Little Ricky’s House Of Cards Tumbles Down

I give you Former Senator Man-On-Dog in the Inky today (here)…

Over the past year, Americans watched President Obama and congressional Democrats use caustic anti-business rhetoric to rally support for nationalizing major parts of the auto industry, increasing government involvement in health care, limiting executive compensation, and abolishing much of the private sector’s role in student loans.

Next up, Democrats have set their sights on the financial-services sector. One would think that reforming the government-created entities at the epicenter of the 2008 crash, Fannie Mae and Freddie Mac, would be first on their agenda. One would be wrong.

Why? Because these quasi-governmental entities were created and are controlled by Democrats in Washington. If Fannie and Freddie were a creation of the marketplace, Democrats would have made them public enemies Nos. 1 and 2 long ago.

Little Ricky then goes on to criticize President Clinton for inflating the housing bubble.

Yes, I’m serious.

And as far as blaming the Dems for what has transpired with the mortgage giants, this tells us that former Dem Sen. Paul Sarbanes (of “Sarbanes-Oxley” for the uninitiated) warned that “ideologues” have created an impasse over trying to pass GSE reform legislation in 2003 (GSE stands for “government sponsored enterprises,” but for our purposes, we’re basically talking about Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System; S.1508, the reform bill championed by former-Dem-turned-Repug Richard Shelby, was opposed by Bushco because “its receivership provisions were not strong enough,” which, somehow, I think could have been addressed if they weren’t more concerned with scuttling it outright).

As noted in the prior post, though, a fight took place in 2005 over GSE reform in which “conservative Republicans (were) already bracing…if Shelby’s bill contains any measure that would require the two lending giants to divert a portion of their profits.” And the National Association of Home Builders opposed the 2006 bill from Shelby because it “failed to adequately address the nation’s housing needs” (not sure exactly what that was all about, but again, couldn’t that have been worked out with the NAHB first? After all, they’re a “trade association based in Washington, D.C.,” which automatically makes me inclined to think lobbyists and big bucks, the primary audience for Repugs and too many Dems also).

So what eventually happened? It was taken over in 2008 by Republican President Former Highest Disapproval Rating in Gallup Poll History and put under the Office of Federal Housing Enterprise Oversight (here) under James B. Lockhart III, who rebuffed New York Attorney General Andrew Cuomo when the following occurred the year before (from here)…

WaMu has not yet been included in the (Cuomo) suit but earlier this week Cuomo demanded that Freddie Mac and Fannie Mae each appoint an Independent Examiner to review mortgages and the underlying appraisals that the two GSEs have purchased with particular emphasis on those purchased from WaMu.

And remember, this action occurred in ’07 before Fannie Mae and Freddie Mac were fully taken over by OFHEO (and in response, Lockhart basically told Cuomo to get lost, since it was a federal matter).

I think it might have made more sense for Lockhart to cooperate with Cuomo in the investigation since, as noted here, we’re still dealing with the fallout of the housing crisis that was fully underway when Cuomo decided to act, as opposed to Lockhart.

And just to remind us all, Cuomo is a Democrat and Lockhart is a Republican (and here is a timeline of Bushco telling Congress – which, at that time, was run by Repugs – basically where they can go with any notion of reform for real).

I’m not going to tell you that the Dems are completely innocent in the matter of the economic mess caused by the explosion of the mortgage bubble either; after all, they didn’t get “cramdown” legislation passed either to get underwater mortgages restructured, though they did try. However, they are a hell of a lot less culpable here than the opposition party.

Rick Santorum is an utterly unrepentant partisan liar. The fact that he parades himself as a Catholic of piety and still writes these noxious words just about makes me physically ill (and more fool the Inky for continuing to give him column space).