A Home for Every American Family? No!
President Obama's plan for Fannie and Freddie just repeats old mistakes.
The reviled companies are the only players in the secondary mortgage market
Fannie Mae and Freddie Mac, the government-backed guarantors of residential mortgages, hold a particularly reviled place in our political culture. They stand accused of taking a $187.5 billion government bailout (correct) and inciting the housing bubble and financial crisis (largely incorrect).
Why the next housing crisis could be worse than the last one
Unless the White House changes course, the next housing crisis will be worse than the last one
Any taxonomy of first friends includes a few familiar types. There’s the amiable glad-hander destined for the outer Cabinet, like George W. Bush crony Don Evans. There’s the scheming, scandal-prone loyalist, like the Clinton hanger-on Harry Thomason, of Travelgate infamy. And then there’s the discreet consigliere who serves alternatively as fixer, sounding board, chief surrogate, and all-around defender of the faith. Personal friends with such outsize influence are actually quite rare in presidential politics. Within recent administrations, only Valerie Jarrett really fits the profile.
It’s been noted by many that Mitt Romney’s task in Michigan is but a repeat of the one he faced in Florida and Iowa with Newt Gingrich: Confronted with a surging rival (in this case Rick Santorum), he must turn the guns of his “unaffiliated” SuperPAC (which raised more money, from only a handful of people, than his actual campaign last month) on the challenger hard enough to leave him smoldering in the dust by the time voters go to the polls.
In advance of today’s primary, the Republican establishment has gone into overdrive to convince Florida voters that Newt Gingrich is a faux-conservative, ethically challenged has-been. The collective Republican panic has been fun to watch, not least because some of the GOP all-stars condemning Newt are best known for their own ethical lapses and heated rhetoric.
This wasn’t the most exciting debate of the campaign. But it was the debate that best illustrated the underlying dynamic: Romney’s going to win, but he’ll be one of the most flawed candidates either party has nominated in recent memory. To see this, look no further than last night’s installment of the recurring Freddie Mac dustup. Gingrich opened by lazily accusing Romney of investing in Freddie; Romney effortlessly parried the charge, explaining that he’d only invested in a mutual fund that bought shares in the company.
Two quick thoughts about the Florida debate. First, while it was generally too flat and plodding to change any momentum, I think Romney learned something important tonight: He learned that he can provoke Gingrich into spouting all manner of nonsense—what a certain former House Speaker once called “pious baloney”—pretty much at will, just by pressing Newt on his influence-peddling days. No doubt the lobbying/Freddie Mac albatross will continue to weigh down Gingrich, just like the tax-return issue dogged Romney.
In the wake of the economic chaos brought on by the 2008 financial crisis, there have been widespread demands for accountability. And just last month, the Securities and Exchange Commission (SEC) declared that it had taken a bold step to hold certain individuals involved in the meltdown responsible for their actions. On Friday, December 16, the SEC charged six former executives of Fannie Mae and Freddie Mac with securities fraud, accusing them of misleading investors by understating the extent of their exposure to risky subprime mortgage loans.