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Bipartisan opposition killed bailout bill

Posted by Richard on September 30, 2008

The Paulson power grab, a.k.a. the $700 billion bailout bill, was defeated in the House today, 205-228. Both sides are blaming partisanship and pointing fingers. But when I look at the voting breakdown — 95 Democrats and 133 Republicans voted Nay — I see a pretty bipartisan rejection of this ugly monstrosity.

As for the man behind the massive bailout, Hank Paulson, he's nominally a Republican, but his plan appeals to Eastern country-club Republicans and establishment liberal Democrats — the big-government types who have cozy symbiotic relationships with the big-finance types on Wall Street.

In fact, Paulson has been more in tune with liberal Democrats than Republicans, and that's not a new development. About a year ago, Bob Novak pointed out that Paulson had put two strong Democrats — former associates from Goldman Sachs — into important positions at Treasury. Novak also noted that Paulson himself, although a big Bush fundraiser in 2004, had also contributed to Clinton, Schumer, Bill Bradley's presidential campaign, and the very liberal Emily's List. 

Michelle Malkin collected some statements from Paulson over the last 18 months regarding the subprime mortgage mess. They don't reflect well on his financial acumen and judgment.

Paulson isn't the only person who's been denying that there was any problem with subprime mortgages. Democrats have successfully fought off repeated efforts to reform and regulate Fannie Mae and Freddie Mac since 2001. Here's a 3½-minute special report from Fox News summarizing the 8-year history of ignored warnings and failed efforts to stop the impending crisis. 

 

Here's an 8½-minute compilation of C-SPAN clips from a 2004 hearing into Fanny and Freddie. The regulator warns of the inevitable collapse, while Democrats denounce the critics, defend the agencies, and insist there's nothing wrong. Near the end, Franklin Raynes himself insists that Fannie's subprime mortgages have "zero risk."

 

Sen. McCain warned in 2006 about the "enormous risk" that Fannie and Freddie posed to the economy, but Democrats blocked his reform and oversight bill.

 

Plenty of people in both major parties benefited from Fannie and Freddie's house of cards. But virtually all the people enriching themselves on the inside were Democrats (Raines, Johnson, Gorelick, Mudd). And the majority of the politicians raking in big contributions and using the easy credit scam to further their political careers were Democrats (Dodd, Kerry, Obama, Clinton).

It's more than a bit unseemly for Sen. Obama (who took $105,000 from Fannie and Freddie in just 2 years) to blame the mess on the "failed Bush policies."

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