The four Republicans appointed to the commission investigating the root causes of the financial crisis plan to bypass the bipartisan panel and release their own report Wednesday, according to people familiar with the commission’s work.
The Republicans, led by the commission’s vice chairman, former congressman and chair of the House Ways and Means Committee Bill Thomas, will likely focus their report on the explosive growth of subprime mortgages and the heavy role played by the federal government in pushing mortgage giants Fannie Mae and Freddie Mac to purchase and insure them. They’ll also likely focus on the Community Reinvestment Act, a 1977 law that encourages banks to lend to underserved communities, these people said.
The Republicans’ report is expected to conclude that government policy helped inflate the housing bubble and that prices weren’t expected to crash because the government pushed homeownership so aggressively. They say that the report will note that once the bubble burst, a financial panic followed because firms weren’t adequately prepared.
Frustrated in part by the Financial Crisis Inquiry Commission’s chairman, Phil Angelides, and the tenor of the panel’s preliminary findings, the Republicans are choosing to ignore the five Democrats and lone independent and issue their document ahead of the commission’s Jan. 15 release. Angelides is described as a demanding boss who’s said to be difficult to work for. Both Thomas and Angelides pledged in January that they’d strive to reach bipartisan consensus.
Once again, America is being held hostage by the puristas. The Democrats on this commission should take the lead of the brave patriots on the President’s Deficit Commission, patriots like Dick Durbin, and vote for whatever the Republicans want. This is the only way to break the hyperpartisan Washington gridlock.
…gave the US economy pneumonia–it made us sick, but we would have recovered. The collapse of the unregulated and highly leveraged derivatives market that was derived from the housing market is a cancer that nearly killed the global economy and, unless treated with much stronger regulations than the Frank-Dodd legislation, may very well be fatal.
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p>Sure a thirty-year, bipartisan effort to encourage homeownership contributed to a housing bubble (but not as big a factor as Alan Greenspan’s easy money policies or the huge profits Wall Streets discovered with derivatives). We are all in some way responsible for the boom. But to pin this on things like the Community Reinvestment Act–which really is footnote in this tragedy–is purely an idealogical attack from a bunch of deadenders (which we most discredit with the truth).