The Volokh Conspiracy is kind of a one-stop for debunking
Sarah Palin's first gaffe?
Sarah Palin's hiding from the press?
Sarah Palin's big honkin' scandal?
Sorry, I don't think so.
- Sarah Palin's first gaffe? Not really.
Ah, but let's not totally dwell on Sarah today. As yesterday's USA
Today headline cheerfully put it: "Taxpayers take on
trillions in risk in Fannie, Freddie takeover". Who do we have to
thank for that favor?
One guy is Congressman Barney Frank, as described by the WSJ editorial page today:
Taxpayers are now on the hook for as much as $200 billion to rescue Fannie Mae and Freddie Mac, and if you want to know why, look no further than the rapid response to this bailout from House baron Barney Frank. Asked about Treasury's modest bailout condition that the companies reduce the size of their high-risk mortgage-backed securities (MBS) portfolios starting in 2010, Mr. Frank was quoted on Monday as saying, "Good luck on that," and that it would never happen.
At EconLog, econ prof Arnold Kling compares statements from naive newbie Sarah and seasoned old pro Barney and finds that the former might be more in tune with reality than the latter. In response to the Frank assertion that the FMs were necessary to "subsidize the construction of affordable rental housing and lower borrowing costs for low-income home buyers," Arnold points out:
In the United States, we have a huge inventory of unoccupied homes. We have trillions of dollars of mortgage debt. We need a government-sponsored enterprises to encourage more homebuilding and more debt about as much as we need a government enterprise to stimulate teenagers to want more sex.It's been a long time since I was a teenager, but … yeah, I get what he's saying.
There's certainly plenty of Fannie/Freddie blame to be extended to both parties. The media are at their worst in dealing with such issues. Unless an issue can be framed as a partisan Elephant-Donkey fight, they quickly get confused and uninterested.
The media also has an inherent pro-government bias.
Hans Bader is irate about how that impacts
the Fannie/Freddie coverage. Summary:
Many reporters are so ideologically invested in depicting the mortgage crisis as the result of a lack of government involvement that they simply cannot accept the reality that Government-Sponsored Enterprises were at the root of the problem. Government meddling, along with federal regulatory pressure on lenders to promote “affordable housing” and “diversity,” helped erode traditional lending standards, resulting in more risky mortgage loans to irresponsible people with bad credit.But thou shouldst, yea verily, read the thing in its entirety.