The federal government has no problem paying exorbitant sums of money to people who head failed government agencies like Freddie Mac. Its CEO will receive compensation estimated at $5.5 million. The Federal Housing Finance Agency took direct control over Freddie Mac, a government-sponsored enterprise, after it ran up tens of billions of dollars in red ink buying risky mortgages, without adequate capital reserves. At the direction of the Obama administration, Freddie Mac is now running up $30 billion in losses to…

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The mortgage meltdown was caused partly by the government, which created an artificial market for bad mortgages.  The Washington Examiner cites a recent study by Peter Wallison, who had prophetically warned about risky financial practices for years, finding that two-thirds of all bad mortgages were either “bought by government agencies or required to be bought by private companies under government pressure.” Now, the Federal Housing Administration is ramping up its purchases of low-quality mortgage loans, threatening taxpayers with hundreds of billions of dollars…

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Veteran political commentator Michael Barone reports that liberal congressional leaders are pushing policies to “inflate the housing bubble again,” even though “our financial system broke down because we had, thanks to government policies, a housing bubble.”

Congressional leaders are ignoring warnings from experts across the political spectrum, such as conservative Peter Wallison’s October 16 piece in the Wall Street Journal, titled “Barney Frank, Predatory Lender,” and liberal Charles Lane’s recent piece in the Washington Post, “Doubling Down On the Wrong Housing Policy.”  (Wallison, a banking expert, prophetically…

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George Mason University Professor Ilya Somin explains how the Obama administration is expanding the awful policies that caused the mortgage crisis, like having taxpayers effectively underwrite risky-mortgage loans by bailing out GSEs at a cost of hundreds of billions of dollars.  Now, the administration is stepping up Federal Housing Administration subsidies for risky, junky mortgage loans that are likely to default in large numbers.

(The Obama administration doesn’t seem to have learned history’s lessons overseas, either.  White House Communications Director Anita Dunn cites as…

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President Obama is now pushing financial regulations that reinforce the worst features of the status quo.  They would actually increase regulatory pressure on lenders to make the risky, low-income loans that helped spawn the financial crisis.  At the same time, they would worsen the credit crunch by shutting down banking operations in retail outlets like Target, known as “industrial loan corporations,” that are convenient for consumers.  Earlier, Obama backed a new law that is wiping out many credit-card rewards programs and rebates, and leading…

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The mortgage crisis was caused largely by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax cheat Timothy Geithner, even though he admits that “Fannie and Freddie were a core part of what went wrong in our system.” Worse, Obama’s plan is “largely the product of extensive conversations” with two lawmakers responsible for the corrupt status quo, Chris Dodd and Barney…

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The federal government is perpetrating Enron-style fraud against investors in its bailouts of Merrill Lynch and Freddie Mac.

The Treasury Secretary and Chairman of the Federal Reserve forced the CEO of Bank of America to merge his bank with failing Wall Street investment bank Merrill Lynch — and pressured him to keep the resulting losses secret, violating investors’ rights under the securities laws.

“Federal Reserve Chairman Ben S. Bernanke and former Treasury secretary Henry M. Paulson Jr. threatened to remove the…

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The chief financial officer of mortgage giant Freddie Mac committed suicide today in his basement. The Obama Administration forced Freddie Mac to run up billions of dollars in losses to bail out mortgage borrowers, including irresponsible high-income households with modest mortgages.

Until last year, Freddie Mac was a GSE — a Government Sponsored Enterprise, an entity chartered and subsidized by the federal government, but owned by private shareholders. But the federal government seized direct control of Freddie Mac last year after it ran up big…

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The Obama Administration wants to convert the preferred shares the government got from banks in the bank bailout into common shares. In theory, it could help expand lending, but in practice, it could politicize the banks, harm the economy, and waste taxpayer money.

Common shares, unlike preferred shares, vote on who manages the company. The Government could use its votes to make banks waste money on ideological causes — the way it recently did with Freddie Mac, in order to promote mortgage…

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In a letter in today’s Wall Street Journal, CEI’s Fred Smith references Steven Gjerstad and Vernon Smith’s earlier op-ed to point out that radical egalitarianism policies have been one of the driving forces behind the housing bubble and the resultant financial crisis.  As Fred notes,

Steven Gjerstad and Vernon Smith suggest one unexplored aspect of our financial crisis: the role of egalitarian policies. To see this, note their distinction between the impacts of the $10 trillion loss in the 2000 stock market…

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After federal regulators took over failing mortgage giant Freddie Mac, they didn’t stop its risky lending practices. Instead, they ramped up its risk-taking, making it run up even bigger debts at taxpayer expense to try to artificially pump up the economy. They made Freddie buy countless risky mortgage loans. Recently, the Obama Administration forced it to incur $30 billion in losses as part of the administration’s bailout for irresponsible mortgage borrowers, which caps mortgage payments for even high-income borrowers at a ridiculously…

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It’s not just AIG, being bailed out for $170 billion, that’s using taxpayer money to give fat bonuses to its employees. The same thing is happening at Fannie Mae and Freddie Mac, the fraud-ridden “Government-Sponsored Enterprises” that helped spawn the mortgage crisis, and now are being bailed out at a cost of over $200 billion.

Before publicly blasting million-dollar bonuses at AIG, the Obama administration privately signed off on those very bonuses, and included language in the economy-shrinking “stimulus” bill to protect those bonuses. (AIG gave over…

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The Treasury Department wants the federal government to effectively buy up all mortgage loans in America, by selling treasury bonds to buy up mortgage-backed securities. In exchange, lenders would have to charge a ridiculously low interest rate of 4.5% for a 30-year mortgage, which is lower than inflation in many years, and way lower than people with even perfect credit receive now.

The Treasury proposal will put taxpayers on the hook for tremendous potential losses if borrowers default, with little upside,…

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Freddie Mac & Fannie Mae were the catalyst for our current financial crisis. By buying up risky sub-prime mortgages, Freddie & Fannie encouraged banks to make risky loans to folks who otherwise wouldn’t have received mortgages.

Freddie & Fannie did this because they had the backing of the U.S. Treasury.  The executives at Freddie/Fannie knew that if they made a bad move and lost billions in the market, the government would bail them out.

This notion was laughed at a few years ago…

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Obama has appointed as his chief of staff Rahm Emanuel, a former director of the failed government-backed mortgage giant Freddie Mac, which had to be bailed out by taxpayers. It’s perhaps not surprising, given that Obama was the second-largest recipient of campaign contributions from Fannie Mae and Freddie Mac, the government-sponsored mortgage giants that helped spawn the mortgage meltdown and financial crisis. Emanuel was the money man for the Chicago Democratic machine under Mayor Richard Daley, and is famous for his…

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Tune in to lucky episode thirteen of the best pro-freedom podcast around, CEI’s very own LibertyWeek, with your hosts Richard Morrison and Cord Blomquist.

This week we cover everything from the Twitter revolution and falling oil prices to Sen. Ted Stevens’ corruption trial and Iain Murray’s Fannie-fueled cyber-fight with Matt Yglesias. Also listen for new audio effects created by LibertyWeek Technical Producer Ryan Young.

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In the Washington Post, Peter Schiff describes how politicians spawned the current financial crisis.  “Our leaders irrationally promoted home-buying, discouraged savings, and recklessly encouraged borrowing and lending, which together undermined our markets.”  “Policies enacted by the Federal Reserve, the Federal Housing Administration, Fannie Mae and Freddie Mac (which were always government entities in disguise), and others created advantages for home-buying and selling and removed disincentives for lending and borrowing. The result was a credit and real estate bubble that could only grow…

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Even the reliably-liberal BBC says that deregulation wasn’t the cause of the financial crisis.   Other liberal journalists like Washington Post columnist Sebastian Mallaby have made the same point.

The government-sponsored mortgage giants Fannie Mae and Freddie Mac played a big role in spawning the mortgage crisis.  Lawmakers like Barney Frank blocked crucial reforms that might have reined them in.  Now, Frank is trying to change the subject, claiming that critics of Fannie and Freddie are, you guessed it, racist.  (Fannie Mae also engaged in…

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Banking expert Peter Wallison explains why deregulation didn’t cause the financial crisis, while Steven Malanga explains how government regulators foolishly pressured banks to drop prudent lending criteria as “discriminatory,” resulting in risky lending that caused the crisis. 

Peter Wallison was one of the few people who warned for years about the risky practices of the government-sponsored mortgage giants, Fannie Mae and Freddie Mac, which helped spawn the mortgage crisis.  Liberal Congressional leaders turned a deaf ear to his pleas for reform, blocking reform legislation and claiming that the leadership of the fraud-ridden…

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Oh, Happy Day! And it certainly is for all those who value freedom, responsibility and the true free market in which individuals are free to profit from their risks on the condition that they don’t stick the rest of us with their losses.

It’s not hyperbole to say the Republican and Democratic backbenchers who defied both parties’ leadership to defeat this $700 billion package of Wall Street socialism literally saved America. Whatever their reasons, this defeat (or rather victory for freedom),…

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