The Tea Party movement has been accused of being run by racists and bigots and sexists and homophobes. Its members have been accused of being anti-science who don’t care if the world is burning to the ground.
The charges are false. In fact, when one looks at those making them and then follows the money, well, it is more often than not welcome to the Tea Party.
The spark for the movement was obviously Obamacare, the disaster that was predicted and is now coming to pass.
But there was plenty of kindling and maybe the biggest pile of it was the housing bust sparked by the misue of Fannie Mae and Freddie Mac.
Fannie Mae is the Federal National Mortgage Association which is a financial services corporation created by the U.S. Congress in 1938 to expand the secondary mortgage market by securitizing mortgages. The nickname comes from its acronym (FNMA)
Freddie Mac is Federal Home Loan Mortgage Corporation (FHLMC) It is also a “government-sponsored enterprise” and was created in 1970. Freddie Mac buys mortgages on the secondary market, pools them, and sells them as a mortgage-backed security to investors on the open market.
In 1992, the Housing and Community Development Act was passed and this mandated Fannie Mae to provide mortgages to low-income people who would otherwise be considered bad credit risks, which were then pooled by Freddie Mac.
Under the Clinton administration, these risky loans boomed. Now, Fannie and Freddie while “government sponsored” are publicly traded, although both are now over the counter as they were delisted by the New York Stock Exchange in 2010. Their officers are not government employees.
The expanded loans made it look like they were just doing great when it was doing anything but.
Harold Raines was the CEO of Fannie Mae. He made about $90 million in salary and bonuses. J. Timothy Howard was CFO and Leanne G. Spencer was controller. They also made money.
In December 2006, U.S. regulators filed suit against them seeking to recoup $115 million in bonus payments along with $100 million in penalties. In 2012, the suit was dropped. They got away with it.
Pretty good heist, right?
The bad loans at Fannie and Freddie cost the U.S. taxpayers between $224 and $360 billion in bailouts.
Bernie Madoff was a piker to these guys and he’s going to die in prison.
And that is just one more reason why there is a Tea Party and people are angry and suspicious of those running government.
