Most people do not understand the economic crisis- it is too technical for them. So they fall back on the fact that Bush happened to be sitting in the White House- and that's all they need to know. Obama gets an undeserved windfall.

They don't know that the house GOP passed a bill in 2005 to setup a FNMA/Freddie watchdog agency against Dem opposition, which would have included limiting the size of the huge MBS portfolio of these two entities.

They don't know that John McCain co-sponsored the Senate Bill and that the Dems killed it in the Banking Committee.

They don't know that Obama and other Dem Senators received big bucks from Fannie Mae in returning for blocking Republican attempts at reform.

And they certainly don't understand that Fannie Mae was a key component of the investment bank implosion.

For example, when Bear Stearns failed- they were unable to obtain short-term credit, because of their overleveraged portfolio of subprime-based mortgage-backed securities.

The public is mostly unaware that Fannie Mae provided the guarantee for the principal risk ( not the interest-rate risk) of those bonds. The market knew ( this was before the Fannie Mae bailout ) that Fannie Mae was more-or-less insolvent, and thus would no longer accept Bear's MBS portfolio as collateral.

Oh, and BTW the bailout of Fannie Mae itself cost $200 billion- how much of that will be eventually recuperated by the taxpayer is unclear.

If the bill never made it out of committee-- which it didn't-- then the GOP never "passed" anything; considering that it was a Senate bill in the first place, then the "house GOP" wasn't involved at all, was it?

And you understand the economy, right? You are just parroting the nonsense you read on Freeper blogs.

freddie and fannie are not the issue here, the issue is securities backed by B/C loans. Companies like citi, centex, household, were packaging b/c loans and selling them on the stock market, many of these ended up in money market and other finacial instrument. When these started to go bad, these finacial instruments had to start selling off some of these bad assets, theirby lowering house values, the turm the housing bubble, its those overpriced homes that are now entering the market.

Because the Bush administration allowed these preditory lenders to flurish, fannie freddie and other legitamet banks had to loosen their rules to compete, it was that or their customer, the banks in this country could not comete.

Why does everyone keep placing the blame for all of this squarely on the Bush administration? Last time I checked the Dems control the House. Why didn't they pass laws to stop all of this?

How about we just say that there has been an extreme break down in leadership in both the Legislative and Executive branches, stop pointing fingers and figure out who can lead us out of this?

Alaska,

You are spot on. These people are so wanting to not see that it is total goverment that is to blame.

That's why we may need a Third Party.

Rest assured, if there were one Republican directly responsible for the Fannie / Freddie debacle, the Democrat controlled Congress would have had him appear before a committee hearing months ago and his name would be front page news for the liberal MSM. The fact that this hasn't occurred speaks volumes about which party is truly to blame for this fiasco. If Harry Reid, Nancy Pelosi, Henry Wxman, and the American people really want to get to the bottom of this, they should haul the following people before a committee hearing.

* Barney Frank

* Chris Dodd

* Franklin Raines

* Jamie Gorelick

But since these are all Democrats, they will most assuredly be seated in front of the witness table, rather than behind it. Pa-thetic.

Actually, the reason that people assume that Obama knows more about the economy than McCain does is because McCain has admitted on many occasions that he doesn't know very much about the economy.

Darn!