Monday, July 26

fixing the real problem

In today's WSJ, Brian Carney (subscription only) writes the authoritative column on Fannie and Freddie and their role in the 2008 financial collapse.

The Democrats insist Fan and Fred had nothing to do with the meltdown - which is just another lie they've successfully spun, with the aid of the Journolist press -- but how could that be true?

It can't since Fannie and Freddie underwrite almost all new home loans.  They own/guarantee half of all outstanding mortgages.  Democrats say greedy banks were the problem by taking too much risk and making irresponsible loans.

But Carney calls this 'nonsense,' because "Fan and Fred (and the Democrats who control them) distorted the housing and credit markets, took advantage of government guarantees to operate at leverage ratios that would have made Lehman Brothers executives blush and finally, predictably, collapsed under the weight of that leverage and their bad bets on the housing market."

Yet, all the Democrats ever say about Fan and Fred is that they'll get 'around' to fixing them 'eventually.' It reminds me of OJ Simpson promising to search for his ex-wife's "real killers."

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