A DISGUSTING DEMAGOGUE
The word "demagogue" denotes a leader who utilizes prejudices and lies either to obtain and to hold on to power or to further her own political goals. Speaker of the House Nancy Pelosi (D-CA), pictured on the left, is a classic demagogue.
The Speaker addressed the House of Representatives on September 29, 2008, prior to its vote on the "Bailout Plan." When a spirit of nonpartisanship was the supreme order of the day, she pointed an accusatory finger at Republicans, attributing the current financial crisis to "the failed Bush economic policies" and to the "budget recklessness" of his administration. She further described the attitude of the administration as one of "anything goes – no supervision, no discipline, no regulation." She denounced with special rancor the fact that greedy CEOs were leaving their beleaguered companies with golden parachutes, each valued in the millions of dollars. She praised Rep. Barney Frank (D-MA) and his work and spoke affectionately of Rep. Maxine Waters (D-CA).
According to a recent USA Today/Gallup poll, only 26-27 percent of American voters approve of the job George W. Bush has done as President. He has become a convenient scapegoat. While he is not one of my political heroes, I hasten to add that it is incumbent upon critics to be fair in their evaluation of him, especially during the current financial crisis.
Walk with me down Memory Lane. At the center of the crisis were two government-sponsored entities (GSEs), Fannie Mae and Freddie Mac. They were privately owned companies that bought and sold mortgages from other companies in order to support the continued liquidity of the mortgage industry. These two GSEs were run by Franklin Raines and Jamie Garelick respectively, two Clinton appointees. Over the course of six years, the companies were mismanaged, straight into bankruptcy, while the two CEOs walked away from the mess with millions upon millions of dollars. Raines had earned approximately $100 million in bonuses during this period and possessed a golden parachute valued at $240 million. The downfall of these GSEs, led by two thieves, produced a ripple effect as prominent financial institutions holding subprime paper each in turn took a nose-dive into oblivion. As a result, credit lines tightened, a panic ensued, and the nation was pushed to the financial brink, where it remains today.
But wait one moment! In September, 2003, President Bush, according to even the tendentious New York Times, proposed "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago." Specifically, the President requested that an agency within the Treasury Department supervise mortgage giants Fannie Mae and Freddie Mac. According to this newspaper's account, "[t]he 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." The newspaper went on to state that "[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." This proposal from the President, mind you, was in 2003!
Rep. Frank, at that time the ranking Democrat on the Financial Services Committee, responded to the President with a categorical denial: "These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis." He added, "The more people exaggerate these problems, the more pressure there is on these companies, [and] the less we will see in terms of affordable housing." What a vibrantly humanitarian voice for the underprivileged!
Rep. Waters further assured the American people, "We do not have a crisis at Freddie Mac and particularly Fannie Mae under the outstanding leadership of Frank Raines." What is that again, Ms. Waters -- whose "outstanding leadership"?
Franklin Raines and Jamie Garelick, two of the most infamous crooks of the last 100 years, have not yet been prosecuted to the full extent of the law. Neither has been sent to jail. Are you wondering why? Well, curiously enough, Christopher Dodd (D-CT), head of the Senate Banking, Housing, and Urban Affairs Committee, and Barney Frank, now chairman of the House Financial Services Committee, were among those in Congress who received lavish financial contributions from these GSEs. Senators Barack Obama (D-IL), a member of the Federal Financial Management Committee, and Charles Schumer (D-NY), chairman of the Senate Finance Committee, also received large contributions as well.
In 2005, Senator John McCain (R-AZ) proposed the Federal Housing Finance Regulatory Reform Act in order to provide government oversight to GSEs involved in the home mortgage industry. He specifically warned of the kind of crisis we now face. His bill, thanks to a Senate controlled by Democrats, never made it out of committee. It does not, needless to say, tax the mind to reason why.
So, let me ask you: Is the nation's current financial crisis properly laid at the feet of President Bush? Weeeeeell, I don't really think so. It strikes me that the intent of Speaker Pelosi's mendacious remarks was to utilize this particular crisis in order to manipulate and to inflame public opinion against Republicans in the hope that her own party's short-term interest during this election year would be served. As such, she is a loathsome demagogue, who has no shame. The country is poorly served by her and her likes.
October 1, 2008