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.

Roger Stone is kind of a scumbag but the outrage over his commutation by President Trump has gone off the rails. Thus far in his presidency, Trump has commuted the sentence for 11 individuals while in comparison, Bill Clinton had 61. Even worse, Barack Obama commuted the sentence of 1,715 criminals! Just by the numbers, the outrage is insane. But then add in that both Obama and Clinton commuted or pardoned the sentence of terrorists and/or "friends" of the the president and the double standard is outrageous.

Here is a list of just a few of the worst offenders:

Bill Clinton Pardons/Commuted sentences

Terrorists

  • Commuted the sentences of 16 members of the FALN, a Puerto Rican paramilitary organization that set off 120 bombs in the United States, mostly in New York City and Chicago. There were convictions for conspiracy to commit robbery, bomb-making, and sedition, as well as firearms and explosives violations.
  • Linda Evans and Susan Rosenberg were both commuted and both were members of Weather Underground and the May 19 Communist Movement, and were convicted on weapons and explosives charges.

Case similar to Trump/Roger Stone

  • Susan McDougal was sentenced to 18 months in prison on contempt charges for refusing to testify about Clinton in the Whitewater scandal only to have Clinton pardoned her.

Pardons/commutations that look like a response to bribes

  • Carlos Vignali was convicted for cocaine trafficking. Almon Glenn Braswell was convicted for mail fraud and perjury, and was under investigation for money laundering and tax evasion. Vignali was commuted while Braswell was pardoned, but they were also both caught paying approximately $200,000 to Hillary Clinton's brother, Hugh Rodham, to represent their respective cases for clemency.
  • Marc Rich fled the U.S. after he was caught owing $48 million in taxes and was charged with 51 counts for tax fraud. Everyone was surprised when Clinton pardoned him. It was later revealed that Rich's wife made substantial donations to both the Clinton library and to Hillary Clinton's senate campaign.

Pardon for a member of Clinton's family

  • Clinton pardoned his brother, Roger Clinton, who had been convicted on drug charges. A year after the pardon he would be charged for Drunk driving and disorderly conduct.

Drug Cartel lawyer

  • Clinton commuted the sentence for Harvey Weinig, a former NY lawyer who was sentenced in 1996 to 11 years in prison for facilitating an extortion-kidnapping scheme and helping launder at least $19 million for the Cali cocaine cartel.

Obama Pardons/Commuted sentences - the most since Truman: Obama granted clemency to nearly 2,000 individuals, including 212 pardons and 1,715 commutations.

Terrorist

  • Obama commuted the sentence of another FALN terrorist, Oscar Lopez Rivera.

Traitors

  • Chelsea Manning: the former Army Intelligence analyst was convicted of leaking documents that revealed classified information on military and diplomatic activities all around the world only to have her sentence commuted.

Case similar to Micheal Flynn or Roger Stone

  • Obama pardoned General James Cartwright, who had been convicted for lying to the FBI (sound familiar?!). Cartwright was considered "Obama's favorite general".

On his Wednesday night special, Glenn Beck goes where the Left and the media don't want us to go. The protests, riots, pandemic — it's all one big distraction being weaponized to shield the Deep State from the big reveal.

The case against General Michael Flynn is bigger than a phone call with the Russian ambassador; it exposes everything. Glenn reveals multiple cogs in the Deep State wheel that tried to destroy Donald Trump's presidency.

This story has everything: secret meetings, spies, glamorous European locations. Glenn puts all of the pieces together and interviews the man who was an eyewitness to all of it — former Trump campaign adviser George Papadopoulos. Specifically targeted by this Deep State coup, his reputation and life may never be the same. He reveals the names of those he believes were behind his setup and the coup against the president.

Watch a preview of the full episode below:


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The Washington Post wants Native Americans to hate the name "Washington Redskins" so badly that that it is willing to mock its own study that proved otherwise.

On the radio program Tuesday, Pat Gray and Stu Burguiere (filling in for Glenn Beck) discussed the "woke insanity" of the WaPo's most recent poll, which, like its 2016 counterpart, found that the vast majority of Native Americans are not offended by the NFL team's name.

Watch the video below for all the details:


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As the left tries to erase America's history and disparage nearly everything about our nation's founding, Glenn Beck set the record straight about the Declaration of Independence, what it really says, and why he believes it is the "greatest mission statement of all time."

On the radio program Monday, Glenn read something you've probably never heard before: a section of the earliest known draft of the Declaration of Independence, written by Thomas Jefferson in July 1776 and lost for more than a century and a half.

"This wasn't found until 1947; the original draft of the Declaration was found in a bunch of Thomas Jefferson's writings, in a box in the Library of Congress," Glenn said. "This takes everything that you have learned about Thomas Jefferson and turns it upside down. It also explains why we didn't eliminate slavery. It also explains that our Founders felt passionately about slavery, that they tried to end slavery. I want to read just this paragraph to you. This changes absolutely everything."

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