IndyMac Bankrupted For Failing Pay Protection Money

by Hans Bader on July 18, 2008 · 15 comments

in Economy, Legal, Politics as Usual

In the Washington Examiner, Tim Carney has a priceless column entitled “IndyMac forgot to pay protection money.”  Liberal Senator Charles Schumer triggered a massive bank failure at IndyMac by scaring depositors into making a run on the bank.  Ironically, Schumer and his political allies, Congressman Barney Frank and Senator Chris Dodd, have whitewashed financial problems at another shaky financial institution that poses a much bigger danger to our economy, the fraud-ridden government-backed mortgage giant Fannie Mae.  The federal government is now planning to bail out Fannie Mae at a cost of billions of dollars.  Why was IndyMac’s treatment so different from Fannie Mae’s?  Carney explains that Fannie Mae has been run by a succession of liberal power-brokers, and its PAC has given lots of money to lawmakers to block any reform of its risky practices.  Liberal lawmakers like Schumer, Dodd, and Frank opposed any reform of Fannie Mae, and helped spawn the mortgage crisis by pressuring lenders into making risky loans in the name of “diversity” and “affordable housing.”

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