Congress' Lies About Fannie & Freddie

I would be extremely remiss if I did not call to my readers' attentions this excellent piece in yesterday's Wall Street Journal, entitled "What They Said About Fan and Fred."


The quotes from Congressional buffoons such as Barney Frank, Chris Dodd, Frisco Nan Pelosi and, my favorite liberal idiot, California's Maxine Waters, are simply priceless. Did I mention Tom Carper, Chuckie Schumer, and, alas, even Republican Senators Jack Reed and Robert Bennett?


To my great shock, Nebraska's Chuck Hagel, for whom I also have little respect, is the only quoted voice of reason in the whole matter. He is quoted as saying,


"Mr. Chairman, what we're dealing with is an astounding failure of management and board responsibility, driven clearly by self interest and greed. And when we reference this issue in the context of -- the best we can say is, "It's no Enron." Now, that's a hell of a high standard."


I can't leave without at least one hilarious quote each from Frank, Waters and Dodd. At a September 10, 2003 hearing, we read,


Frank: I worry, frankly, that there's a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . .


Waters: Secretary Martinez, if it ain't broke, why do you want to fix it? Have the GSEs [government-sponsored enterprises] ever missed their housing goals?


And two weeks later,


Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .


Then, on February 24-25, 2004, in testimony during a Senate hearing, we have these remarks:

Carper: What is the wrong that we're trying to right here? What is the potential harm that we're trying to avert?

Greenspan: Well, I think that that is a very good question, senator. What we're trying to avert is we have in our financial system right now two very large and growing financial institutions which are very effective and are essentially capable of gaining market shares in a very major market to a large extent as a consequence of what is perceived to be a subsidy that prevents the markets from adjusting appropriately, prevents competition and the normal adjustment processes that we see on a day-by-day basis from functioning in a way that creates stability. . . . And so what we have is a structure here in which a very rapidly growing organization, holding assets and financing them by subsidized debt, is growing in a manner which really does not in and of itself contribute to either home ownership or necessarily liquidity or other aspects of the financial markets. . . .

Dodd: I, just briefly will say, Mr. Chairman, obviously, like most of us here, this is one of the great success stories of all time. And we don't want to lose sight of that and [what] has been pointed out by all of our witnesses here, obviously, the 70% of Americans who own their own homes today, in no small measure, due because of the work that's been done here. And that shouldn't be lost in this debate and discussion. . . .

And this from Schumer on April 5, 2005,

"I'll lay my marker down right now, Mr. Chairman. I think Fannie and Freddie need some changes, but I don't think they need dramatic restructuring in terms of their mission, in terms of their role in the secondary mortgage market, et cetera. Change some of the accounting and regulatory issues, yes, but don't undo Fannie and Freddie."

Can Schumer look any worse than this?

Where is the shame among Democratic Senators- Carper, Schumer, Dodd- and Barney Frank? With luck, all who are up for election in November will, with the public's outrage, be defeated.