I wasn't being nasty. I honestly thought she doesn't understand because she is arguing against herself. She says she supports the bailout, but then complains that there wasn't enough regulation. She is philisophically contradicting herself.

Sometimes I feel like some people haven't read all the posts and links that people have provided on here. . .but . . . .

Ok. . .it's complicated but I will try to explain it:

In 1977:

Under Carter, the Dems passed the Community Reinvestment Act:

A United States federal law that requires banks and thrifts to offer credit throughout their entire market area. So in other words, essentially puts a gun to the head of all lenders unless they issue mortgages to various minority groups, low-income folks, and both legal and illegal immigrants. Lenders out of compliance would be penalized as regulators would disallow any new business plan for mergers, acquisitions, or new products.

In 1992:

The regulator of Fannie Mae, OFHEO was critically weakened by the actions of Representative Barney Frank. The agency was required to get its budget approved by Congress, while agencies that regulated banks set their own budgets. That gave congressional allies an easy way to exert pressure.

In 1995:

As a result of interest from President Bill Clinton's administration, the implementing regulations for the CRA were strengthened . . .The revisions allowed the securitization of CRA loans containing subprime mortgages

In the late 1990's:

The then-CEO Franklin Raines relaxed lending standards at Fannie Mae to allow subprime borrowers to obtain loans. This was done under the direction of the Clinton Administration. Relaxing of Lending Standards

In 2003:

The Bush Administration recommended what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago."

But because of partisan politics these regulations never happened. . .the Dems killed it. In fact,
Representative Barney Frank (D-MA) claimed of the thrifts "These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

In late 2007:

The subprime mortgage crisis began. An increasing number of borrowers, often with poor credit, that were defaulting on their mortgages caused a precipitous decrease in demand for any mortgage-backed securities (MBS) that weren't guaranteed by Fannie Mae or Freddie Mac.

The housing bubble burst and Fannie and Freddie were left holding these defaulted notes.

In July 2008:

Representative Barney Frank (D-MA) and Senator Chris Dodd (D-CT), the Chairs of the House and Senate committees, respectively, with jurisdiction over housing, have proposed a plan using the FHA under which lenders that chose to take part would agree to reduce the loan amount and refinance the mortgage at a lower interest rate in return for a cash fee. Refinanced loans would be guaranteed by the FHA, and the lender would have no further credit exposure if the borrower subsequently defaulted. This means that if a refinanced loan later defaulted, the taxpayers would cover any losses.

When Wall Street got wind of this Frank-Dodd Plan investors got nervous and started selling off their holdings.

by August 2008:

Shares of both Fannie Mae and Freddie Mac had tumbled more than 90% from their one-year prior levels.

And now here we are. . .Sept 2008, being asked to bailout Fannie and Freddie to the tune of $700 billion dollars. This debacle rests almost soley at the feet of Barney Frank and Chris Dodd, both of whom have profited nicely with their cozy relationships with Wall Street. I found this and I think it sums it up pretty well:

The CRA promoted insanely low down payments and coerced lenders into giving mortgage loans to first-time buyers with unstable financing and incomes. Barney Frank (D-MA), as Chairman of the House Financial Services Committee and Chris Dodd (D-CT), Chairman of the Senate Banking, Housing & Urban Affairs Committee had ample knowledge of President Bush’s and Senator McCain’s concerns about the need for oversight reform for the financial markets, yet they chose to play the roles of obstructers instead of reformers. They had the power all along to affect reforms for the financial oversight process and they did nothing. Now, as we approach the presidential election of 2008 we witness two Democrat political opportunists trying feverishly to rewrite the history of their culpability with regard to the current financial crisis so as to hang the blame on the Bush Administration and the campaign of John McCain.

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"No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?"
- George Orwell Animal Farm