Wednesday, September 17, 2008
Consciousness of Guilt
In this vein, in my experience outside a criminal trial, the first one to say, 'I didn't do it,' should be the prime suspect.
I give you Exhibit A, Nancy Pelosi, asked about who was responsible for the recent collapse of several companies involved in financing or holding 'mortgage bonds' She often has a difficult time being succinct, but her response was basically, 'We didn't do it."
Let's look just at the Fannie/Freddie Mac debacle. My source, from September 11, 2003, is the New York Times:
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.Gee, I wonder who opposed this plan? Can the New York Times shed any light?
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.
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.(emphasis added).
''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.''
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
Oh. The Democrats killed an oversight program of Freddie and Fannie 5 years ago. So it's good to see Ms. Pelosi is as accurate as usual.
(h/t Minuteman McGuire)
Republican's have been adamantly against regulating banks, investment banks and insurance companies for decades.
Now you reap your reward.
The entire fiancial mess that is the result of the subprime mortgage fiasco which is the result of derugulation, specifically in the form of the Gramm-Leach Bliley Financial Modernization Act of 1999 that repealed a portion of the Glass-Steadman Act of 1933 that prevented commercial banks from acting like investment banks.
Overregulation is bad but obviously, no regulation is worse.