Despite repeatedly voicing concerns about Arizona's new immigration enforcement law in recent weeks and threatening to challenge it, Attorney General Eric Holder said Thursday he has not yet read the law -- which is only 10 pages long.
"I have not had a chance to -- I've glanced at it," Holder said at a House Judiciary Committee hearing when asked had he read the state law cracking down on illegal immigrants.
Holder told reporters last month that he fears the new law is subject to abuse and that the Justice Department and the Homeland Security Department are in the midst of conducting a review.
The Arizona law requires local and state law enforcement to question people about their immigration status if there's reason to suspect they're in the country illegally, and makes it a state crime to be in the United States illegally.
The law has sparked protests across the country, including a City Council-approved boycott of Arizona businesses by Los Angeles.But proponents deny that the law encourages racial profilng, with some saying the local controversy is a symptom of a broken federal immigration system.
Holder said last month that a number of options are under consideration, including the possibility of a court challenge.
On Thursday, Holder said he plans to read the law before reaching a decision on whether he thinks it's constitutional.
When asked by Rep.Ted Poe, R-Texas, how he could have constitutional concerns about a law he has not read, Holder said: "Well, what I've said is that I've not made up my mind. I've only made the comments that I've made on the basis of things that I've been able to glean by reading newspaper accounts, obviously, television, talking to people who are on the review panel...looking at the law."
On Sunday, Holder said he does not think Arizona's law is racially motivated but voiced concern that its enforcement could lead to racial profiling.
Holder said he understands the frustration behind the Arizona law, but he warned during an appearance on ABC's "This Week" that "we could potentially get on a slippery slope where people will be picked on because of how they look as opposed to what they have done."
Thursday, May 13, 2010
Thursday, May 6, 2010
"No More Bail Outs"? Right...except the ones we want!
Fannie and Freddie Failure Forever
Yesterday, Sen. Chris Dodd (D-CT) told reporters about his financial regulation bill, "We've ended the 'too big to fail' debate. So no longer do I expect any argument to be made that this bill exposes the American taxpayer." Really. Someone might want to tell Sen. Dodd that in other news yesterday, Freddie Mac announced that it lost another $6.7 billion in the first quarter of 2010 and therefore needed another $10.6 billion in cash from U.S. taxpayers. Since formally nationalizing Freddie in 2008, the federal government has already spent $50.7 billion bringing the Freddie bailout total to $61.3 billion so far. Combined with Fannie Mae's raid on the Treasury, the Congressional Budget Office estimates that the American people will spend $389 billion bailing out the two Government Sponsored Entities by 2019. So much for American taxpayers no longer being exposed to "too big to fail."
In fact, nothing in the Dodd bill does anything to reform Fannie Mae and Freddie Mac. This despite the fact that Fannie and Freddie were key components in causing the very financial crises Dodd claims his bill will forever prevent. Fannie and Freddie were both created for the specific purpose of making it easier for Americans to buy more expensive housing. Starting in 1993, political forces pushed Fannie and Freddie to loosen their once strict loan purchasing requirements. By 1996, regulations required that 40% of all Fannie and Freddie-bought loans must come from individuals with below median incomes. In 1995, Fannie and Freddie began buying subprime securities originally bought and bundled by private firms. One of these firms was Countrywide Financial who, thanks to their status as Fannie Mae's biggest customer, delivered investors a 23,000% return between 1985 and 2003. By 2004, Fannie and Freddie were purchasing $175 billion worth of subprime securities per year from Countrywide and their brethren... a 44% share of the entire market. There are other factors that helped contribute to the 2008 financial crisis, but Fannie and Freddie's use of their "too big to fail" status to create and grow the subprime security market was essential.
But Sen. Dodd, who received V.I.P. treatment from Countrywide CEO Angelo Mozilo, never saw any problem with Fannie and Freddie. On July 13, 2008, Senator Dodd said on national television, "To suggest somehow that [Fannie Mae and Freddie Mac] are in trouble is simply not accurate." Less than two months later the bailouts of Fannie and Freddie began. Keep these facts in mind when Dodd says his bill solves the "too big to fail" problem.
The problems with the Dodd bill go beyond its failure to let Fannie and Freddie wither into extinction. While Dodd has agreed to get rid of the $50 billion bailout fund, the underlying bailout authority still remains. Now taxpayers are expected to front the government money while firms are liquidated. But the irresponsible creditors who let those firms borrow money irresponsibly would still be eligible for taxpayer bailouts. According to The Washington Post, "a failing firm would be forced to pay back the government any money they received above what they would have gotten under a bankruptcy proceeding." But how does the government know what creditors would have got if the company went into bankruptcy? Why not just strengthen the existing bankruptcy system and actually allow these too big to fail firms to, ya know, fail?
But Dodd and the Obama administration would never allow that. It would defeat the whole purpose this financial regulation bill, which is to transfer as much power to the federal government as possible. Never mind that these are the same government regulators who failed to see the last crisis coming
Yesterday, Sen. Chris Dodd (D-CT) told reporters about his financial regulation bill, "We've ended the 'too big to fail' debate. So no longer do I expect any argument to be made that this bill exposes the American taxpayer." Really. Someone might want to tell Sen. Dodd that in other news yesterday, Freddie Mac announced that it lost another $6.7 billion in the first quarter of 2010 and therefore needed another $10.6 billion in cash from U.S. taxpayers. Since formally nationalizing Freddie in 2008, the federal government has already spent $50.7 billion bringing the Freddie bailout total to $61.3 billion so far. Combined with Fannie Mae's raid on the Treasury, the Congressional Budget Office estimates that the American people will spend $389 billion bailing out the two Government Sponsored Entities by 2019. So much for American taxpayers no longer being exposed to "too big to fail."
In fact, nothing in the Dodd bill does anything to reform Fannie Mae and Freddie Mac. This despite the fact that Fannie and Freddie were key components in causing the very financial crises Dodd claims his bill will forever prevent. Fannie and Freddie were both created for the specific purpose of making it easier for Americans to buy more expensive housing. Starting in 1993, political forces pushed Fannie and Freddie to loosen their once strict loan purchasing requirements. By 1996, regulations required that 40% of all Fannie and Freddie-bought loans must come from individuals with below median incomes. In 1995, Fannie and Freddie began buying subprime securities originally bought and bundled by private firms. One of these firms was Countrywide Financial who, thanks to their status as Fannie Mae's biggest customer, delivered investors a 23,000% return between 1985 and 2003. By 2004, Fannie and Freddie were purchasing $175 billion worth of subprime securities per year from Countrywide and their brethren... a 44% share of the entire market. There are other factors that helped contribute to the 2008 financial crisis, but Fannie and Freddie's use of their "too big to fail" status to create and grow the subprime security market was essential.
But Sen. Dodd, who received V.I.P. treatment from Countrywide CEO Angelo Mozilo, never saw any problem with Fannie and Freddie. On July 13, 2008, Senator Dodd said on national television, "To suggest somehow that [Fannie Mae and Freddie Mac] are in trouble is simply not accurate." Less than two months later the bailouts of Fannie and Freddie began. Keep these facts in mind when Dodd says his bill solves the "too big to fail" problem.
The problems with the Dodd bill go beyond its failure to let Fannie and Freddie wither into extinction. While Dodd has agreed to get rid of the $50 billion bailout fund, the underlying bailout authority still remains. Now taxpayers are expected to front the government money while firms are liquidated. But the irresponsible creditors who let those firms borrow money irresponsibly would still be eligible for taxpayer bailouts. According to The Washington Post, "a failing firm would be forced to pay back the government any money they received above what they would have gotten under a bankruptcy proceeding." But how does the government know what creditors would have got if the company went into bankruptcy? Why not just strengthen the existing bankruptcy system and actually allow these too big to fail firms to, ya know, fail?
But Dodd and the Obama administration would never allow that. It would defeat the whole purpose this financial regulation bill, which is to transfer as much power to the federal government as possible. Never mind that these are the same government regulators who failed to see the last crisis coming
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