Eric O’Keefe

From wsj.com:

U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged swift action on a Treasury Department plan to buy illiquid mortgage-linked securities and avoid severe spillover effects on the economy.

“Action by the Congress is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy,” Mr. Bernanke said in his prepared remarks.

Isn’t that why they backed bailout number one, for Bear Stearns; number two, for Fannie and Freddie; and number three, for AIG?

Congress needs to consider the serious consequences of approving yet another bailout by these two bureaucrats with our checkbook. They listen too closely to those who created the crisis in the first place.

Lenders apparently made a couple of trillion dollars of bad loans. There is no way to avoid some pain as those mistakes are discovered and accounted for. The markets would implement a fast, harsh solution which would remove capital from the control of the people who squandered so much wealth. Yes, that would be painful for many, especially those who made the bad investments.

But the bailouts shift the losses from those who deserve them to all taxpayers; they therefore reward the profligate and punish the responsible. They also signal to Wall Street that the best way they can apply their talents in the coming months is by finding which bad loans they can dump on the taxpayers; they will not be focused on getting capital to where the market needs it.

The economic consequences of this bailout will be to cost taxpayers hundreds of billions of dollars; to redirect Wall Street from profit-seeking to rent-seeking; and to prolong the developing recession indefinitely.

Congress should not fight for little amendments, it should just say “No More Bailouts.”

Fannie Mae and Freddie Mac have been essentially taken over by the federal government. This is a major step in the most expensive financial scandal in U.S history. These two mortgage giants guarantee $5.5 trillion of debt. They fueled the recent housing boom riding an implied federal guarantee of their debt. They used creative leverage which ballooned their phantom profits, their management bonuses, and the ultimate losses to U.S. taxpayers — which I predict will exceed $100 billion.

These organizations were classic rent-seeking companies; Fannie has a large headquarters on Wisconsin Ave. in Washington, D.C., because the source of their power and profits was Congress, not customers. They hired people for their political pull, not their financial acumen. And what we got was government-style extravagance, self-dealing, and ultimately a doubling of the publicly held debt of the United States.

This is a stunning financial development, and it should become a stunning political development. Of course Fannie paid the politically powerful from both parties, but they put their biggest dollars and biggest hires on the side of the biggest spenders.

Here is how much some of the winners profited from this scandalous operation, according to an insightful Wall Street Journal editorial:

Franklin Raines, CEO: $90,128,761 (1998-2003)

Jamie Gorelick, vice-chair: $26,466,834 (1998-2003)

Jim Johnson, CEO: $21,000,000 (1998 alone)

Who are these people? Let’s ask wikipedia:

Franklin Delano Raines (born January 14, 1949 in Seattle, Washington) is the former chairman and chief executive officer of Fannie Mae who served as White House budget director under President Bill Clinton.

Jamie S. Gorelick (born May 6, 1950) is an American attorney and judicial officer who was Deputy Attorney General of the United States during the Clinton administration. She was appointed by former Senate Democratic Leader Tom Daschle to serve as a commissioner on the bipartisan National Commission on Terrorist Attacks Upon the United States, which sought to investigate the circumstances leading up to the terrorist attacks of September 11, 2001.

James A. Johnson is a United States Democratic Party political figure. He was the campaign manager for Walter Mondale’s failed 1984 presidential bid and chaired the vice presidential selection process for the presidential campaign of John Kerry. In the 2008 election, he is a member of the vice-presidential selection process for the presumptive Democratic nominee, Senator Barack Obama.

And Raines was a donor to Obama’s 2006 Senate campaign.

Notice a pattern?

Today’s London Times has a story on Palin wikipedia developments.

Here is the best of the story from the London Times:

Wikipedia has become another important internet tool in presenting politicians to voters. Few would be surprised if a campaign worker had been given the task of putting positive spin on Mrs Palin’s entry in preparation for last week’s announcement. A tracking site estimated that the page was viewed more than 2 million times on Friday.

Since the announcement the Sarah Palin page has been edited many hundreds of times more and Wikipedia has now put in place a partial block so that only established editors can change the entry. Some of Young Trigg’s entries have been amended or toned down.

The New York Times reports on the wiki wars:

The daily page view totals for even well-known candidates are striking. For example, according to a site that tracks the traffic to Wikipedia, the John McCain article had 645,000 page views in June. That month, Barack Obama had 1.35 million page views. Henrik Abelsson, who tracks the traffic, said that on Friday there were 2.4 million page views for Gov. Palin’s Wikipedia article.

Last year, a graduate student, Virgil Griffith, created a clever Web site, Wiki- Scanner, that made it easy to detect where anonymous editors of Wikipedia were accessing the site. In the process, companies, government agencies and, yes, politicians were caught in the act of spiffing up their Wikipedia entries, even as many assumed that anonymity would make them safe. (Wikipedia, incredibly and mercilessly, keeps a record of every change made to every article.)