In his State of the Union Address, President Obama highlighted the importance of making America a better place to do business saying, "to help our companies compete, we also have to knock down barriers that stand in the way of their success. To reduce barriers to growth and investment, I've ordered a review of government regulations. When we find rules that put an unnecessary burden on businesses, we will fix them ..."
This passed week, I've released a report that chronicles how the politicization of Fannie Mae and Freddie Mac paved the way for today's financial crisis. The truth is, Fannie and Freddie had a unique relationship with the federal government that created an environment in which the market viewed them as an extension of the U.S. government and therefore 'too big too fail.' The fact that they directly answered to the federal government and its elected officials created an environment of 'crony capitalism' similar to that of Russia or China. Emphasis began to be placed on volume of lending vs quality/sustainability of loans, meaning a policy of reduced down payments and riskier unsustainable lending. Clinton-era policies extended a pattern of behavior of lowering mortgage underwriting standards in order to drive up the national homeownership rate.
For the fourth time this year, the House Democrat leadership is gearing up to force a vote to massively expand the State Children's Health Insurance Program (SCHIP), despite objections from SCHIP supporters who point out that the measure will push more than 2 million children out of private health insurance plans and onto taxpayer-funded programs.
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