The link below contains a purported list of the top 25 in Congress who got contributions from the folks at Fannie and Freddie. Obama is listed third, after Dodd and Kerry, even though Obama is just a junior Senator. Obama is followed next by Clinton. Barney Frank and Nancy Pelosi are on the list as well.
http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080918
Then there is the Senate Banking Committee Chairman Christopher J. Dodd who allegedly got special mortgage deals from Countrywide, who gave preferential rates to 'friends' of company's chairman.
http://www.msnbc.msn.com/id/25140560/
For an interesting article purporting to detail the House Financial Services Committee Chairs long history with Fannie Mae, See http://www.businessandmedia.org/printer/2008/20080924145932.aspx
"House Financial Services Committee Chair promoted GSEs while former 'spouse' was Fannie Mae executive."
The link below describes how some in Congress tried to use the original version of the bailout bill to divert money eventually recovered to groups like ACORN, a group Obama has a long association with. See:
http://online.wsj.com/article/SB122247015469280723.html?mod=googlenews_wsj
And then there is House Speaker Nancy Pelosi, who allegedly has directed nearly $100,000 from her political action committee to her husband's real estate and investment firm.
http://www.washtimes.com/news/2008/oct/01/pelosis-pac-pays-bills-for-spouses-firm.
GLOBAL TOUR
Daniel W. Drezner
Time Out
The U.S. buyout of Fannie Mae and Freddie Mac says a lot about how the world has changed.
Email To A Friend
Please fill in the following information and we'll email this link.
The U.S. Treasury Department's takeover of Fannie Mae and Freddie Mac is one of those mega events that simultaneously calls for instant analysis (and lots of it) and time out for a deep breath or two. The move is so vast in its implications and says so much about how the world has changed, it's about as hard to take in as a view of the grand canyon. In the spirit of deep breathing, here are four thoughts to keep in mind about the buyout:
1. History is bunk. From a historical perspective, the U.S. buyout of these august institutions is head-spinning. To understand just how head-spinning it is, consider this sentence from a Russian businessweb site that appeared on Monday: "The Russian stock market's rise can be traced to positive news on the nationalization of U.S. mortgage agencies Fannie Mae and Freddie Mac."
For any reader who has a firm memory of the Cold War, this sentence is astounding. For one thing, Russia actually has a stock market. Second, the United States is now engaging in state intervention on an unprecedented scale-and with a Republican president making the decision, no less. Third, Russian capital markets are intertwined enough with American capital markets for a U.S. bailout to boost Moscow's bourse. This might be because Russia's sovereign wealth funds hold significant amounts-in the tens of billions-of Fannie Mae and Freddie Mac bonds.
Do not listen to people who claim that there is a new Cold War brewing between the United States and Russia. During Cold Wars, countries desperately try to avoid economic interdependence. As yesterday's reaction to the news suggests, Russia cannot avoid being part of the global economy.
2. It's the globalization, stupid. The easy political analysis of the takeover is to say that the U.S. federal government is taking this step to appease homeowners. It is certainly doing so, but it is also trying to soothe financial markets and-more important-please foreign creditors. China is far and away the largest foreign investor in long-term U.S. government agency debt-more than $375 billion. In the past month Chinese officials had warned about the implications of a collapse of the two housing giants.
Beijing was not the only foreign government to raise hackles about the status quo-other foreign officials voiced their concerns directly to Treasury Secretary Henry Paulson. Senator Chuck Schumer told the Wall Street Journal that, "There was a real fear that foreign governments would start dumping Fannie and Freddie...and not buy the bonds."
As long as the United States runs a current account deficit of more than $500 billion a year, it will need the trust of foreign capital and foreign governments. Judging by the global market reaction, seizing Fannie Mae and Freddie Mac helped preserve that goodwill abroad. One reason this happened on a Sunday was so that Asian stockmarkets would have the first opportunity to respond.
- 1
- 2
- Next Page »
My Take
Each Newsweek reader is different—and now your Newsweek can be, too. Use this page to create a experience that's personalized for you and your interests. My Take: it makes Newsweek whatever you want it to be.
Discuss