NYT: Mitt and Newt Hate Fannie and Freddie [View all]

[flpoljunkie]

January 27, 2012, 4:30 PM
Mitt and Newt Hate Fannie and Freddie
By DAVID FIRESTONE


Newt Gingrich and Mitt Romney talk during a commercial break at the Republican presidential candidates debate in Jacksonville, Fla., Thursday, Jan. 26, 2012.

That was made clear in the report last year from the Financial Crisis Inquiry Commission, which found that Fannie and Freddie participated in risky mortgages only by following rather than leading Wall Street and other lenders.

“We conclude that these two entities contributed to the crisis, but were not a primary cause,” the commission wrote. And it said the two agencies’ bonds – which Mr. Romney and Mr. Gingrich were accusing each other of owning through mutual funds – “did not contribute to the significant financial firm losses that were central to the financial crisis.”

Republicans would love for voters to believe that the government, through the dark arts practiced by Fannie and Freddie, brought on the crisis by encouraging irresponsible people to buy houses. This is just an effort to distract from the real perpetrators: the banks and lenders that dreamed up and pushed subprime loans, and the Wall Street firms that packaged them into toxic securities.

If the presidential candidates were serious and not feigning outrage about Florida’s foreclosures, they would acknowledge what really happened. But that would require admitting that the Dodd-Frank law to reduce private-sector abuses is potentially useful, and that President Obama and the Democrats took an important step in passing it.

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