October 01, 2008
The great Thomas Sowell on bailout politics
Nothing could more painfully demonstrate what is wrong with Congress than the current financial crisis.Among the Congressional “leaders” invited to the White House to devise a bailout “solution” are the very people who have for years created the risks that have now come home to roost.
Five years ago, Barney Frank vouched for the “soundness” of Fannie Mae and Freddie Mac, and said “I do not see” any “possibility of serious financial losses to the treasury.”
Moreover, he said that the federal government has “probably done too little rather than too much to push them to meet the goals of affordable housing.”
Earlier this year, Senator Christopher Dodd praised Fannie Mae and Freddie Mac for “riding to the rescue” when other financial institutions were cutting back on mortgage loans. He too said that they “need to do more” to help subprime borrowers get better loans.
In other words, Congressman Frank and Senator Dodd wanted the government to push financial institutions to lend to people they would not lend to otherwise, because of the risk of default.
But it's still the Republican Party's fault, of course.
(H/T Scott Gillies)
*A chaotic mess that might be compared to group sex, in which participants are so intertwined and intermingled that they might penetrate each other rather than their intended target. Its more precise usage describes a particular kind of Catch-22, in which multiple complicated problems mutually interfere with each other's solution. The looser usage, referring to any chaotic situation, probably prevails.
Posted by George Moneo at October 1, 2008 10:51 AM
Comments
Nothing there that I disagree with but, other than getting rid of Fannie Mae and Freddie Mac(not a bad idea), I don't see where Sowell recommends a different course of action than what's currently on the table. While quoting Greenspan's testimony about his concerns over the viability of Fannie Mae and Freddie Mac, Sowell doesn't bring up that Greenspan recommended people getting into ARMs at the same time. Greenspan was as much part of the problem as Frank and Dodd. Sowell mentions the Community Reinvestment Act, but doesn't call for its repeal. Maybe that's implied, but we need to call loudly for getting rid of the CRA and the federal strong-arming of banks to make bad loans.
I'm not sure how to get around the Dem's hanging this mess around the Republican's necks. They're experts at this crap and whenever we try to play by their rules, we get labelled as "mean spirited" <sigh>...
Posted by: Diogenes ![[TypeKey Profile Page]](http://www.babalublog.com/nav-commenters.gif)
at October 1, 2008 11:46 AM
You won't get an argument from me about CRA. They have to scrap the whole edifice and restore sanity and sound business practices to the financial services industry.
Posted by: George L. Moneo at October 1, 2008 11:56 AM
SOWELL for SEC. TRASURY! -S-
Posted by: Dr.Shalit at October 1, 2008 12:33 PM
I don't give a damn about Barney Frank's homosexuality, but I definitely care about the fact he happens to be a slimeball. He absolutely has no shame (and yes, that includes, but is NOT limited to, the business with the male prostitute or pimp or whatever he was). Frank is a textbook case of a sense of entitlement on steroids run amok. He feels he can get away with anything because he can always play the oppressed sexual minority card, he can always use the charge of homophobia as a weapon, and he has a major more-socially-evolved-than-thou attitude. The guy is a sleazoid opportunist, pure and simple. Truly, deeply disgusting (but perhaps not as much as the fact he keeps getting re-elected). Ugh. Make that double Ugh.
Posted by: asombra at October 1, 2008 12:49 PM
I'd say something about Dodd, but no comment is really needed about him on this blog. He stinks on ice.
Posted by: asombra at October 1, 2008 12:51 PM
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