Check out this article from the NY Times regarding the mortgage crisis we're in:
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry...Now before you jump up and scream Well, it is about time President Bush did something about this issue, let me direct you to the full story which was publish in the NY Times on September 11 ... 2003
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.
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.
The story continues (emphasis mine):
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.Now I would be the first to stand-up and say Sure, the Democrats were against the Bush bill, but weren't the Republicans in the majority? And yes, they were.
”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.
It comes down to the point I've driven home in this humble blog time and time again: Conservatives - particularly Fiscal Conservatives - know best. Far too many members of Congress who are Republicans consistently forget this, and that's why they've lost their majority.
But do note the main complaint from Reps. Frank and Watt: poorer families would not be able to buy homes. Excuse me: but I couldn't afford my home until I reached a point in my life/career where I could sustain one! The fact that these people couldn't afford a home is the precise reason WHY they should have stayed in an apartment, or a smaller home, until such time the could.
Clearly, President Bush knew this dark day was on the horizon. Too bad he couldn't count on his own party. They've paid the price, and now so do the rest of us.
h/t Macsmind Sphere: Related Content
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