Mimsy Were the Borogoves

Editorials: Where I rant to the wall about politics. And sometimes the wall rants back.

Blaming the financial crisis on the reformers

Jerry Stratton, September 16, 2008

On Saturday, September 6, Sarah Palin warned us that Fannie Mae and Freddie Mac had become “too big and too expensive to the taxpayers”. The Democratic blogs and newspapers went into full frenzy: “Gaffe!” cried the Huffington Post. “Palin gloriously, fabulously unfit for duty” said McClatchey Newspapers a few days ago. Fannie and Freddie are private companies! They don’t cost the taxpayers anything!

But Fannie Mae and Freddie Mac aren’t private companies. They’re “government-sponsored enterprises” whose mistakes cost the taxpayers money. On Monday morning some of those headlines remained visible, but few new ones appeared: the news had hit that the taxpayers were going to have to pay hundreds of billions for Fannie and Freddie. Palin was right. Nor was this a surprise: the blank check had already been authorized by congress over the summer.

Now the Obama campaign is blaming President Bush for the lack of oversight, and trying to smear McCain with that blame. But it’s not surprising that McCain’s vice presidential candidate would be calling for Fannie Mae/Freddie Mac reform: thirteen years ago, McCain tried to privatize the FMs before they became a crisis. Democrats blocked it. And it isn’t even fair to blame Bush: five years ago Bush tried to create an oversight agency for the FMs, and Democrats blocked that, too. Two years ago, McCain tried once again to reform them; it never made it out of committee.

Maybe it’s time we started paying attention to their warnings on social security, before that becomes a crisis?

Updated to include the Federal Housing Enterprise Regulatory Reform Act of 2005.

  1. <- Horse Chestnuts
  2. Moving to McCain ->