Everybody’s a critic till they need Fannie and Freddie’s help. I thought they were simply to unregulated to be trusted?
Four Fannie Mae execs resign. Wall Street execs who created the Subprime mess in the first place tsk, tsk as usual
You’ve gotta love this McCain Op-Ed in the Wall Street Journal, excoriating Fannie and Freddie Mac for their supposedly endemic problems and the do-nothing Congress that let it get so out of control. Best of all, McCain blames lobbyists, presumably meaning the 20 or so lobbyists that run his campaign and have advocated for Fannie or Freddie over the years. I’ll bet he’s giving them hell over the crab dip at fundraisers.
But wait. . . .
Fannie and Freddie have lobbyists? Does anyone see the logical fallacy in this? Yes, of course. Government agencies do not lobby each other. Fannie Mae and Fredie Mac, while setup by the Congress, are autonomous agencies over which Congress has had very little control. Until now, that is.
And so I’m confused: is John McCain advocating Congress and the government take more control of the national housing economy? Because Fannie and Freddie are easily the largest institutions in that market. That means that the mortgage industry is for all intents and purposes a national industry at this point. Dig that? You can’t have a national health care plan, but you can have a nationalized mortgage industry.
That doesn’t sound very Republican to me.
And I say it every time we get on the subject of the Fannie/Freddie near-collapse: the problem is not any internal structural problems at these two agencies, though I’m sure there’s probably plenty of those. The problem is that the government is stepping in to save the country from the depression that could have happened because of reckless private banking. Not that anyone’s going to bother reporting that, but I though you might be interested.
If you’ve been paying attention to the Subprime situation at all, you no doubt anticipated this move, despite the government’s assurances that it such would not be necessary: the Treasury today assumed responsibility for Freddie and Fannies mortgages, firing their CEOs.
MSNBC.com picks up the story this morning about Fannie Mae’s new management shakeup. Straining under the pressure of the Subprime mess, Fannie has opted to shake up management in an effort to instill confidence of the private sector that they’re going to weather the storm.
Well, ain’t that rich? Nowhere in the story is there any description of why Fannie and Freddie are so encumbered. Rather, the discussion leaves the impression that yet another government-backed institution is crumbling in the midst of controversy and crisis. Nowhere is there a discussion of the fact that a decade and a half of irresponsible lending and reckless profit motive in the private sector cause the Subprime/ARM Mortgage crisis. Not a word about the fact that – at the behest of the anti-government government of George Bush – the partial public agencies of Fannie and Freddie took on the bad debts of the private sector in an effort to keep people in their homes and the market from crashing our entire economy.
There is, however, copious tsk-tsking and doom-saying on the part of private sector analysts, many of whom probably cheered on the reckless spending that got us into this mess. How nice. It’s like setting your house on fire while juggling torches. . . and then bitching about the fire department’s response time.