Considering they could have sat on their hands and relied on unhappy voters to give them big gains in November, I’m not too unhappy about the House GOP’s “Pledge to America.” Yes, it’s mostly filled with inoffensive motherhood-and-apple-pie language, but at least there’s some rhetoric about reining in excessive government. After eight years of fiscal profligacy under Bush, maybe this is a small sign that Republicans won’t screw up again if they wind up back in power. That being said, I was a bit disappointed that the GOP couldn’t even muster the courage to shut down Fannie Mae and Freddie Mac, the two corrupt government-created entities that bear so much responsibility for the housing mess and subsequent financial crisis. The best the GOP could do was to say “Since taking over Fannie Mae and Freddie Mac, the mortgage companies that triggered the financial meltdown by giving too many high risk loans to people who couldn’t afford them, taxpayers were billed more than $145 billion to save the two companies. We will reform Fannie Mae and Freddie Mac by ending their government takeover, shrinking their portfolios, and establishing minimum capital standards.” Is it really asking too much for Republicans to simply say “The federal government has no role in housing and Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development should be eliminated.” Heck, the GOP’s Pledge doesn’t even mention a penny’s worth of budget cuts for HUD. Here’s an excerpt from Peter Wallison’s Bloomberg column, which explains why Fannie and Freddie should be decapitated.
In a year when angry voters are demanding a reduced government role in the economy, it is remarkable that most of the ideas for supplanting Fannie Mae and Freddie Mac are just imaginative ways of keeping government in the business of housing finance. …This is pretty astonishing. One would think that something might have been learned from the recent past, when two New Deal ideas for government housing support–the savings and loan industry and the government sponsored enterprises, Fannie Mae and Freddie Mac–failed spectacularly. It cost taxpayers $150 billion to clean up the first and may cost more than $400 billion to resolve the second. …government policy that deliberately degrades loan quality or creates moral hazard will eventually cause devastation in the housing market. …Government involvement in housing finance is an invitation to disaster. As illustrated by the S&Ls and GSEs, no matter how such a system is structured, government support will hide the real risks.
[...] with the GOP Pledge to America. Why “reform” Fannie and Freddie, I asked, when the right approach is to get the government completely out of the housing sector. Jacob Sullum of Reason is similarly underwhelmed. He writes: In the “Pledge to America” they [...]
[...] moral of the story, though, is that the federal government has no business being involved in housing. Jim’s closing sentences are a pretty good summary of this outrageous situation. The Obama [...]
[...] moral of the story, though, is that the federal government has no business being involved in housing. Jim’s closing sentences are a pretty good summary of this outrageous situation. The Obama [...]
[...] previously explained that the federal government should have no role in housing and that the Department of Housing and Urban Development should be [...]
[...] for a Department of Energy either. Or a Department of Agriculture. Or a Department of Commerce. Or Department of Housing and Urban Development. Or Department of Education. Or a Department of Transportation. Or…well, you get the idea. [...]
[...] for a Department of Energy either. Or a Department of Agriculture. Or a Department of Commerce. Or Department of Housing and Urban Development. Or Department of Education. Or a Department of Transportation. Or…well, you get the idea. Like [...]
[...] for a Department of Energy either. Or a Department of Agriculture. Or a Department of Commerce. Or Department of Housing and Urban Development. Or Department of Education. Or a Department of Transportation. Or…well, you get the [...]
[...] GOP, for all intents and purposes, has just proposed to eliminate the Department of Education, the Department of Housing and Urban Development, the Department of Energy, the Department of Agriculture, the Department of Transportation, the [...]
[...] GOP, for all intents and purposes, has just proposed to eliminate the Department of Education, the Department of Housing and Urban Development, the Department of Energy, the Department of Agriculture, the Department of Transportation, the [...]
[...] already argued that there should be no federal government involvement in the housing sector and made the same argument on TV. And I’ve also shared some horror stories about HUD waste [...]
[...] GOP, for all intents and purposes, has just proposed to eliminate the Department of Education, the Department of Housing and Urban Development, the Department of Energy, the Department of Agriculture, the Department of Transportation, the [...]
[...] What’s also discouraging is that the government already is deeply involved in the housing market – even though this is an area where there is no legitimate role for the federal intervention. [...]
[...] What’s also discouraging is that the government already is deeply involved in the housing market – even though this is an area where there is no legitimate role for the federal intervention. [...]