Freddie, Fannie, and McNasty

Freeman editor Sheldon Richman has a great post at his Free Association blog debunking John McCain's recent claims to have supported reforms that would have kept Fannie Mae and Freddie Mac from going south:

He did not support converting those government-sponsored enterprises into organizations without access to government favors or an implicit guarantee of bailout. Rather he merely supported new "independent" government oversight of those privileged corporations.

[…]

The issue hasn't been lack of oversight, but intervention designed to countervail the market process in order to promote home ownership among people who couldn't otherwise have afforded it. Not coincidentally, this brought great profits to the financial, homebuilding, and real-estate industries. Nothing short of blocking Fannie's and Freddie's path to the taxpayers' wallets could have turned things around.

Whole thing here.

Comments

[anon]

"intervention designed to countervail the market process in order to promote home ownership among people who couldn't otherwise have afforded it."

What, are you against a "ownership society"???

Why does he hate ownership? What is this guy, some kind of communist?

[John-David]

I'm sure McCain's SEC man Andrew Cuomo would have exercised the proper oversight. After all, it's not like he didn't launch the new regime of "we must lend to anyone!"

[Naga Sadow]

So Ron Paul isn't getting a pat on the back for calling this one? How . . . unsurprising.

[The Wine Commonsewer]

Yes Richman is right, the entire system from the very beginning of FHA under King Roosevelt was designed to subvert the market and make it comfortable for ordinary folks to have long term home loans at decent rates.

Yes he's right, McCain never called for libertarianism.

However, that's apples and oranges. The apples being that McCain ain't no libertarian (drink). The oranges being that in 2005 a regulatory bill was defeated that would have largely prevented Fannie and Freddie from padding 20% of their portfolios with subprime junk loans.

As I recall, every single Dem voted against it. That would include the Great White Hope.

So, if you are looking for libertarian purity, which I am, McCain ain't it. No surprise there.

At the pragmatic level of reality, it is indisputable that McCain endorsed the bill in a speech on the Senate floor, which is why he says he supported reforms that would have kept these two trough feeding pigs from going BK.

Disclaimer: I think Wall Street should eat shit and die. They deserve what they get and it shouldn't be outta of our pockets. Said that to note that I don't have a horse in this race.

[Episiarch]

Said that to note that I don't have a horse in this race

My grandfather already took a hit for a couple hundred thousand. What do I care, it's just my inheritance.

Fuck Wall Street and fuck the bailout.

[The Wine Commonsewer]

My grandfather already took a hit for a couple hundred thousand. What do I care, it's just my inheritance.

Not THAT race. We all have a horse in that race.

I just meant that I'm not a McCain partisan.

[The Wine Commonsewer]

I just meant that I'm not a McCain partisan.

Or a Wall St apologist.

Hopefully they won't drag us into the abyss of 1933.

[Pro Libertate]

1933? You mean we're about to vote in the Nazis? Ye gods, I'm really out of touch 🙂

[nonPaulogist]

We don't need no water let the motherfucker burn.

[Cynical Asshole]

Hindsight bias... or blatant lies?

You decide!

*cough cough*

[Jesse Walker]

So Ron Paul isn't getting a pat on the back for calling this one?

We've done two posts about that already. Maybe more, I haven't been counting.

[Tulpa]

The problem is that the Dow index's rises and falls are seen by the general public as *the* indicator of how the economy is doing day to day. So when Wall St hits hard times, Joe and Jane Sixpack at home watching the news think the economy must be in the shitter, even though this may be a necessary correction for long-term economic health, and the effect on ordinary people may be minimal.

Hence why politicians will do anything to prop up the Dow while they're in office. Sometimes it's nice to be the canary in the coal mine: the owner always has an interest in you staying alive.

[R C Dean]

You mean we're about to vote in the Nazis?

Gosh, I thought we did that eight years ago. At least, that's what they tell me at Kos.