On this day of the Florida primary, more details are surfacing concerning Newt Gingrich’s interesting relationship with Freddie Mac. You might call the relationship incestuous, but it’s not lobbying and it seems to be perfectly legal. Instead of historian, call him a team motivator.
Still don’t like it? Neither do I, and these types of contracts and relationships worth big dollars are a direct result of the federal government sticking its hands into areas of the economy they do not belong. Another symptom of the disease.
Referencing an interview given in 2006, published on the Freddie Mac website since pruned, Politico – take it with a grain of salt due to complete lack of context – quotes Gingrich.
“The housing GSEs have made an important contribution to homeownership and the housing finance system,” Gingrich said in the interview. “We have a much more liquid an stable housing finance system than we would have without GSEs. So while we need to improve the regulation of the GSEs, I would be very cautious about fundamentally changing their role or the model itself.”
Further Gingrich acknowledged that this is not a viewpoint conservatives normally embrace. “Well, it’s not a point of view libertarians would embrace,” he said in the interview. “But I am more in the Alexander Hamilton-Teddy Roosevelt tradition of conservatism. I recognize that there are times when you need government to help spur private enterprise and economic development.”
So you need to get the government involved in helping people greatly reduce the perceived risk of buying a home they may or may not be able to afford?
Of course, Politico indicates they have the complete interview … but is it not interesting they have not immediately released or linked to the full transcript?
What’s Romney got to say? Well, he’s been pointing out that Gingrich’s firm made big dollars during its relationship with the government sponsored entity and did not point out that what they (Freddie Mac) was doing was “wrong.”
How much money did Romney have invested in Freddie Mac and Fannie Mae again? Wasn’t it something like $500,000? What was Romney’s opinion of Freddie Mac and Fannie Mae back in 2007 and 2008 during the time he was running for president? (I did a Google News search and found nothing.)
That said, this little reminder from Sept. 11, 2003 and – believe it or not – the New York Times. Why didn’t Romney step up and point out what was wrong with the GSEs back when he was running for president in 2007? The issue was well know…
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
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 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. …
Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration’s package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company’s mission.
After those assurances, Franklin D. Raines, Fannie Mae’s chief executive, endorsed the shift of regulatory oversight to the Treasury Department, as well as other elements of the plan.
”We welcome the administration’s approach outlined today,” Mr. Raines said. …
What ever happened to those efforts? From the end of same article…
Significant details must still be worked out before Congress can approve a bill. 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.
”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.”