Bush also saw that oversight was necessary to reign in Fannie and Freddie.  Mr. Bush, stating that he saw an “economic crisis” in the future if Fannie and Freddie weren’t reined in, tried five times, beginning in 2002, to have legislation to do just that.  The problem is, the legislation never got out of committees.  Why?  Is it because of the political ties congressional leaders had with members of Fannie and Freddie?  That’s a question every American should be asking today.  That’s a question that the President should be looking into.  That’s a question that should be posed on the editorial pages of every newspaper.

We are facing the toughest economic times since Jimmy Carter was in the White House, although unemployment hasn’t yet reached that record high.

There is a spending plan now before Congress that the administration is calling a “Stimulus”package, despite the fact that it won’t stimulate anything except bigger government.

It’s time for Americans to wake up and demand a stimulus package that seriously stimulates the economy through tax cuts which will allow companies to afford to hire again – not a package that simply  pays back political debts to unions and others who helped win the election.

Unless this stimulus package is seriously restructured, in the future the best American workers will be able to hope for will be government jobs.

After all, the government will be the only employer offering free health care and a job for life.

Mary Laney is a regular columnist for the Chicago Daily Observer

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