Follow the Money

Fannie Mae and Freddie Mac successfully lobbied against any sort of oversight for decades. Go look at who they gave their money to. They owned congress with the top 2 recipients being democrat presidential hopefuls.

If you want a thumbnail sketch as to why all these loans are going bad, read this article. When the specter of failure is removed from the free market, prudence is forgotten.

As those in congress start to defend themselves, read this 2003 article from the New York Times. Here is Barney Frank (D-Mass) in 2003:

”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.”

Now Barney Frank yesterday 2008:

Separately, Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, plans a forward-looking hearing with economists on Wednesday to “begin a conversation about where we go with the capital markets,” a House aide said.

Frank plans “oversight of what happened this weekend with the Treasury and Federal Reserve,” and will look at “how bad the capital markets are, and what may be needed.”

“The markets are not self-correcting,” the aide said. “If they continue to not self-correct over the next several months, is there a federal response? There might be more federal intervention that’s needed. We’ll proceed cautiously, and that would be next year."

I wonder if Frank's committee will look into how he and his comrades blocked reforms 5 years ago.