As far as some of your other very good comments: From the NY Times article the regulatory body is, “The Office of Federal Housing Enterprise Oversight, which is part of the Department of Housing and Urban Development…” Thus it appears that Congress can set the capital-reserve requirements for Fannie and Freddy, but that is different than ensuring Fannie/Freddie are actually meeting those ratios.

Concerning McCain… McCain (in your linked article) in May of 2006 was speaking on the very same accounting irregularities that were raised in the NY Times article three years previously. The entire time the GOP controlled congress so if this was one of their priorities then I have to ask why they never passed it. Perhaps they were too busy passing the bankruptcy reform (which got either unanimous or near unanimous support from the GOP) or some other bills which they deemed more important…. I guess the GOP got distracted by Terri Schiavo and passing legislation (back in March 2005) that did wonders to help the American public….

At any rate, you raise some good points. I don’t know what happened to any eventual legislation, but it is clear that the GOP did not consider it to be worth the effort to push through, like they did so much else at the same time even against the opposition of the Dems.

One last note, the link you provided has this disclaimer prominently displayed in the sidebar, “Though often a transcript of the debates on the House and Senate floors, like C-SPAN transcripts, the Congressional Record can be significantly modified by Members of Congress after the fact. Entries in the Congressional Record can reflect the edited, prepared versions of statements actually made on the floor, and on very rare occasions can contain seeming entire debates between Members of Congress that never took place.” Given that fact that this record can be changed, and given that fact that McCain and Palin removed a lot of apparently “damaging” information from the web when McCain first announced Palin as a running mate, I place very low stock in the information from this record. Even if it does support my argument that the GOP didn’t act on the 2003 plan that the White House wanted.

From what I can tell, the bill never came to a vote. Was this solution the correct one, and would it have prevented the recent crisis? I have no idea. But at least you can't argue that McCain was asleep at the wheel, since he clearly spoke of grave concerns even three years ago, while others where dismissive of the problems.

''These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

“The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios. “

Yet now that you mention this, I'm confused, because if OFHEO is part of HUD, then it would seem that the executive branch is responsible. Can anyone shed more light on this?

In the 2006 election cycle, Fannie Mae was giving 53 percent of its total $1.3 million in contributions to Republicans, who controlled Congress at that time. This cycle, with Democrats in control, they've reversed course, giving the party 56 percent of their total $1.1 million in contributions. Similarly, Freddie Mac has given 53 percent of its $555,700 in contributions to Democrats this cycle, compared to the 44 percent it gave during 2006.

Seems Freddie Mac only worried about who was in power, they contributed greater monies to the party in leadership, 2006 Republican – 2008 Democrats.

“The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

''We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,'' the independent agency that now regulates the companies.
So, let me get this straight…. Bush and GOP leaders in Congress wanted to create a new agency because Freddie Mac manipulated its books and because critics have said that Fannie does not adequately hedge against rising interest rates….
So in order to keep Freddie from cooking it’s books and to guarantee Fannie would enter into more derivatives contracts (isn’t that one of the reasons financials are failing… because of these complex financial transactions?) Bush wanted to create a new agency. I thought that was called more bureaucracy… Any reason why Bush didn’t address the incompetence of the Republicans run agencies who oversaw Fannie and Freddie to begin with?

I love the spin holding up this article as proof that the Dems wanted less regulatory oversight. First of all this was just a plan being introduced by the White House to Congress for the first time. There was not even any legislation written to debate. The underlying reason to create a new government agency to oversee Fannie and Freddy was not based on any notion that Fannie/Freddie would fail due to their business practices. But the reason there was concern was because of the incompetent GOP oversight of the two agencies in the first place. Bush wanted more government to address the accounting problems, not to fix any “systemic” risk in the types of transactions the companies entered into. Quite the contrary, as the NY Times article pointed out, critics of the existing scheme wanted Fannie and Freddie to enter into MORE derivatives transactions. So to somehow blame Dems on the current financial crises for expressing concerns on a “plan” to move the oversight of Fannie and Freddie into a brand new government agency is ridiculous. I’m not saying that the Dems didn’t have some role to play… but I am saying that pointing to this article on a plan (not even legislation) being introduced to Congress to create more government bureaucracy and a new agency in which the Dems expressed their initial concerns is not the smoking gun. Unless of course you feel that Bush should propose a plan, the GOP-controlled Congress (at that time) should write legislation without any input from any other interested party and have Bush sign it into law is the way our government should work….

If you're using Firefox you can download an add-on called “BBCodeXtra” and you'll have your wish. That and built in spell check are why I switched two years ago and I've had no problems. Actually bookmarking threads on blogs was, for me at least, easier.

The McCain Camp:

“…McCain Shifts Position on AIG”

http://www.bloomberg.com/apps/news?pid=20601103…

The Obama Camp:

“You'll notice that Obama doesn't really assert anywhere in here that he supports — or opposes — this bailout.”

http://blogs.abcnews.com/politicalpunch/2008/09…

It's pretty reassuring to know that these two are displaying magnificent leadership qualities. There's more…McCain wanted a commission to investigate, Obama dismissed it; now however Pelosi is calling for it:

http://www.politico.com/blogs/bensmith/0908/Oba…

Good Grief!!

Really, does anyone think that bringing up a 25 year old investigation (which led to McCain being cleared of impropriety but chastised for poor judgment while three Democrats were found to have improperly interfered in an investigation) is going to deflect from the Democratic party's complicity in the Fannie Mae and Freddie Mac debacle?

There's plenty of blame to go around to both parties for our current economic meltdown, but it's clear that on Fannie and Freddie it has been the GOP (particularly Bush and McCain) who foresaw disaster and attempted to increase oversight, while the Dems fought it every step of the way.

http://hotair.com/archives/2008/09/16/whose-pol…

http://hotair.com/archives/2008/09/17/mccains-a…

So I guess it's understandable that Obama's supporters need to change the subject, and I guess the Keating scandal fits the bill. Of course, the blogger will have to take responsibility for the fact that his article is itself serving the same purpose as a push poll.

http://proteinwisdom.com/?p=13271