1999: Iceberg Ahead
It’s 1999 and President Bill Clinton is pushing Fannie Mae to encourage banks to extend credit to those who do not deserve it. Franklin Raines, the head of Fannie Mae, is more than willing to comply.
Fast-forward to 2008, where Fannie Mae and Freddie Mac have essentially been taken over by the federal government and a government bailout is being debated. Raines has long since left Fannie Mae in disgrace, but not without first securing himself a multi-million dollar severance package.
He is now one of Barack Obama’s economic advisors.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980′s.
In other words, this failure was predicted. Full 1999 article linked below. Hat tip to BuzzBrockway.com.
Fannie Mae Eases Credit To Aid Mortgage Lending – New York Times
Categories: Loony Left, National, Politics & Government Tags: barack obama, bill clinton, fannie mae, franklin raines, freddie mac, government bailout
