Topic: The Banksters
Blast from the Past - Vern McKinley Warned of Freddie and Fannie - in 1997! As the bailouts continue, I urge the Reader to remember the republicans who gave warning decades ago. One is Dr. Paul, another is the "First Ron Paul Republican" Vern McKinley.by Jake, the Champion of the Constitution
(libertarian)
Monday, September 29, 2008
I recently came across a summary article (full version with sources here) from Vern McKinley on Freddie Mac and Fannie Mae published for the Cato Institute where he warned of its threat to the taxpayer in 1997.
"Although Freddie and Fannie are privately owned, they are what is known as government-sponsored enterprises (GSEs). GSEs don't have to follow all the rules that true privately owned companies do: they don't have to register their securities with the government, their securities receive special treatment for investment purposes, they don't have to pay state and local income taxes and--most important--their government sponsorship gives them the aura of a fully guaranteed government entity. That final benefit means they save billions in borrowing costs, just as lenders are willing to offer low-interest student loans that are guaranteed by the government. That savings alone allows the GSEs to pocket about $2 billion per year, according to estimates by the Congressional Budget Office and the Treasury Department."
"Allowing Congress to grant such special privileges is a bad idea. Those privileges, which are granted solely to Freddie and Fannie, crowd out other potential competitors in their market. Privately owned companies should not receive such preferred borrowing status, because it redirects investor funds into the middle- and upper-income housing market at the expense of other potential investments. Finally, the failure of either Freddie or Fannie could saddle taxpayers with a huge liability."
"Congress should immediately revoke all the benefits of government sponsorship: clearly, Freddie and Fannie can be profitable without them. Eliminating special privileges will force mortgage markets to be truly competitive and will eliminate the possibility that the current system of government sponsorship will someday lead to yet another taxpayer-funded bailout."
Vern also warned that these millions of dollar of savings were recycled into a "high-powered public relations and lobbying machine." The GSEs also evenly supporting both Democrats and Republicans with $750 million in the latest contemporary election cycle at the time of his article. The article was published in 1998 in USA Today with the title "Privatize Fannie Mae and Freddie Mac."
Vern McKinley was billed as the First Ron Paul Republican since he decided to run for office before Ron Paul announced his presidential candidacy. Vern ran for a seat in the House of Representatives for the 10th congressional district of Virginia but lost in the Republican primary against Frank Wolf in June, a fiscally not conservative career politician who has kept a seat warm in Congress for about 28 years. Wolf refused to debate Vern and won with about 91% of the primary votes compared to 9% for McKinley.
Vern has worked with the Board of Governors of the Federal Reserve, the FDIC, the Resolution Trust Corporation, and the Department of Treasury's Office of Thrift Supervision. He has also traveled extensively internationally, spreading free market ideas to China, Kenya, Afghanistan, and Indonesia among others. You can check out his views here.
As a disclaimer of sorts, I financially supported Vern and wrote a recommendation (see below) in May. At the time, I only cared that he would not support the War on Terror. How cute and naive I was back then! If you have the time, I suggest writing a note to him at vern@mckinleyforcongress.com and encourage him to run again.
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
As always, unlike the NFL, the author grants full permission to allow any accounts of, rebroadcasts, retransmissions, repostings in part or full of this article to your blog or anywhere else in order to promote the Restoration of our Republic.
Veritas numquam perit. Veritas odit moras. Veritas vincit. Truth never perishes. Truth hates delay. Truth conquers.
SENATE PASSES BAILOUT! And What to Do, NOW! Published: October 2, 2008 Senate voted at 9:07PM Wednesday evening to pass the $700 billion Paulson Plan bailout. A House vote will either be forced immediately or, at the latest, on Friday. This article has all the critical info and steps outlined to get informed, and then write and call your US House Representative immediately!
Published: September 28, 2008 Senator Obama, free of charge here is a speech you could use to beat McCain. Also, a comment and request for your opinion on Ron Paul's reference to the historian Carroll Quigley's Tragedy and Hope.
Henry Paulson - A Quick Look at the Man Published: September 27, 2008 Everyone in the country is talking about the Paulson Plan, wherein one clause would make Paulson de-facto financial dictator of the United States, accountable to no one. The article is a summary of my brief investigation and asks for help in finding out WHO IS THIS GUY?
Spill a Soda, Go to Jail for a Year Published: September 27, 2008 The latest strange-but-true antics of oppression from our dear Police State. Check out the story of the infamous soda-spiller at a Veteran's Affairs Hospital in Idaho.
WaMu Gets the FDIC WHAM-O! Published: September 26, 2008 The Seattle-based Washington Mutual Bank is shut down by the FDIC. The Raiders from the last Great Depression, JP Morgan, Strike Again. Have you protected yourself?
US Treasury Seizes Fannie Mae and Freddie Mac! And What It Means Published: September 8, 2008 "You poor kid, there have been centuries of philosophers plotting to turn the world into just that - to destroy people's minds by making them believe that that's what they are seeing. But you don't have to accept it. You don't have to see through the eyes of others, hold on to yours, stand on your own judgment, you know what that is, IS - say it aloud, like the holiest of prayers, and don't let anyone tell you otherwise." - Ayn Rand
WAR! America Attacks Pakistan Published: September 5, 2008 Drunk on the opiate of the McCain and Obama "We Can Change" conventions, the American press fails to notice the first attack involving American ground forces on Pakistani soil.
America, Were Michael Phelps' Eight Olympic Gold Medals Worth Winning? Published: August 24, 2008 Michael Phelps and other American athletes are bringing back loads of Gold, Silver, and Bronze Medals from the Beijing Olympics. A young libertarian economist asks if it was worth it.
The Money Matrix - Prelude (PART 1/15) Published: August 1, 2008 Prelude and Source List to a Series on Global Monetary Policy of Control and Explaining Big Government's Finances
Save Ron Paul's Voice - A Money Matrix Addendum Published: September 28, 2008 Learn how by reading. Article is intended as a poke-in-the-eye for members of the Ron Paul Revolution who complain about the bailouts and the financial, banking, and housing crises and do not realize that they may in fact be hypocrites.
The views expressed in this
article are those of Jake, the Champion of the Constitution only and do not represent
the views of Nolan Chart, LLC or its affiliates. Jake, the Champion of the Constitution is
solely responsible for the contents of this article and is not an
employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.
Unfortunately, politics requires some compromise, and Ron Paul knows that: for him (as for Ayn Rand), the key is to compromise on non-essentials only. The compromise this year was: Paul endorsed none of his rEVOLutionaries (like McKinley) who were running against incumbent Republicans, and in return the neoconservative GOP machine endorsed no challengers to incumbent Paul supporters (like Walter Jones). If not for that, McKinley might be coasting to election now. Well, 2010 isn't that far off!
Great news: I read it last night, but you scooped me. Oh, well, as long as we both get over the 10,000 readers mark, eh?
Want to comment on this
article? Leave your comment here. Your email address is
required to track your comment. However, we will neither
publish your email address nor distribute it to other
organizations or persons. The only reason we might use
it would be if we needed to contact you regarding your
comment. All comments are subject to our
terms of use policy.
"Although Freddie and Fannie are privately owned, they are what is known as government-sponsored enterprises (GSEs). GSEs don't have to follow all the rules that true privately owned companies do: they don't have to register their securities with the government, their securities receive special treatment for investment purposes, they don't have to pay state and local income taxes and--most important--their government sponsorship gives them the aura of a fully guaranteed government entity. That final benefit means they save billions in borrowing costs, just as lenders are willing to offer low-interest student loans that are guaranteed by the government. That savings alone allows the GSEs to pocket about $2 billion per year, according to estimates by the Congressional Budget Office and the Treasury Department."