Brian Lamb of C-SPAN interviewed Peter Wallison of the American Enterprise Institute on Q&A yesterday. The revelations regarding Fannie Mae and Freddie Mac were eye-opening. This was by far the most clear and frank discussion I've seen on the issue and speaks directly to the perverse influence of financial institutions in our democracy.
The indictments are strictly non-partisan. Lamb conducts an excellent and thorough interview. Every American voter should be aware of this sordid tale.
http://www.q-and-a.org/Program/?ProgramID=1197
Transcript Excerpt:
LAMB: Let me show you a piece of paper. This is not very fancy graphics, but there are 70 members of the House Financial Services Committee. Every time you see a line through a name, that means that, in the 2008 cycle � and you can actually turn the pages here, same thing on the other side � the names really don’t matter.
But out of the 70 members, 50 of them got (ph) money for their campaigns �
WALLISON: That’s right.
LAMB: � from Fannie Mae. And, of course, money from Freddie Mac.
But we can add to that, not only do they get tremendous amounts of money all the time in the coffers, they have their PACs give to PACs.
WALLISON: Yes.
LAMB: And the PACs end up serving the members.
WALLISON: Right.
LAMB: And then you have the foundation, which was shut down last year, which I want to ask you about. And then you have the advertising. They spent $75 million a year on advertising.
Why would these institutions have to advertise? Why would Fannie Mae or Freddie Mac have to spend $75 million on advertising?
WALLISON: A very good question. And in fact, until they ran into their financial difficulties, there were many in the financial world, including mortgage lenders, who believed that Fannie and Freddie were trying to get into the business of originating mortgages, and so, were trying to make themselves familiar to the American public in general as good guys.
So, they were doing a lot of kind of public service advertising, and trying to tell the American people that a Fannie Mae or a Freddie Mac mortgage would be something they should want.
They never did get into the mortgage origination business. They stayed in the business of buying mortgages from other lenders. But that was only because they ran into financial difficulties in the early 2000s.
That’s why they were advertising. And all of these payments to Congress, that’s only part of the story.
This was truly a culture of corruption. This is the kind of thing that, say, John McCain, who is running against the culture of corruption in Washington, can point to as a perfect example of what is wrong with this town.
These organizations were made out of federal backing, taxpayers’ backing. They were made into powerful organizations. And their executives and their shareholders took tremendous profits out of these companies � again, because of the backing of the shareholders.
They then took some of these profits, and they turned it over through campaign contributions to the people on the committees in Congress, who were supposed to be supervising them �
But out of the 70 members, 50 of them got (ph) money for their campaigns �
WALLISON: That’s right.
LAMB: � from Fannie Mae. And, of course, money from Freddie Mac.
But we can add to that, not only do they get tremendous amounts of money all the time in the coffers, they have their PACs give to PACs.
WALLISON: Yes.
LAMB: And the PACs end up serving the members.
WALLISON: Right.
LAMB: And then you have the foundation, which was shut down last year, which I want to ask you about. And then you have the advertising. They spent $75 million a year on advertising.
Why would these institutions have to advertise? Why would Fannie Mae or Freddie Mac have to spend $75 million on advertising?
WALLISON: A very good question. And in fact, until they ran into their financial difficulties, there were many in the financial world, including mortgage lenders, who believed that Fannie and Freddie were trying to get into the business of originating mortgages, and so, were trying to make themselves familiar to the American public in general as good guys.
So, they were doing a lot of kind of public service advertising, and trying to tell the American people that a Fannie Mae or a Freddie Mac mortgage would be something they should want.
They never did get into the mortgage origination business. They stayed in the business of buying mortgages from other lenders. But that was only because they ran into financial difficulties in the early 2000s.
That’s why they were advertising. And all of these payments to Congress, that’s only part of the story.
This was truly a culture of corruption. This is the kind of thing that, say, John McCain, who is running against the culture of corruption in Washington, can point to as a perfect example of what is wrong with this town.
These organizations were made out of federal backing, taxpayers’ backing. They were made into powerful organizations. And their executives and their shareholders took tremendous profits out of these companies � again, because of the backing of the shareholders.
They then took some of these profits, and they turned it over through campaign contributions to the people on the committees in Congress, who were supposed to be supervising them �
