Democrat Hypocrisy On Fannie And Freddie

September 13, 2010

Contributed by Moe Lane (redstate.com)

This is a copy of a letter from 2004 House Democrats and sent to then-President George W Bush. In it, the signatories complained that the administration had taken a hard line with ‘housing-related government sponsored enterprises’ (GSEs) such as Fannie Mae and Freddie Mac by insisting on emphasizing fiscal prudence and responsible lending over increased affordable housing access. The relevant section?

We have been concerned that the Administration’s legislative proposal regarding the GSEs would weaken affordable housing performance by the GSEs, by emphasizing only safety and soundness. While the GSEs’ affordable housing mission is not in any way incompatible with their safety and soundness, an exclusive focus on safety and soundness is likely to come, in practice, at the expense of affordable housing.

Needless to say, this letter more or less completely subverts the narrative - lovingly created during the 2008 campaign, and kept up ever since - that the entire housing meltdown was really the (racist) Republicans’ fault.  Barney Frank is particularly outrageous, here: he’s gone from being Freddie Mac’s most devoted patron to calling for its dissolution without once explaining (or apologizing for) his own role in the mess.  Which is a strategy that worked fine in 2008; but it isn’t 2008 anymore.

Several additional thoughts on the matter:

1. I think that we have established by now that the unprincipled expansion of Fannie Mae and Freddie Mac - fueled by Democrats (including Maxine Waters, who is under investigation right now for using TARP money to bail out her husband’s residential loan-happy bank), by the way - is incompatible with promoting ’safety and soundness.’
2. I’m pretty sure that having our GSEs in a state of perpetual bailout is doing even more to hurt access to affordable housing.
3. The signatories of the letter are, to the best of my knowledge, either all still in Congress or have had their seats taken by another Democrat.  This should be repaired: there is a list below.

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