Setting the record straight on economy

Richard Clark’s Oct. 19 letter blaming Fannie Mae and Freddie Mac for the financial meltdown is pure, unmitigated nonsense. If Mr. Clark had taken the time to inform himself of the facts, he would know that there were many causes of the meltdown. He would know that the vast majority of the mortgage loans that went bad were subprime loans issued by lenders that were not banks and therefore not subject to federal regulations. He would know that Fannie and Freddie weren’t allowed to purchase subprime loans before 2005. He would know that the mortgages were bundled into unregulated derivatives, which, when the mortgage loans went bad, caused a major liquidity crisis in the financial institutions that owned the derivatives. It was this liquidity problem that nearly toppled our financial system.

If Mr. Clark were informed of the facts, he would also know that the entire federal government was controlled by the Republican Party from 2001 through 2007. Thus, if Republicans had been truly concerned about the actions of Freddie and Fannie, they had the political means to take whatever action they thought necessary to prevent the financial meltdown.

Finally, if Mr. Clark were informed of the facts, he would know that Christopher Dodd is a senator, not a congressman.

Robert H. Fredian

Arlington Heights