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Truth Comes Out at Financial Crisis Hearings; State-Run Media Ignores

BEGIN TRANSCRIPT

RUSH: You know, folks, we've been telling you, Alan Greenspan has been testifying in front of this committee, this blue ribbon bunch looking into the financial crisis. It's led by Phil Angelides, who I know, from Sacramento, ran for governor of California, didn't make it. And the Republican on the committee, lead Republican is Bill Thomas, former Ways and Means chairman, good guy from California. Now, Greenspan went up there -- at the end of their careers or when they know that they're not depending on the town anymore and they're not depending on all the players in the game for their reputation, they can tell the truth. And Greenspan went up there and said the real problem here is the subprime mortgage crisis. We had Congress -- and he's testifying to this special committee -- we had Congress and members of two administrations demanding that banks lend money to people who had no business being lent to. Those are my words, but he said it point-blank. And nobody's reported it, other than I, El Rushbo, nobody heard him say it. And we haven't had Barney Frank or Chris Dodd run out there and say he's lying about it, nobody's disputing what he said. Nobody's reporting it, either. So it's interesting how you get the truth from people when they're leaving the game. Another example of this, Daniel Mudd, I think he's the son of Roger Mudd, he ran Fannie Mae. Yeah, he was the former Fannie Mae president and CEO. And here's a little bit of his testimony from this morning on the same thing.

MUDD: I believe in retrospect that there was overinvestment in housing. I believe in retrospect origination standards slipped. Home ownership rates probably rose too high.

RUSH: Well?

MUDD: The GSEs were chartered to expand and increase home ownership --

RUSH: Yeah.

MUDD: -- while operating as private companies.

RUSH: Yeah, yeah.

MUDD: In doing so, they contributed to the crisis, but they did not precipitate it.

RUSH: Now, technically he is right. He's sitting over there at Fannie Mae, Barney Frank's Fanny Mae. And he's getting orders -- GSE means government sponsored entities. They tried to say that these were private sector companies run by the government, which, if the government runs it, it's not private sector. So you had Chris Dodd and Barney Frank in the Senate and the House respectively demanding that under the title of affordable housing, they had to get people in homes that had no business being in homes because they couldn't afford it. But it was unfair they couldn't afford it, so we're going to get 'em in there anyway. The banks were forced to make loans, Fannie Mae was forced to buy the mortgages like they do. That led to the creation of mortgage-backed securities, all kinds of new investment products, insurance for what everybody knew was bad paper, and so here's Mudd, he's basically saying the same thing Greenspan did, overinvestment in housing.

Translation: We put too many people in houses that had no business being in houses. "I believe in retrospect origination standards slipped," meaning we didn't look at who was being put houses. In fact, we looked the other way. We did not disqualify anybody that wanted to get into a house. We just lent them the money. "Home ownership rates probably rose too high." Well, that means we had too many people in houses that didn't belong there, which, by the way, elevated and led to the bubble, led to the housing prices going up. And then he says the GSEs, which Fannie Mae, Freddie Mac, were chartered to expand and increase home ownership. So they were told to go right along with the banks in the subprime deal. And he says in doing so, Fannie Mae and Freddie Mac contributed to the crisis but they didn't precipitate it. What he means is don't blame us, we were just following orders, we didn't start this, this wasn't our idea. This idea actually originated with Clinton. I remember Janet Reno calling banks and threatening big investigations if they didn't continue to make these loans.

What we're learning here, all of this financial crisis stuff, what people are admitting to now, it wasn't Wall Street per se, like Obama and everybody has been blaming. They're not blameless, but now that the truth is being told by people who are no longer part of the game, we are learning that the subprime lending was actually the problem that started all the other dominoes to fall, and I've thought it a long time and a lot of other people have, which means ultimately that the fault of all this can go back to Bill Clinton, Barney Frank, and Chris Dodd. You'll remember that Bush actually tried to get a bunch of regulators in there and testifying to stop this, and Barney Frank just ran roughshod over 'em. I remember seeing some of the videotape from the hearings.

Now, it's fascinating because Angelides, when the microphones are off, after Greenspan finished, there was a little audio from the former chairman. Angelides said that Greenspan had given a lights-out performance. And that's in the Politico: "Greenspan Defends Legacy, Jabs Hill." So Angelides, Democrat, he told the truth. It's just fascinating. Well, it's not fascinating. It's interesting to point out that when they're leaving the game, when Washington and the culture there can no longer do anything for them, they tell the truth. In the middle of the scandal don't dare tell the truth if you want to remain a player in the game.

END TRANSCRIPT

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