Caroline Baum at Bloomberg imagines a reversal of the recent show trials held by Congress…
Just imagine if the tables were reversed. (Barney) Frank and (Maxine) Waters are seated at the witness table instead of perched on the hearing room dais. The questioning would go something like this:
Chairman Frank, on July 14, 2008, you made the following pronouncements about Fannie Mae and Freddie Mac, the two huge government-sponsored enterprises that are the key players in mortgage finance:
“Fannie and Freddie are fundamentally sound.”
“They are not in danger of going under.”
“Looking at the financials, they’re solid.”
You followed that analysis with a forecast. Referring to legislation before your committee to allow the Treasury to lend to and buy unlimited shares in the GSEs, you said: “We’re doing three separate things that make it much less likely—very, very unlikely—that we’ll have this kind of a housing crisis six months or a year from now.”
Less than two months later, Fannie and Freddie were wards of the state.
Congresswoman Maxine Waters (D-CA) isn’t spared:
“We do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines,” she said.
She went on.
“What we need to do today is to focus on the regulator, and this must be done in a manner so as not to impede their affordable housing mission.” That mission, as you noted, has seen “innovation flourish from desk-top underwriting to 100 percent loans.”
We all know how that worked out. Fannie had to restate earnings back to 2001, erasing $6.3 billion in previously reported profits.
Congress thinks Americans are stupid. It’s no different from con men who think they are smarter than their marks, or thugs who believe they can outwit the cops. While they may roll a mark or escape the police once or twice, their own inherent stupidity combined with their inflated egos inevitably lead to their downfall.
So far Frank, Waters, Dodd and the rest of the corrupt Democrats have gotten away with avoiding blame for the economic mess we are in. But “so far” never stretches to “forever,” and the worse things get the more likely Baum’s dream of putting these idiots in the dock will come true.