The intensity of the rabid attacks on Barack Obama is troubling. The issues grow more bizarre, the links to Obama grow more tenuous, and the shouts more shrill.
And that’s from the reasonable opponents of Obama.
For example, over at the oddly-named IUSB Vision Weblog (Indiana University – South Bend), there is much yammering about how Barack Obama personally is responsible for the sub-prime mortgage industry collapse, because he represented an ACORN client in a redlining case and won the decision from the judge.
From there, the story trails off into a rabbit warren of wild conspiracy theories and the granting of supernatural powers to Obama (though the authors wouldn’t admit it’s supernatural). For example, there is this post about a letter Sen. McCain signed urging some action on oversight of federal mortgage refinancers.
The authors stoutly defend their bizarre claim that Congress is the agency responsible for the regulation of Fannie Mae and Freddie Mac through the OFHEO, Office of Federal Housing Enterprise Oversight. Congress maintains its usual oversight over the executive branch agency, but it is, after all, an executive branch agency. Think about your high school civics classes: Separation of Powers, Checks and Balances.
Congress is not the superintendent of OFHEO
Here is OFHEO’s mission statement — notice no reference to being in Congress’s chain of command:
OFHEO’s mission is to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation). OFHEO works to ensure the capital adequacy and financial safety and soundness of two housing government-sponsored enterprises (GSEs) — Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are the nation’s largest housing finance institutions. They buy mortgages from commercial banks, thrift institutions, mortgage banks, and other primary lenders, and either hold these mortgages in their own portfolios or package them into mortgage-backed securities for resale to investors. These secondary mortgage market operations play a major role in creating a ready supply of mortgage funds for American homebuyers. Combined assets and off-balance sheet obligations of Fannie Mae and Freddie Mac were $4.2 trillion at year-end 2005.
Fannie Mae and Freddie Mac are Congressionally-chartered, publicly-owned corporations whose shares are listed on the New York Stock Exchange. Under terms of their GSE charters, they are exempt from state and local taxation and from registration requirements of the Securities and Exchange Commission. Each firm has a back-up credit line with the U.S. Treasury.
OFHEO’s oversight responsibilities include:
Conducting broad based examinations of Fannie Mae and Freddie Mac; Developing a risk-based capital standard, using a “stress test” that simulates stressful interest rate and credit risk scenarios; Making quarterly findings of capital adequacy based on minimum capital standards and a risk-based standard; Prohibiting excessive executive compensation; Issuing regulations concerning capital and enforcement standards; and Taking necessary enforcement actions.
OFHEO is funded through assessments of Fannie Mae and Freddie Mac. OFHEO’s operations represent no direct cost to the taxpayer. In its safety and soundness mission, OFHEO has regulatory authority similar to such other federal financial regulators as the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Board of Governors of the Federal Reserve System.
The legislation that established OFHEO also requires Fannie Mae and Freddie Mac to meet certain affordable housing goals set annually by the Secretary of Housing and Urban Development. These goals specify the share of mortgages that the two GSEs are required to purchase annually from low-income, moderate-income and central-city homebuyers.
And, explaining its role in mortgage refinance regulation:
OFHEO was established as an independent entity within the Department of Housing and Urban Development by the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (Title 13 of P.L. 102-550). The agency is headed by a Director appointed by the President for a five-year term.
OFHEO’s primary mission is ensuring the capital adequacy and financial safety and soundness of two government-sponsored enterprises, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Fannie Mae and Freddie Mac are congressionally-chartered, publicly-owned corporations whose shares are listed on the New York Stock Exchange.
Fannie Mae and Freddie Mac are the nation’s largest housing finance institutions. They buy mortgages from commercial banks, thrift institutions, mortgage banks, and other primary lenders, and either hold these mortgages in their own portfolios or package them into mortgage-backed securities for resale to investors. These secondary mortgage market operations play a major role in creating a ready supply of mortgage funds for American homebuyers. Combined assets and off-balance sheet obligations of Fannie Mae and Freddie Mac were more than $4.2 trillion at year-end 2005, which represents over 40 percent of mortgages outstanding.
In fulfilling its role in the secondary mortgage market, OFHEO promotes housing and a strong national housing finance system.
OFHEO’s oversight responsibilities include the following:
– Conducting broad-based and targeted examinations of Fannie Mae and Freddie Mac
– Making quarterly findings of capital adequacy based on a minimum capital standard and a risk-based capital standard
– Administering a risk-based capital standard, using a “stress test” that simulates interest rate and credit risk scenarios
– Prohibiting excessive executive compensation
– Issuing regulations concerning capital and enforcement standards
– Taking necessary enforcement actions
– Issuing an annual Report to Congress on the financial and operational condition of the EnterprisesOFHEO is funded through assessments on Fannie Mae and Freddie Mac. OFHEO’s operations represent no direct cost to the taxpayer.
The website for the agency is clear that it resides in the Department of Housing and Urban Development (HUD), though it is an independent agency whose director is appointed by the president for a five-year term. When I posted this information at IUSB Vision, however, it was censored. Instead, I got this charming response from the immoderator:
Ed – Stop lying,
You did not read the links. You need to start reading at OFHEO.gov and go and read the links I provided. OFHEO reports to Congress, not the administration. It is a fact. Deal with it. All you have to do is go read on their site THEY will tell you.
Charming fellow. He has censored all of my comments since then. At one point he was lecturing me that I didn’t know the organization. I pointed out to him that the Constitution makes clear the lines of organization in this case: OFHEO is an independent agency within the executive branch. It works closely with the Secretary of HUD. The organization charts show it is not a Congressional agency.
Similarly, this fellow is convinced that Obama, as a lawyer, made the federal courts dance to his tune. He appears to have no understanding for how federal courts work, nor for how a federal judge would regard any attorney acting as arrogantly as they claim Obama did.
Object lesson: You cannot reason a person out of a position he did not get to by reason in the first place.
Election, come soon!
Resources:
- Froma Harrop’s column of a couple weeks ago noting CRA and low-income mortgages did not cause the meltdown
- Today’s Nobel Economics Prize winner Paul Krugman, three years ago explaining the collapse of the housing bubble, “That Hissing Sound.”
Millard Fillmore's Bathtub 
Greddy lenders and mortgage companies started the “Mortgage Crisis” now there going to try to cash in again on refinancing because rates are at a low time low. Thanks for the info though. Im going to bookmark your site and come back. Check my blog at http://www.refinancingcondo.com
LikeLike
No, I’m not a doctor, not yet :) I don’t want to tempt fate!
LikeLike
[…] Obama didn’t start the sub-prime mortgage crisis […]
LikeLike
Whom the gods destroy, they first make mad.
First I went to your site and posted a piece pointing out a couple of significant broken links in your chain of arguments. Then, a few minutes later, I discovered taht the website you cited specifically rebutted your claim — the website said the opposite of what you said (it points out that OFHEO is part of the executive branch). And then I found a couple of other sites that pointed out other errors.
How can a quote from the site you cited as authoritative be a lie by me?
DMr. Salt is right. In your scenario there is more power in a young Barack Obama to twist the mortgage industry to his whims than in the presidency. You fail to mention, IUSB, that the Justice Department joined Obama in his brief, because they, too, were concerned about the racial inequities in the system which the anti-redlining law was designed to fix.I may come back and address this farther — it’s been a long night out with the Scouts — but I gotta say that if you think my posts are nonsense, your best bet is to let them stand rather go all Peoples Republic of China on them and fail to post them at all.
My suspicion is that you recognize I’m right, and that’s why you fear to post the sequence of arguments, which could not be construed as spamby any fair minded person (hey, if you really wanted to push your point, you’d welcome the traffic at your blog).
The nonsense is not on this side. Pay attention to Alun’s remarks, and see if you can figure out why it is that I chalk your description of Obama’s powers over the federal courts as supernatural.
Santayana hasn’t given up on you yet. You’re young. You can learn.
LikeLike
The IUSB Vision started as a student club at IU-South Bend a couple of years ago. From I can tell, the club has disbanded, and all that is left is the blog. Initially the club and blog were about campus student clubs, but the blog quickly became dominated by Chuck Norton.
It appears that Chuck is now the only person involved with the blog. He sometimes refers to himself by his actual name, sometimes as editor and occasionally refers to a moderator as if there is a separate moderator. He has used language similar to, “I’ll ask the moderator to…”, but I’m pretty sure it is all just him. Some articles refer to Chuck Norton as if the author is not Chuck, but again, I suspect that is Chuck writing in the third person.
I don’t believe the IUSB Vision currently has a connection to the university, other than that Chuck Norton is a student there. Based on previous careers that he’s mentioned on the blog it seems that he’s probably in his late 30’s or early 40’s. I don’t know if is seeking a degree or not.
I read the blog quite regularly for perverse entertainment. I’ve never seen such a clear demonstration of anti-rationalism coupled with such prolific output. I generally assume a strong correlation between anti-rationalism and anti-intellectualism, and that such individuals wouldn’t take the time to read and write. Chuck, however, apparently reads and writes quite a bit, but displays an awe-inspiring inability to draw rational conclusions based on evidence.
His hypocrisy is also impressive. He seems to take great pleasure in labeling those with whom he disagrees as ideologues, yet even tour through his blog reveals an unflinching right-wing ideology. He also frequently refers to the “Stalinist” tactics of the left wing academic elite in terms of censoring speech, yet as you’ve found he’s quick to edit or even delete posts that he doesn’t like based on his unilateral opinion. The posting policy on the blog has also changed over time in a manner that very much reminds me of 1984.
You’re way ahead of the game by recognizing the Object Lesson so early: “You cannot reason a person out of a position he did not get to by reason in the first place.”
LikeLike
I’m baffled. Let’s assume for the sake of argument that iusbvision is right. If that’s the case why are both political parties wasting their time on such a minor office like Presidency when the real power lies with lawyers in Illinois?
I think he may be confused in his reading. OFHEO does indeed report to Congress e.g. (http://www.ofheo.gov/AnnualReports.aspx), but the reports themselves make it clear that they are under the President and the Secretary of Housing and Urban development, hence this disclaimer from the 2008 report: “The views in this report are those of OFHEO and do not necessarily represent those of the President or the Secretary of Housing and Urban Development.” If they weren’t under this chain of command then this disclaimer would not be necessary.
Most puzzling of all is how could someone who supports the party which has been in power so long be so angry? If you look at his comments inserted into other peoples comments, he is really really upset.
LikeLike
This is how Ed reported our story on his blog –
No where did we say any of these things
As we have said in our many writings analyzing this matter the series of ACORN harassment lawsuits and intimidation thuggary against banks to get them to lower credit standards was just one more important layer of many that became the mortgage crisis and the largest financial scandal in the history of the world.
Perhaps I was mistaken to try and talk reason and facts with a far left ideologue, but at least it provided a few minutes of good entertainment.
LikeLike
Nice Ed,
First you come to my site and lie, than you post the same things over and over like a spammer forcing me to delete some of the repetitive nonsense, and now you are lying about what I said, and now you are misrepresenting what a GSE is on your own site.
If anyone wants to see the truth feel free to come over, I address all of his arguments on our site. Not to mention we posted testimony from OFHEO and Alan Greenspan that verifies all we said.
As we have indicated before, OFHEO has two missions.
An affordable housing mission that reports to HUD, but has no real enforcement power and a mortgage finance mission that has almost no enforcement power and reports to the finance committee’s in Congress.
OFHEO is paid for by Fannie Mae and Freddie Mac and is not paid for by the tax payer.
Your point about separation of powers would be true for a real constitutional agency, but Fannie Mae, Freddie Mac and OFHEO are a part of the GSE system and are not real constitutional agencies as authorized by Congress under Article I Section VIII.
Most of the mortgage industry debt is managed by GSE’s which are unique animals in government being part government and part private. That is why GSE’s do not follow the standard separation of powers as they were set up. GSE’s are almost certainly unconstitutional to begin with, so it is no surprise that their monitoring and enforcement are not typical as well.
OFHEO has begged Congress year after year to have itself replaced by REAL banking regulators with REAL enforcement power either under the Federal Reserve or the Treasury Department.
The OFHEO has testified to this and we have linked to the testimony. Alan Greenspan has testified to this and we have linked to that testimony.
OFHEO has begged Congress year after year to be replaced by an agency with REAL banking regulator powers and authority. Barney Frank and his crew tried to stop it in the House in 2005 but Republicans had enough votes to push it through that year. Democrats in the Senate unanimously voted no and blocked in there year after year because Republicans did not have 60 votes to beat the filibuster.
Here is one example of many of OFHEO asking to be replaced by REAL banking regulators.
Legislation
OFHEO has continued to strongly support enactment of legislative reform to strengthen GSE oversight. During the past year, the agency worked with the Bush Administration, Congress and interested parties on legislation that will provide bank regulator-like powers to a new GSE regulator overseeing Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
Click to access OFHEOPARNovember2007508.pdf
But again if you would have just read the links we provided you, you would have known all of this already.
LikeLike