Video: a few more Democrats lying about Fannie and Freddie

Because these people should get a lot of exposure.



Includes Barney Frank on "safety and soundness." What did Franklin Raines do to earn close to $90 million in bonus pay? If he's that good, he ought to be President now.

Bank failures were caused by government

Peter Wallison's piece in the WSJ has a snappier title:

Barney Frank, Predatory Lender

Almost two-thirds of all bad mortgages in our financial system were bought by government agencies or required by government regulations.

The left cannot have it both ways, blaming the private sector for subprime lending while absolving the government policies that created the demand for subprime loans. If the financial crisis was caused by subprime mortgages and predatory lending, the government's own policies made it happen.

Wanna bet they can't have it both ways? That's logic. The Obama-Pelosi-Reid axis don't use that old-fashioned stuff any more. They'll have it any way they want it.

Seriously, read the whole thing. And don't blame the banks, or "deregulation."

And speaking of Democrats and mortgages: here's a video that would be funny if it weren't so sick. Democrats on the House Oversight Committee left the room to avoid voting on a subpoena for Countrywide Mortage records.

Bank of America, which has acquired Countrywide, has said it will release the information about the “Friends of Angelo” program as soon as it receives a subpoena. But that would require a majority vote by the House Oversight Committee, something that is very hard to achieve when the majority party walks out on the vote, as Hodes and his colleagues did on Thursday.

No shame, no oversight. None so blind.

Thanks to Glenn Reynolds.

Barney Frank wants to roll the dice again

Barney Frank in 2003: "I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing…"

In the WSJ this morning: "After two years of telling us how lax lending standards drove up the market and led to loans that should never have been made, Mr. Frank wants Fannie and Freddie to take more risk in condo developments with high percentages of unsold units, high delinquency rates or high concentrations of ownership within the development."

That last one was so much fun, he wants to do it again.

Thanks to Veronique de Rugy at The Corner, who also links to some discussion at CNBC.

Not deregulation, but bad regulation

Via Veronique de Rugy at The Corner, Niall Ferguson in the NYT Magazine:

It is more than a little convenient for America’s political class to blame deregulation for this financial crisis and the resulting excesses of the free market. Not only does that neatly pass the buck, but it also creates a justification for . . . more regulation. The old Latin question is highly apposite here: Quis custodiet ipsos custodes? — Who regulates the regulators? Until that question is answered, calls for more regulation are symptoms of the very disease they purport to cure.

Related: Barney Frank bullying a hedge fund. That was back in October, though, before the change in administrations. Now that the President is doing the bullying, the old Latin question will be even less likely to receive an answer.

And some comments at Althouse.

Fannie and Freddie want some more

Funny how billions just get lost in the trillions being tossed around in Washington.

Media Still Covering Up The $400 Billion Fannie And Freddie Scandal (FNM, FRE)

This morning, Fannie Mae (FNM) announced that it had lost another $23 billion in the quarter, and would have to call down $19 billion more in taxpayer support. It also said that it would face losses as far as the eye can see.

Do you know how much we've committed to backstopping Fannie and its partner-in-crime Freddie Mac (FRE)? $400 BILLION! Back in February that was doubled from the original $200 billion.

They just won't quit. Thanks to Glenn Reynolds.

The human mind simply cannot encompass numbers that big. Bill Whittle takes a stab at it in this PJTV video, "Mountains of Money." Still, boggle is about all that one can do. The politicians who are slinging this money around like spaghetti at a food fight do not comprehend the numbers, either. The difference between them and normal human beings is that they don't even try to comprehend, so they don't boggle!

Quick hits

Glenn Reynolds links to Jules Crittenden: "What are we on, Day 103? I think that Change shark just officially got jumped." Seems that Obama will be reviving the military tribunals for Gitmo inmates, the ones he had previously condemned. That is, for the inmates he does not plan to release onto the streets of the US, with assistance (which would mean cash and what else?) to help them get settled.

Via the Crittenden link above, Gateway Pundit: "Al-Qaeda in Iraq leader Abu Omar al-Baghdadi has close ties to the Saddam regime. [… much else …] Remember this the next time you see a mainstream media report claiming there was no links between Saddam and Al-Qaeda."

Fox News: "The Obama administration has asked a federal judge to throw out a lawsuit against Iran filed by Americans held hostage at the U.S. Embassy in Tehran 30 years ago."

Peter W. Huber: Bound to Burn. TigerHawk calls it "[t]he best article you will read on why it is not merely futile, but counterproductive, for rich countries to struggle to reduce their emissions of carbon dioxide," and has comments.

Stages of Denial: Take pity on the left as it grapples with the tea party revolt.

Putting MADD in Charge of America's Highways: President Obama's troubling nominee to head the National Highway Traffic Safety Administration. To go with that, The Dangers Of The Drinking Age: The government pressured states to raise it to 21. So why didn't the move save lives?

Obama says, "I would love to get the U.S. government out of the auto -- auto business as quickly as possible.… I don't want to run auto companies." Meanwhile, the government is moving even deeper into the auto business: 'Cash for clunkers' kicks in gear. Subsidies at both ends, the sellers and the buyers. That ought to do it! Inline update: Katherine Mangu-Ward at Hit & Run points to a NY Times item on this with a lot of smart comments.

Barney Frank is messing with the money again, with The Mortgage Reform and Anti-Predatory Lending Act of 2009. Nick Gillespie says, "Frank is nothing less than a trickster figure in American politics." There's a great graphic, oh, what the heck, here:



Some history: The Assassination of Ngo Dinh Diem, by Peter Kross.

More disgusting lefties, indulging in ad feminam about Carrie Prejean: Reynolds links to Hot Air. TigerHawk links to GayPatriot. These videos are not safe for anyone. Partial transcription, and commentary, at the Daily Howler. Did Michael Musto actually compare Carrie Prejean to a "Klaus Barbie doll?" Good grief. Meanwhile — could Perez Hilton possibly be embarrassed? If not why this copyright fight with Patterico?

Feats of Strength at the Cocktail Competition: Tasting 150 liquors in two days (via)

Butterfly effect: Spitzer, Greenberg, and AIG

If Eliot Spitzer had not been such a self-aggrandizing, aggressive grandstander of an A.G., would AIG have had it better the last few years? If Spitzer had not forced the long-time CEO from his post, the timeline of the last few years would be different. Could it possibly have been worse?

Charles Gasparino in the NY Post: BLAME SPITZER: HIS AIG PROBE TRIGGERED FIRM'S BIGGEST MISTAKE.

Thanks to Glenn Reynolds.

Confirmation of an expectation

I asked a couple of financial types the other day, "Do you think the banks will ever become private again?" They said something along the lines of, "Sure, the banks will pay back the loans and everything will be normal." I asked that question because I had heard that the government was refusing offers of repayment. I couldn't think of specifics at the moment, though, so let it pass without following up.

Now Glenn Reynolds points to Le·gal In·sur·rec·tion, where William Jacobson cites the Financial Times and Forbes to say that some of those bailed-out banks will not be allowed to repay those loans.

I'm tempted to quote the whole thing, but the comments are good, too, so I'll leave it there. Well, maybe just a little:

It is one thing for the government to lend money to banks to help the banks survive. It is someting quite different to use the lending to maintain control of the private sector when the specific borrower-bank no longer needs the money. And the greatest irony is that many banks which didn't want or need TARP money took it at the insistence of the feds, and now they can't pay it back.

This is the sort of "fascism" that Cody Willard was talking about, that led Jon Stewart maliciously to misquote him following the Tax Day Tea Parties: the penetration of private enterprise by the tendrils of government.

Alternate title: Here it comes.

Update: And from Megan McArdle, No Parting from TARP: "Once you take the King's Shilling, apparently you've enlisted for life--and your Congressional drill sergeants reserve the right to change the rules of your employment at will."

More at Reason: Is the Government Acting Like a Payday Lender?

Santelli update

There are a couple more Santelli clips at Liberty Maven, via Instapundit.

(I would have added this to the other Santelli post, but that has now become uneditable. I now have two posts with embedded MSNBC videos, and both of them are uneditable. This might be a pattern. I'll add a "Santelli" label, to bring these up together.)

Santelli speaks up

Someone, Rick Santelli of CNBC, is trying to speak truth to power. Of course power does not like hearing it. Let's get all the clips together. I dare say there will be more.

His initial outburst, on the trading floor of the Chicago Mercantile Exchange:



For comments, Althouse.

Robert Gibbs does some spinning, in a distressingly condescending tone, for a sympathetic and appreciative White House press corps:



Matt Lauer and Steve Liesman try to trivialize Santelli on the Today show:

Those are from Hot Air, where there are many comments.

And Chris Matthews, who thinks that people are facing "disclosure." (2:36 into the video.) Maybe he is thinking of all those Cabinet nominees who had trouble with disclosure of, say, tax records. Matthews has already disclosed the thrill he gets from hearing Obama speak, so his objectivity is not in question, that is, his bias is on his sleeve. (Or his pants!)


By way of Gateway Pundit, who has comments.

Santelli: "In America, contract law should be sacred." Makes sense to me. Matthews calls him "Ebenezer Scrooge," and says "You're up there with Rush Limbaugh and Sean Hannity." That's enough to make me wonder if Matthews has a contract with MSNBC, or if he does this TV work out of the goodness of his heart and whatever spare change he can find under the sofa cushions in the green room.

I enjoy listening to Santelli's Chicago vowels, as he speaks for truth, justice, and the American way. There's a website promoting the Chicago Tea Party (they plan to throw derivatives into the lake), and a Santelli for Senate campaign button. Roland Burris is looking likely to have a very short Senate term of service. Governor Quinn could establish his independence from the Chicago mob by appointing Santelli. He will not do that, of course, but he could, and it's entertaining to think about.

Update: Roger Kimball has a couple of comments at PJ Media: On the Gibbs remarks, My favorite American; On the Lauer-Liesman interview, Reinventing liberal guilt.

Even more Fannie and Freddie

At Cafe Hayek: Finally, someone noticed.

There are four factors that helped drive up the price of real estate in the United States and create the housing bubble: The GSEs (Fannie and Freddie), the Community Reinvestment Act, expansionary monetary policy starting in 2001, and the 1997 Taxpayer Relief Act that for the first time let people avoid capital gains on home price appreciation without having to rollover the gains into a bigger house. All of these factors pushed up the demand for real estate. But by how much?

And this follow-up: Good tax policy.

You don't want to tax-advantage one investment over another or you induce a disproportionate flow of capital into that asset. That's the tragedy of the last ten years that's hidden. Tax policy and what came afterward caused trillions of dollars (not millions, not billions, but trillions) from China and here and elsewhere to go into building new and bigger houses rather than into more productive assets.

Thanks to The News Junkie at Maggie's Farm.

At Reason.tv, Peter Wallison on how government intervention in the housing market has led to the current problems. (About half an hour of a man talking. You could make popcorn.)

At PJ Media, Roger Kimball asks Who caused the global economic crisis? (Hint: it wasn’t George W. Bush). He does translate the French, at the end.

Laffer: "The Age of Prosperity Is Over"

Talking heads on CNBC were discussing this on Monday. I hope he's wrong, but I would hate to bet against him. In the WSJ:

Twenty-five years down the line, what this administration and Congress have done will be viewed in much the same light as what Herbert Hoover did in the years 1929 through 1932.

That's Laffer as in "Laffer curve."

Cited in discussion at Jerry Pournelle's place.

Update: Speaking of Hoover, he was only in till March '33. It took FDR to keep the Depression going. FDR's policies prolonged Depression by 7 years, UCLA economists calculate.

"Dodd has guaranteed himself a permanent spot in the pantheon of the privileged oblivious."

Kevin Rennie of the Hartford Courant takes on Senator Dodd, in a link-rich report.

The senator, the reports tell us, in the midst of the meltdown, put the squeeze on the businesses that his committee oversees.

(via)

What kind of Cassandra ...

… am I? I predicted this stock market crash back in February 2007. But did I get into bear market mode at the end of August? Ha! If only.

It's bad enough to be a Cassandra who predicts doom only to be ignored by all who hear; how about being a Cassandra who does not even follow her own dismal advice? "Come in out of the rain, Hector! You're gonna get wet!"

To try to analyze why I failed at this: I underestimated the perfidy of the Democrats. I thought they would just put out in the media the usual stories claiming that the economy was bad, regardless of the actual numbers, and let it go at that. It never occurred to me that they were so desperate to win this particular election that they would go ahead and really try to tank the economy. Of course, since Democrats don't know what the economy is, they misfired; stock market, housing prices, these things are not the economy. They partake of the nature of the economy, but the economy is much more than these things.

But since the strategy was 2-pronged, "lose the war and tank the economy," when the first one failed, the second one had to be executed with that much more emphasis.

Remember 1929? Of course not. I don't either. If I were actually Hector Owen, from the novel, I would remember it vividly. (FDR on TV, and all.) After the crash, the factories and farms were all still there. It took FDR to start enacting policies requiring destruction of food, to keep prices up, when people were hungry; oh, I'm not going to expand (or expound, or expatiate, either) on this any further, just go read The Forgotten Man.

An Obama olio

A whole lot of open windows, not much energy to make a coherent post.

Barack Obama and the Strategy of Manufactured Crisis, by James Simpson. Thanks to blake for this one. It describes the Cloward-Piven strategy and its relationship to ACORN, Obama, and various foundations, and of course George Soros. Also at Simpson's blog. I mentioned this strategy, though not by that name, a year and a half ago: Got to break it before you can fix it.

Inside Obama's Acorn, by Stanley Kurtz. From last spring.

Why the press hides Obama’s lies, by Roger L. Simon at PJ Media. Lots of comments.

AT HOME WITH: Bernadine Dohrn; Same Passion, New Tactics, by Susan Chira, NY Times from 1993. At home with Mrs. William Ayers.

They named their children after some of their heroes. Their older son, Zayd Osceola Ayers Dohrn, was named in honor of Zayd Shakur, the Black Panther killed in New Jersey during a shootout with police in 1973, and Osceola, the Seminole chief who sheltered runaway slaves. Their 13-year-old, Malik Cochise, takes his names from Malcolm X (El-Hajj Malik El-Shabazz) and the 19th-century Apache chief who fought settlers encroaching on his land.

Not Quite Ready to Join the Crusade, by Victor Davis Hanson at PJ Media.

Hot Air has some videos: The Ayers connection. The third video includes a brief interview with John Murtagh, who wrote this, in City Journal last April: Fire in the Night: The Weathermen tried to kill my family. Inline update: at 7:34 in this last video, after the Murtagh interview, is a clip from a 1998 interview in which Connie Chung begs Ayers and Dohrn to repent of their violent actions. Their response is to fall all over each other with interruptions in their eagerness to say that they did not do enough. "I wish we'd done more." "We'd do it again." No ambiguity here.

The WSJ has Bill v. Barack on Banks: Clinton instructs Obama on finance and Phil Gramm.

A running cliché of the political left and the press corps these days is that our current financial problems all flow from Congress's 1999 decision to repeal the Glass-Steagall Act of 1933 that separated commercial and investment banking. Barack Obama has been selling this line every day. Bill Clinton signed that "deregulation" bill into law, and he knows better.

How allies of George Soros helped bring down Wachovia Bank, by Ed Lasky. If you didn't quite understand what was going on in that Saturday Night Live video that is so hard to find (try here!), the one with Herbert and Marion Sandler, this will lay it out for you.

Stanley Kurtz asks, "What exactly does a "community organizer" do?" in O's Dangerous Pals: Barack's 'organizer' buds pushed for bad mortgages, in the NY Post.

And here's one from last February on the Global Poverty Act, Obama's Global Tax, by Lee Cary in the American Thinker.

Just a couple more here. Powerline is keeping up with ACORN: "Is ACORN stealing the election?"

It is reasonable to ask whether ACORN is in fact a criminal conspiracy to subvert the voting rights of Americans. Which makes it all the more remarkable that Barack Obama paid ACORN $800,000 to register new voters, and then lied about it, falsely telling the Federal Elections Commission that the $800,000 went to a group called Citizen Services Inc. for "advance work."

ACORN's Criminal Enterprise, Continued. "At least nine states have now launched criminal investigations of ACORN…." Oh, look, they also have this video of Louis Farrakhan, last Feb 24, calling Obama the messiah.

Post-debate malaise

That was a lame excuse for a town hall meeting.

So McCain has also bought into this business of having the government rescue everyone who screwed up.

"That's why we're gonna have to go out into the housing market, and we're gonna have to buy up these bad loans, and we're gonna have to stabilize house, home values, and that way Americans can, like Allan can realize the American dream, and stay in their home."

"I think if we act effectively, if we stabilize the housing market which I believe we can if we go out and buy up these bad loans so that people can have a new mortgage at the new value of their home…"

AP: McCain would buy bad homeowner mortgages. "… stabilize home values …" sounds an awful lot like price controls. That worked out so well when Nixon tried it. If the market is not allowed to find the bottom, it will be in a metastable state, which will always need to be propped up artificially. Of course, now that the government is taking control of the banks, I suppose Congress will do a fine job of that.

Obama doesn't understand the difference between regulation of "the financial system" and regulating corruption in Fannie and Freddie.

VP debate

I just about wanted to throw something right at the beginning when Palin condemned "predator lenders" instead of going after the Democrats, who set up this whole CRA, Fan & Fred mess.

It got better after that.

Watching Biden throw the bull is almost enjoyable, in the way that one enjoys watching any master practice his craft. Almost, but not really, because the future of our country is at stake—and the future of our country = the future of the free world, aka Western civilization. He slings the BS so well that people don't call him on it. The US and France threw Hezbollah out of Lebanon? Please!

Jim Geraghty at NRO has a list. Part 1, Part 2. There may be more to come.

But possibly the most important and dangerous thing he said Thursday night was that he and Obama would somehow make it possible in cases where people were having trouble paying their mortgages for the principal to be adjusted! We have heard a lot of crazy talk from the Democrats in this campaign, but this is past crazy and into psychotic territory. Gerard Van der Leun calls this "just simply mind-numbing." (Like being hit with a brick?) Do read the comments. Donald Sensing says "Biden promises to destroy the American housing market." Hope and change, all right. Let's just change everything, and hope we survive. Might lose a few Kulaks along the way, but it's for the greater good.

A little more on Fannie and Freddie

Rather than update the Fannie and Freddie post again, here's a new one.

A nice collection of quotations from some of the legislators involved in the mess, from the WSJ, including:

House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .

Pesky "safety and soundness!" It would take a no-fun conservative to want to focus on those things. Rolling the dice is way more fun. And:

Senate Banking Committee, Feb. 24-25, 2004:

[…]

Sen. Christopher Dodd (D., Conn.): I, just briefly will say, Mr. Chairman, obviously, like most of us here, this is one of the great success stories of all time.…

From the WaPo, Where Was Sen. Dodd?

Sen. Christopher Dodd, the Democratic chairman of the Senate Banking Committee, has the gall to ask in a Bloomberg Television interview: "I have a lot of questions about where was the administration over the last eight years."

Barney Frank is also mentioned in the article, and he replied in a letter to the editor. The article was reprinted in the Hartford Courant, and drew some comments. I mentioned Sen. Dodd a while back, in this post.

Here's video of Bill O'Reilly going ballistic on Barney Frank. If you look closely, you can see that Rep. Frank actually does appear to have teeth, lowers at least. In the course of the confrontation, Rep. Frank mentions a bill passed in 2007. This WaPo piece about it, House Tightens Reins on Fannie, Freddie, tells us that the Administration wanted more regulation of Fannie and Freddie than the Democrats were willing to allow:

[I]n House action last Thursday, the bill was reshaped in a way that lessens the power of the new federal regulator of Fannie Mae and Freddie Mac over their mortgage holdings compared with an earlier version that moved through the House. An amendment adopted by voice vote puts some restrictions on that authority.

The Bush administration has insisted that the new regulator have the discretion and authority to reduce the companies' mortgage portfolios.…

Fannie Mae quickly signaled its satisfaction with the amendment limiting the new regulator's authority over the companies' mortgage holdings.

In other words, Republicans opposed this bill because it was not tough enough, but was simply an effort by Democrats to appear to be doing something, while not actually doing anything.

What, an update already? The Instapundit has a new video: What Just Happened?

One more: the Bovina Bloviator remembers, well, not personally, the crash of 1907, and how J.P. Morgan straightened it all out, in a smoke-filled room. No taxpayers' money required.

A few links for Fannie and Freddie

Link dump on the Fannie & Freddie mess (updated and bumped):

Jerry Pournelle has an overview. And more:

As I surmised, the bailout -- good idea or poor -- can't be made to happen until Barney Frank and Senator Dodd are allowed to wet their beaks. The Democrats want part of that pie. Obama's leadership abilities were put to the test, and apparently found wanting: even in the White House, with what all of them concede to be the financial health of the Republic at stake, no agreement is possible.… When the game is to restore confidence, it's important to act quickly. When the ship of state is being blown onto the rocks, it may be best to drop anchor; it may be best to raise sails and beat to windward; either course of action may work. Both will not work. Doing nothing is certain disaster.

Did Dr. Pournelle exclude a middle? Trying to do both at once, yes, sounds like certain disaster. Or did his sailing metaphor take control of my imagination, leading me to think that another possibility might be to reef up and, since our sailing vessel has been modified since the last time it hit the rocks, use our new engine to keep us off the lee shore. The engine being the SEC and all of the changes and controls on the securities markets that have been put in place since 1929. On the gripping hand, sometimes nothing is the best thing to do. Maybe the horse will learn to sing. One does not want to fall victim to what I have heard referred to as "Yes, Minister" syndrome: "We must do something. This is something. Therefore, we must do it." What would Calvin Coolidge do? Cool Cal went by the book, the book that had not been written yet when he was alive, the book that says on its cover, "Don't Panic."

Who caused "the biggest financial crisis since the Great Depression?" by Roger Kimball at PJ Media. Lots of comments; links to a video called "Burning Down the House," also linked below.

Andrew Cuomo and Fannie and Freddie: How the youngest Housing and Urban Development secretary in history gave birth to the mortgage crisis, by Wayne Barrett in the Village Voice.

How the Democrats Created the Financial Crisis: by Kevin Hassett at Bloomberg. Glenn Reynolds has a couple of reader comments.

A Mortgage Fable, editorial in the WSJ:

Once upon a time, in the land that FDR built, there was the rule of "regulation" and all was right on Wall and Main Streets. Wise 27-year-old bank examiners looked down upon the banks and saw that they were sound. America's Hobbits lived happily in homes financed by 30-year-mortgages that never left their local banker's balance sheet, and nary a crisis did we have.

Then, lo, came the evil Reagan marching from Mordor with his horde of Orcs, short for "market fundamentalists." Reagan's apprentice, Gramm of Texas and later of McCain, unleashed the scourge of "deregulation," and thus were "greed," short-selling, securitization, McMansions, liar loans and other horrors loosed upon the world of men.

Now, however, comes Obama of Illinois, Schumer of New York and others in the fellowship of the Beltway to slay the Orcs and restore the rule of the regulator. So once more will the Hobbits be able to sleep peacefully in the shire.…

The Real Culprits In This Meltdown, editorial in IBD. "Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it's dysfunctional, Democrats during the Clinton years are a prime reason for it."

Why our financial system nearly collapsed, the Anchoress: timeline, links, comments.

Doug Ross has a number of posts with graphics:

Jamie Gorelick, Mistress of Disaster.
Root Cause.
Fannie Mae: the New York Times rides to the rescue of the GOP.
Any Questions?
'Ya think?' Department.
Legacy.
The tale of Jamie Gorelick just keeps getting better and better.

Fannie Mae and the Vast Bipartisan Conspiracy: a list of villains in boldface, by Jack Shafer in Slate. Jamie Gorelick's photo is at the top.

Friends of Barack, editorial in the WSJ.

Obama Dollars, by Mac Fuller in the American Thinker.

Arnold Kling links to (among others) Tyler Cowen, who quotes Mindles H. Dreck on the effects of regulation. With all the screaming for more regulation we are hearing now, it's good to be reminded that "the answer is not to add one more vaguely described activity to the long-as-your-arm list of 'no-nos', but to shine an ever brighter light on the books and let the buyer discriminate." Dr. Dreck is currently blogging at TigerHawk's place, of course. Recently: "We have been force fed a super-sized trucker meal of stupid paper-pushing requirements while the basic risks of asset leverage went unaddressed."

Greed, Or Incentives? Richard Epstein on regulation, in Forbes. "Short term heroics are no substitute for dispassionate deregulation, which won’t happen so long as our political leaders are fixated on greed. Taking steps to prevent financial meltdowns is more likely to hasten their unwelcome arrival, so says the libertarian."

A little (more) history: New Agency Proposed to Oversee Freddie Mac and Fannie Mae, NY Times from 2003. "The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates."

My favorite mustelid has some things to say, as a small mammal selling in this market. One thing: "Blaming Wall Street operators for the current financial crisis is like discovering a fly-blown corpse and arresting the maggots for murder." Another thing: "Government has just stolen sixty thousand dollars from me. Let’s be clear about this: THE DEMOCRATS STOLE $60,000 FROM ME."

There is a video, "Burning Down the House," for those who would rather not do so much reading. And another video, with enough Barney Frank to make up for the lack of Barney Frank in the first video. Another video, from a 2004 hearing dealing with the Office of Federal Housing Enterprise Oversight; featuring Maxine Waters, Gregory Meeks, Artur Davis, Franklin Raines, and yes, Barney Frank.

Jenkins: Let Houses Find a Bottom

Megan McArdle posted on Wednesday on Fannie Mae's 4th quarter loss of $3.6 billion. Whew! Sooner or later that's going to start running into real money. (As Everett Dirksen apparently didn't say.) This leads commenter Fred to link to Holman Jenkins in the WSJ: Let Houses Find a Bottom.

We have nothing to fear but fear itself, a president once said, and thereupon embarked on a series of ad-libs some of which deepened and prolonged the country's depression.

[…] drawing out the correction prevents the market from finding a bottom. It prevents owners and shoppers alike from having confidence to judge what houses are worth. It bails out lenders and investors who incautiously or fraudulently financed home purchases for speculative buyers, which can only encourage more of the same behavior in the future.

There's more downside to house prices coming, it's just going to take longer to get there.