Having called a $700 billion dollar hail mary play, Legislators and politicians can return to the most pressing business at hand: blaming the other side for the problem.
It seems clear that the GOP line of attack has been and continues to be blame Freddie Mac and Fannie Mae.
CJR's Dean Starkman has gone over this - but it seems that the GOP play is to go after a segment of the economy where there clearly is Democratic culpability. The Dems (and the GOP) have propped up these two GSE's against all reform attempts. There's a perfectly valid story of corruption and graft there - but it's a symptom of the root problem, not the cause.
The fact that the members of the GOP (and a few Dems) can point to sounding alarm bells two years ago on Freddie and Fannie says nothing about their trying to avert the current mess. In 2006 mortgage brokers were still entusiastically writing garbage subprime loans to feed Wall Street's insatable demand for mortgage backed securities.
You can brag about spotting a crack in the levee back when it could have done some good - but if you ignored the mile-high tsunami streaking towards you at the time - I'm not sure you get much credit.
Late edit: AUL points out that the Big Picture is all over this one - and in greater detail.
1 comment:
Ritholtz has a pretty good summary of this stuff.
FanFred
Fannie and Freddie were late to the party and helping low income people was only a very small part of the problem. Bad actors at the mortgage houses and CDS's seem to be the tsunami. Unregulated naked 'insurance' short selling and long selling.
P.S. Don't read today's Big Picture stuff. It's rough.
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