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November 11, 2008 06:21 PM UTC

Scott McInnis Addresses the National Economic Crisis

  • 15 Comments
  • by: gopstudent

( – promoted by Colorado Pols)

Ignacio, CO-Former Congressman Scott McInnis addressed the struggling US economy this past Saturday evening at the annual LaPlata/Archuleta Farm Bureau meeting.  McInnis, a six term Republican from Grand Junction with more than 22 years of legislative experience including several years on the Ways and Means Committee, now serves as a Partner with Hogan and Hartson and also serves on several Boards including the US Advisory Board of Directors for ING, the worlds 13th largest banking and insurance company.  

McInnis explained to the crowd gathered at the newly constructed Sky Ute Casino and Resort that the current economic crisis has been in the making for 30 years, when home ownership became a federal priority.  With the establishment of giants Freddie Mac and Fannie Mae, lending institutions were encouraged to increase the volume of loans issued, and were not held accountable for making risky loans, in fact encouraged to take higher risk to achieve more home ownership. As banks were encouraged to make high risk loans (low performance), mortgage companies popped up in a large part replacing the traditional local Bank mortgage loans.  The Community Reinvestment Act (originally passed in 1977) was a major test of social business vs. performance based banking and was just one of many policy decisions that led up to a shift from the Loan process of the past.  Poor management of lending giants like Fannie Mae and Freddie Mac, and lack of recourse (loans could be sold and the seller did not have to warrant the strength of the loan) have led to the massive crisis of credit markets and in turn the problems of AIG and various lending institutions.  The ripple effect on the economy is significant. This all contributed to the current economic crisis and the massive bailout recently approved by Congress. McInnis believes many will be asking for bailout by the Government including but not restricted to Car makers and their dealership systems.

McInnis mentioned that many Americans are concerned that the government is bailing out these companies for their bad decisions. And while he was strongly critical of the policy, McInnis explained the danger of inaction that could in fact put the taxpayer at a much higher risk, “This crisis could overwhelm the economy if some action is not taken.”  McInnis continued, “We will survive this crisis, but it will require further government involvement.  However, we need to be careful and draw the line at some point on who will receive government assistance.  It cannot be treated like a handout and must have very tough performance stipulations, as the Taxpayer’s must have protection and accountability” There must be full prosecution of any Fraud uncovered, and a limit on executive compensation with Government Funds in order to restore public trust.

In the short term, McInnis suggested that action must be taken to restore consumer confidence.  Congress may, attempt another stimulus package before Christmas.  McInnis warned that the nation is facing tighter credit and job losses.  McInnis closed his discussion on a positive note saying, “We are looking at some tough times, but you must remember this is a recession, not a full blown depression. With good leadership, prudent decisions and hard work, America and our way of life will survive.”

Note: Polsters, I will be posting all McInnis related content under the user J Green from here on out.  gopstudent will be used for more personal opinions, if at all. Time for a change.  

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15 thoughts on “Scott McInnis Addresses the National Economic Crisis”

  2. The Herald reported on this, and quoted him as saying taxes will need to increase to pay for the bailout.  I’m curious as to whether he is expressing greater flexibility in addressing taxation issues or is just suggesting that it must be done and he hopes Dems do it so the Republicans don’t have to take any responsibility on the issue.  It would be good to see any Republican line up and say things must be paid for with new revenues.  If he’s hoping to run for governor, it will doom him in the primaries, but if he doesn’t, it will doom him in the general.

  3. if he did, the wing nuts would go bat shit, esp. after his pre-election comments about Schaffer impending loss.

      However, Scooter might want to play Kingmaker in the GOP.

      1. Be careful for what you wish for, since threats against their own party’s moderate members will only marginalize the party even more.

        State Rep. Ellen Roberts (R-Durango) said Monday that she was threatened with primary opposition in 2010 if she didn’t remove herself from last week’s race for state House minority caucus chair.

        “I got a phone call, and it was suggested that if I would back out (of the caucus chair race), things could be easier or things could be harder,” Roberts said. “It’s no secret that there’s a Senate district election coming up in my area in 2010. So there was conversation about what impact my going forward in the caucus chair race would have on that.”

        Roberts — who is mulling a potential run for state Senate District 6 in 2010 — kept her name in nomination anyway. During last Thursday’s House Republican Caucus meeting, she lost the minority caucus chair election to state Rep. Amy Stephens (R-Colorado Springs).

        Roberts declined to say who called her, but she said it was “basically” the “same folks” who state Rep. Bob Gardner (R-Colorado Springs) said threatened GOP lawmakers to ensure that state Rep. Cory Gardner (R-Yuma) was elected House minority whip.

        So, when did being an authoritarian become known as being a GOP light?

  4. First sentance

    McInnis explained to the crowd gathered at the newly constructed Sky Ute Casino and Resort that the current economic crisis has been in the making for 30 years, when home ownership became a federal priority

    This is just false.  especially since fannie goes back to the 1930’s and Freddie to the 1950’s

    With the establishment of giants Freddie Mac and Fannie Mae, lending institutions were encouraged to increase the volume of loans issued, and were not held accountable for making risky loans, in fact encouraged to take higher risk to achieve more home ownership.

    This is also false.  The vast majority of Fannie/Freddie loans were conforming loans (high quality) until they lobbyied to lift their regulatory limits in 2002 due to private label Mortgage Backed Securities taking over their market share (Fannie/Freddie securitized about 90% of loans in the 90’s, down to about 35% by 2004).

    At this point I stopped reading.  McInnis either has no idea what he is saying or he knows what he is saying and is lying.

    1. I think that you should have kept reading, Red, rather than plucking two lines out of context.  

      McInnis continues…

      Poor management of lending giants like Fannie Mae and Freddie Mac, and lack of recourse (loans could be sold and the seller did not have to warrant the strength of the loan) have led to the massive crisis of credit markets and in turn the problems of AIG and various lending institutions.

      McInnis is not placing the blame solely on Freddie and Fannie, but on a culmination of events over the last 30 years or so that have led to the current crisis.  The 30 year reference has much more to do with the Community Reinvestment Act then anything else.  And furthermore, Freddie was not established until 1970, and Fannie was created in 1938 but not privatized until 1968.

      Gee Red, when you said…

      fannie goes back to the 1930’s and Freddie to the 1950’s

      You either must not know what you’re saying or are lying.

      1. That’s called a typo (much like Sentance)–but I can admit error.

        The CRA is not the cause of the problem.  Hud goals were not the problem.  Subprime loans were a small part of the total market, because they couldn’t be securitized.  However, growing private label securitization allowed for more subprime loans.  By 2000 the risks were clear and Bill Clinton’s HUD prevented the GSE’s from using subprime loans to meet CRA goals.

        It wasn’t until 2004 that the GSE’s, under heavily lobbying pressure, allowed Fannie/Freddie to count subprimes as meeting CRA goals.

        It would be easy to blame this reg change, but even this wasn’t the main cause, private label MBS were making FNM/FRE irrelevant–private labels would do it if the GSEs didn’t.  The problem was not the CRA, it was securitizing assets that lacked a reliable data set merely by haircutting standards set for prime loans that enjoyed a reliable data set.  

        I apologize that my typo’s confused you, but my analysis stand: McInnis doesn’t know what he is talking about.

        1. In politics you have to make the points clear and brief and in doing so they almost never are totally accurate and always leave detail out. I think his point was that this has been building up over time – and that’s a fair point. He doesn’t discuss the lack of oversight of the list 8 years which was also a big problem, but hey, we Dems leave things out too.

          I read it as a reasonable and responsible response to the crisis and as a Republican speaking up to why the intervention is needed and that more will be needed, that puts him in the category of acting reasonably IMO.

          1. Blaming poor people for this crisis is ridiculous and cruel, but more importantly it distracts from the true cause: poor regulation.  The GOP is trying to blame the CRA to advance the ludicrous argument that it was too much regulation (in the form of the CRA) that caused the crisis.

            The problem in the financial system does not go back 30 years (there are problems that go back that far, but not the financial system).  The problems in the financial system go back maybe 10 years.  GrammLeachBliley is as good a start as any, but the deregulation didn’t stop there.

            1. part of the problem also was that money has to go somewhere and the government basically did everything it could to help the home purchasing along. I think the second homes and “investment” homes may turn out to have caused more damage than people who could barely affor their home.

              But the thing is, one of the big pieces of the problem was the government doing everything it could to enable people to buy houses. (Then on top of that, doing no oversight or regulation, that lead to the humongous disaster we face today.)

              I don’t agree with some of what McInnis says, and he clearly is skipping some major causes of the problem. But he’s at least being somewhat fair & realistic. And since we Dems try to avoid talking about how Clinton signed the bills that tore down a lot of the regulation that had done so well – I don’t think it’s fair to fault McInnis for also picking what to talk about.

              1. 1. GLB passed with overwhelming support of both parties so your point is well taken

                2. the purpose of CRA was to prevent “Redlining” (denying loans in minority neighborhoods).  The purpose of CRA was not to lower lending standards.  The Rule change to allow subprime lending to meet CRA goals in 2004 was administrative (didn’t go through congress) and was reflective of the deregulation goal of the Bush administration.

                3. You are absolutely right that speculative buying was the real problem.  When fix and flip had dozens of shows on HGTV and hundreds of thousands of people considered themselves real estate investors you knew there was going to be a problem.  The housing stock can not grow faster than housing formation for long: by not recognizing the bubble and doing something about it early, the government really failed.

                1. The housing stock can not grow faster than *****household**** formation for long: by not recognizing the bubble and doing something about it early, the government really failed

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