Dr. Frankenstein at Fannie

By David Freddoso

If Barack Obama is so concerned about the current economic crisis, why is he consulting those who played such a large role in causing it? That question came up again when Ben Smith of the Politico reported last month that Jim Johnson, former CEO of Fannie Mae, would be delivering an Obama campaign briefing to a group of Democratic luminaries, mostly former members of Hillary Clinton’s campaign brain-trust today.

Jim Johnson served as Fannie’s CEO from 1991 to 1998 and since then has served as a consultant to the company with a lucrative $600,000 annual contract. A Minnesotan who once served as an aide to Vice President Walter Mondale and made a career on Wall Street, Johnson received some publicity for his brief stint with the Obama campaign’s vice-presidential vetting operation earlier this year. Despite the fact that Johnson had helped choose running mates for Mondale and for John Kerry, Obama brought him on for this process anyway. Johnson had to quit that unpaid position, however, after the Wall Street Journal revealed that he’d accepted $5 million in loans from the now-defunct company Countrywide Home Loans — loans made outside of the company’s normal underwriting channels.

Countrywide had been an official partner of Fannie Mae, selling most of its loans to Fannie. It was one of the prime offenders in making bad mortgage loans; it was also one of the first dominoes to fall in the sub-prime crisis, and Barack Obama had denounced the company by name. Johnson was one of those who had received sweetheart loans in part of a program for friends of Angelo Mozilo, Countrywide’s CEO.

But Johnson’s time at Fannie Mae, which was founded in 1938, is also very interesting to study. Fannie, along with Freddie Mac, is a critical institution in today’s crisis of economic confidence. These institutions have historically controlled about half of what is called the “secondary mortgage market,” where mortgages are rolled into securities and re-sold in large packages to investors -- usually banks or other large financial institutions. This is how bad loans made their way from Main Street to Wall Street.

Prior to the crisis, Fannie and Freddie dominated the secondary mortgage market thanks in large part to the special tax exemptions and regulatory advantages they enjoy over competing private institutions. They do not have to keep as much money in reserve as do banks. They are exempt from taxes. Prior to their recent takeover by the federal government, they had a $4.5 billion line of credit with the U.S. Treasury. The implicit government guarantee behind the two companies made it possible for them to borrow money more cheaply than others.

Beyond these advantages, U.S. bank regulators gave preference to Fannie and Freddie debt, allowing banks to hold it instead of just government bonds and cash as part of their “tier-one capital” -- the rainy-day funds that banks are required to keep on hand in case all else fails. This encouraged American banks to accumulate more than $1 trillion in GSE-related securities by 2004, according to the FDIC, and kept Fannie and Freddie flush with cash -- for a time, anyway.

The Washington Post and Fortune magazine have reported on Johnson’s most important work -- the creation of Fannie’s clout machine in Washington and on Capitol Hill. Johnson, a true believer in Fannie’s role of expanding homeownership to less credit-worthy individuals, honed the company’s response to criticisms of its mission and its special advantages in the market. In order to ramp up Fannie’s lobbying operation, Johnson hired powerful Democratic and Republican staffers when they left the government.

Beginning in 1994, he established field offices for grassroots lobbying—“Partnership Offices,” they were called—from which Fannie operatives pressured uncooperative politicians. His strategy was to demonize anyone who worked against his goals as an enemy of affordable housing.

Johnson was never implicated in the accounting scandal that ensued immediately after he left Fannie, but his role at the company was to create an expensive noise machine, a lobbying operation that would spend $94 million over the following nine years under his successor, Franklin Raines. When Fannie’s accounting irregularities, which began in 1998, became known to members of Congress in 2003, Raines would set Fannie’s massive influence-machine to work in an effort to discredit the company’s regulators.

What Johnson had created in order to defend the principle of “affordable housing” would be used to shout down critics of Fannie Mae at a time when they needed to be heard -- as they helped plunge America into its current crisis of liquidity and confidence.

On "Glenn TV" this week, Megyn Kelly, host of the "Megyn Kelly Show," told Glenn Beck she believes the Democrats' talk of unity is "all nonsense" and forecasted the "death of journalism" under a Biden administration.

Megyn cited President Joe Biden's unwillingness to make concessions that would help unify Democrats and Republicans as an example of how much he actually cares about unity, and added that, while she's all for lowering the political temperature in America, she also believes there are some personal freedoms that are worth fighting for.

"What's happening substantively is worth fighting for and it's not going to go away just because [Biden] gave a nice speech," Megyn said.

"I will object. I will protect my family and what I think is right over Joe Biden's need for unity, which is false anyway. 'Unify behind my agenda' is not a real call for unity," she added.

Megyn said she believes the Left has reached too far and "awakened a sleeping giant" in reference to the silent majority who should speak up, speak out, and refuse to be silenced any longer.

Watch the video clip below to catch more of the conversation:

Because the content of this show is sure to set off the censors, the full episode is only be available on BlazeTV. Get $30 off a one-year subscription to BlazeTV with the code "GLENN." With BlazeTV, you get the unvarnished truth from the most pro-America network in the country, free from Big Tech and MSM censors.

As the Senate prepares for former President Trump's second impeachment trial, many are asking whether it's constitutional to try a president after leaving office. Alan Dershowitz, lawyer and host of the of "The Dershow," joined Glenn Beck on the radio program to talk about the legal battles Trump still faces.

Dershowitz said he believes the Senate doesn't have the authority to convict Trump, now that he's a private citizen again, and thus can't use impeachment to bar him from running for office again.

"The Constitution says the purpose of impeachment is to remove somebody. He [Trump] is out of office. There's nothing left to do.
It doesn't say you can impeach him to disqualify him for the future. It says, if you remove him you can then add disqualification, but you can't just impeach somebody to disqualify them," Dershowitz said.

"The Senate can't try ordinary citizens. So once you're an ordinary citizen, you get tried only in the courts, not in the Senate. So it's clearly unconstitutional," he added.

Dershowitz, who served on Trump's legal team during the first impeachment trial, also discussed whether he thinks Trump is legally (or even just ethically) responsible for the Capitol riot earlier this month, and whether those engaging in violence could be considered "domestic terrorists."

Watch the video below to catch more of the conversation:

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A new, shocking CBS News poll shows that the majority of Americans believe they're facing a new enemy: other Americans.

More than two-thirds of poll respondents said they believe democracy in the U.S. is "threatened," and 54% said "other people in America" are the "biggest threat to the American way of life," rather than economic factors, viruses, natural disasters, or foreign actors.

Will it be possible to unite our nation with statistics like that? On "The Glenn Beck Radio Program," Glenn and Stu discussed the poll numbers and what they mean for our future.

Watch the video clip below:


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Countless leaders on the left are now arguing that removing President Donald Trump from office won't be enough — they're now calling for the president's "cult-like" supporters to be "deprogrammed." And it's not just fringe politicians.

During an appearance on "Real Time with Bill Maher" last week, former NBC anchor Katie Couric said, "The question is, how are we going to really almost deprogram these people who have signed up for the cult of Trump."

Former Democratic presidential nominee Hillary Clinton and Democratic Speaker of the House Nancy Pelosi questioned whether the nation needs "a 9/11-type commission" to determine whether President Trump was colluding with Russian President Vladimir Putin "the day that the insurgents invaded our Capitol." Clinton also made sure to include her favorite "deplorables" in her unsubstantiated conspiracy theory:

"But we now know that not just [Trump] but his enablers, his accomplices, his cult members, have the same disregard for democracy," Clinton said to Pelosi.

Washington Post columnist Eugene Robinson and New York Times Magazine's Nikole Hannah-Jones agreed that there is a need for "millions of Americans, almost all white, almost all Republicans" to be deprogrammed and punished, during an MSNBC interview last week.

Now, a story from the Washington Post is also preaching that narrative and even added that we need more restrictions for conservatives on social media and in the broadcast industry.

"So now we have to be deprogrammed? We've heard this over and over and over and over again, for months," said Glenn Beck on the radio program Tuesday. He read through the shocking details of the Washington Post op-ed and discussed the extraordinary dangers of the latest anti-conservative movement in America.

Watch the video below:

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