Mittwoch, August 27, 2008

Odd How The Democrats So Easily Forget...

In this day and age of internet retrieval, nothing disappears.

Even if certain people wish it could.

This, for instance.


This is from Sep. 11, 2003: talk about boomerang effects.

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

In other words, the Bush administration was on the ball. But Congress fucked it up.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

In other words: who allowed Fannie and Freddie to rack up the debts that they incurred? Who was asleep at the wheel?


The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

So: the ineptitude of Congress - and largely that of the Democrats when you look at who are players - in fiddling about whilst the problems were growing will be borne by... the US taxpayer. Isn't politics fun? No responsibility!

''There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,'' Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.

Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.

In other words, the Bush administration wanted to set things right and remove the possibility of corruption, but...


Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

So, let's see: Barney Frank got it wrong, the ranking Democrat on the oversight committee.

The Democrats' obsession with "ensuring affordable housing" has led directly, I repeat DIRECTLY, to the virtual meltdown on the housing market and the massive write-offs. It's the proof, the incontrovertible proof, that meddling in markets leads to market inefficiencies that can be exploited and lead, as well, to market collapse.

This is something that should destroy the Democratic party and the idiots who pass for Congressmen.

Total and complete fucking idiots. This kind of stupidity, even in 20/20 hindsight, is the hangin' kind...

HT: Greg Mankiw

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