Thursday, July 17, 2008

Deep Inside Baseball: Fannie and Freddie

Novak names the names and asks a good question.

...there were Bush officials who urged drastic reform of Fannie Mae and Freddie Mac. But, according to internal government sources, Treasury Secretary Henry Paulson objected because it would look “too political.”

[Paulson] structured the bailout and was on the phone last weekend encouraging leading investment bankers to buy Freddie Mac bonds. Financial consultant Lawrence Lindsey, President George W. Bush’s former national economic director, told clients Sunday, “Surely things are somewhat amiss when a country’s finance minister plays bond salesman for a supposedly privately owned company.”

But hey!! Goldman, Sachs appreciated Paulson's efforts.

...Baker, Hagel and Sen. Richard Shelby, ranking Republican on the Senate Banking Committee, were rare members of committees with jurisdiction who took the issue seriously. The powerhouse Democratic overseers of the banking committees -- Rep. Barney Frank, Sen. Christopher Dodd and Sen. Chuck Schumer -- protected Fannie and Freddie.

Paulson certainly knows who his friends are:

Tuesday’s hearing was more than an hour old when Hagel became the first senator to ask whether the well-paid officials and directors of the mortgage companies should be held accountable for the crisis. “I’m not looking for scapegoats,” Paulson replied.

Right-O, Henry. That "resignation" stuff is only for suckas.

After all, this is only about $300 billion or so in potential taxpayer liabilites.

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