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WORDS TO REMEMBER

September 17, 2008

The Tax Policy Blog takes a sardonic trip down memory lane to remind us how we got into the fine financial mess we are in. First we visit Congressman Barney Frank in 2003:

Fannie Mae and Freddie Mac have played a very useful role in helping make housing more affordable, both in general through leveraging the mortgage market, and in particular, they have a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing, and that is what I am concerned about here. I believe that we, as the Federal Government, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals. I worry frankly that there is a tension here.

The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disastrous scenarios. And even if there were a problem, the Federal Government doesn't bail them out. But the more pressure there is there, then the less I think we see in terms of affordable housing.

Thanks a lot, Barney. Now we visit the President of the Home Builders Association speaking out against stricter oversight of Fannie and Freddie in 2004:

If Congress follows Federal Reserve Chairman Alan Greenspan's advice to rein in Fannie Mae and Freddie Mac because they could conceivably one day pose a "systemic risk" to the nation's financial system, home buyers had better be ready for a far-less-accommodating home-finance system than the one they have grown accustomed to in recent years ("Greenspan says Freddie, Fannie need oversight," Money, Feb. 25).

Thank you, too, buddy.

At least one of our Congressional stalwarts isn't abandoning us in these troubled times: Rangel Refuses to Step Down as Ways & Means Committee Chair