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The Wall Street Journal lends a helping hand in documenting what Democrats and Republicans were saying about Fannie Mae and Freddie Mac before the blow up we’ve seen over the last few weeks.Â Many of the quotes you’ve read/heard before, courtesy of some videos I’ve linked to, but one of them – to my recollection – was not on those videos.Â Here’s Rep. Barney Frank, ranking Democrat on the Financial Services Committee, during a Committee hearing in September 2003:
Rep. Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated?
Mr. Raines: No, sir.
Mr. Frank: Mr. Gould?
Mr. Gould: No, sir. . . .
Mr. Frank: OK. Then I am not entirely sure why we are here. . . .
Rep. Frank: I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists.
Amazing, eh? All Raines and Gould had to say was “no, we don’t think we’ve been under-regulated and that should have resolved it as far as Frank was concerned. Think that’s shocking? Here’s what he said in his opening statement, I assume on that same day (there’s also video of Franks at that same link):
I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury.
I must say we have an interesting example of self-fulfilling prophecy. Some of the critics of Fannie Mae and Freddie Mac say that the problem is that the Federal Government is obligated to bail out people who might lose money in connection with them. I do not believe that we have any such obligation. And as I said, it is a self-fulfilling prophecy by some people.
So let me make it clear, I am a strong supporter of the role that Fannie Mae and Freddie Mac play in housing, but nobody who invests in them should come looking to me for a nickel–nor anybody else in the Federal Government. And if investors take some comfort and want to lend them a little money and less interest rates, because they like this set of affiliations, good, because housing will benefit. But there is no guarantee, there is no explicit guarantee, there is no implicit guarantee, there is no wink-and-nod guarantee. Invest, and you are on your own.
Now, we have got a system that I think has worked very well to help housing. The high cost of housing is one of the great social bombs of this country. I would rank it second to the inadequacy of our health delivery system as a problem that afflicts many, many Americans. We have gotten recent reports about the difficulty here.
Fannie Mae and Freddie Mac have played a very useful role in helping make housing more affordable, both in general through leveraging the mortgage market, and in particular, they have a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing, and that is what I am concerned about here. I believe that we, as the Federal Government, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals. I worry frankly that there is 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 disastrous scenarios. And even if there were a problem, the Federal Government doesn’t bail them out. But the more pressure there is there, then the less I think we see in terms of affordable housing.
This is the same man who, alongside Senator Chris Dodd – FM/FM’s favorite Senator, is acting now like what’s happened is the administration’s fault, when it’s been documented that the administration tried to do something about this issue early on and continued to do so, but were blocked primarily by Demcocrats like Frank and Dodd.
Dodd and Frank, and other Congressional Democrats should not be allowed to get away with the whitewashing of their significant role in turning a blind eye to this crisis when Republicans like Bush, Dole, Hagel, Sununu and McCain, Rep. Richard Baker and others actually had the foresight to try and nip the issues in the bud before they blew up. Republicans are being blamed for the current financial meltdown when the truth is the big players in getting us to this point were primarily Democrats like the ones who are trying to take “leadership” positions now.
The Republicans who tried to tackle this problem ahead of time deserve credit. And the Democrats who stymied their efforts every step of the way, and those like Barack Obama who for years helped foster the “gimme” attitude that was behind the push to approve loans for people who couldn’t afford to pay them back, deserve to be exposed and held accountable. That’s what the ballot box is for, and before people walk into the voting booth in November, they need to know this information so they can make an informed decision as to which party has been more responsible for trying to prevent this crisis, and which party has spent the last two weeks trying to make sure that the bailout bill isn’t a bloated spending free-for-all with freebies for corrupt organizations like Barack Obama’s ACORN outfit, a group that also helped enable the current financial collapse.
Please – spread the word. Use the “Email This Post” function at the bottom of this post to email this information to people you know will be receptive to it. The mainstream media – with the exception of Fox – is turning mostly a blind eye to this story, and of course FactCheck, too, tries the “it’s everyone’s fault” approach here. Don’t fall for the spin. Don’t fall for the “Let’s hold hands and don’t pass blame – we’re all in this together” rallying cry we’re hearing from the media, Democrats, and some Republicans who want to put a happy face on a sorry, sad, preventable situation. Now is the time to assess blame. What are we supposed to do, wait until after the election to start pointing fingers? I don’t think so.