[Congressional Record Volume 156, Number 166 (Wednesday, December 15, 2010)]
[Extensions of Remarks]
[Pages E2150-E2151]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 BOEHNER: EYE-OPENING REPORT DETAILS GOV'T MORTGAGE COMPANIES' ROLE IN 
                           FINANCIAL MELTDOWN

                                 ______
                                 

                          HON. JOHN A. BOEHNER

                                of ohio

                    in the house of representatives

                      Wednesday, December 15, 2010

  Mr. BOEHNER. Madam Speaker, I submit the following for the Record:

 Boehner: Eye-Opening Report Details Gov't Mortgage Companies' Role in 
                           Financial Meltdown

       Washington, DC.--House Speaker-designate John Boehner (R-
     OH) issued the following statement in response to a report 
     released by the Republican commissioners on the Financial 
     Crisis Inquiry Commission (FCIC) regarding the causes of the 
     financial crisis:
       ``This eye-opening report details how government mortgage 
     companies played a pivotal role in the financial meltdown by 
     handing out high-risk loans to families who

[[Page E2151]]

     couldn't afford them. After years of being coddled and 
     enabled by Washington politicians, Fannie Mae and Freddie Mac 
     are now on life support, kept afloat by taxpayers fed up with 
     unending bailouts. Through the Pledge to America, Republicans 
     have proposed saving billions for taxpayers by ending 
     government control of Fannie and Freddie, shrinking their 
     portfolios, and establishing minimum capital standards. I 
     appreciate the Republican commissioners' efforts to get to 
     the bottom of what happened and ensure the American people 
     have the full story about the financial crisis. This is a 
     report every taxpayer should read.''
       Note: Former Rep. Bill Thomas, Keith Hennessey, Douglas 
     Holtz-Eakin, and Peter Wallison are the Republican 
     commissioners on the FCIC. As the Republican commissioners 
     state in their introduction, ``these findings and conclusions 
     do not constitute the Commission's report.''


                              Introduction

       On May 20, 2009, Public Law No. 111-21, the Fraud 
     Enforcement and Recovery Act of 2009, was enacted into law, 
     creating the Financial Crisis Inquiry Commission (FCIC). 
     According to the Act, the FCIC was established to ``examine 
     the causes, domestic and global, of the current financial and 
     economic crisis in the United States.'' The law requires that 
     today, December 15, 2010, the FCIC submit ``to the President 
     and to the Congress a report containing the findings and 
     conclusions of the Commission on the causes of the current 
     financial and economic crisis in the United States.'' This 
     primer contains preliminary findings and conclusions released 
     by Vice Chairman Bill Thomas, Commissioner Keith Hennessey, 
     Commissioner Douglas Holtz-Eakin, and Commissioner Peter J. 
     Wallison, and represents a portion of the findings and 
     conclusions resulting from our work on the FCIC. As the 
     transmission of the report of the FCIC to the President and 
     Congress requires a majority vote of the Commission, these 
     findings and conclusions do not constitute the Commission's 
     report. Rather, this document is an effort to reflect the 
     clear intention of our enabling legislation. Our views have 
     been shaped, in part, by our knowledge of economics and 
     financial markets generally. In the course of our 
     examination, we have studied and drawn from the extensive 
     work already available on the financial crisis. This crisis 
     that we were tasked to study is neither the first nor likely 
     the last of its type, and thus our examination of similar, 
     previous episodes also informed our findings and conclusions. 
     To that end, we see this document as a part of an already 
     rich discussion of the causes of financial crises, both in 
     the United States and around the world. This document adds to 
     that conversation rather than closing it. The two seminal 
     works on the causes of the Great Depression, Milton Friedman 
     and Anna Schwartz's--A Monetary History of the United States, 
     1867-1960 and Ben Bernanke's ``Nonmonetary Effects of the 
     Financial Crisis in the Propagation of the Great 
     Depression,'' were published in 1963 and 1983, respectively, 
     many decades after the crisis had ended. We anticipate that 
     future generations will continue to provide additional 
     insights into the causes of this financial crisis as well.
       Further, we want to stress the extent to which our views 
     have been influenced by the research and investigations 
     conducted by the FCIC since our first meeting in September 
     2009. The work included conversations with economic 
     historians, finance experts, and other academics, and 
     hundreds of interviews with market participants, regulators, 
     and government officials. While we may have organized and 
     conducted some of these investigations differently given the 
     choice, we have found many elements to be useful. We thank 
     the FCIC staff for their hard work.
       We have tried to distill those issues that we think are 
     most important into a series of questions and answers. 
     Different questions were included for different reasons, 
     including those topics that, in our view, are commonly 
     mischaracterized and those most relevant to future policy 
     discussions. Certainly, this is not an exhaustive list.
       Our framework reflects a central premise that the financial 
     crisis was distinct from other recent important economic 
     events, including the housing bubble and the prolonged 
     economic recession. We believe that the financial crisis was, 
     at its core, a financial panic that was precipitated by 
     highly correlated mortgage-related losses concentrated at 
     large financial firms in the United States and Europe. While 
     the housing bubble, the financial crisis, and the recession 
     are surely interrelated events, we do not believe that the 
     housing bubble was a sufficient condition for the financial 
     crisis. The unprecedented number of subprime and other weak 
     mortgages in this bubble set it and its effect apart from 
     others in the past.
       We look forward to continuing to participate in the ongoing 
     dialogue on the causes of the financial crisis and providing 
     our additional views as they develop.
       Vice Chairman Bill Thomas
       Commissioner Keith Hennessey
       Commissioner Douglas Holtz-Eakin
       Commissioner Peter J. Wallison
       A copy of the report can be found at the following link: 
     http://republicanleader.house.gov/UploadedFiles/
Financial_Crisis_Primer_Final.pdf

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