GSEs (government sponsored enterprises) especially Freddie Mac and Fannie Mae are at the heart of the banking bubble that spurred our greater economic malaise. Not to let the naked shorters off the hook, but in the recent perfect storm, the unbridled lending made possible by the politically driven lending policies are the eye of the storm. There is plenty of blame to go around, and certainly neither of the major parties has clean hands in the matter, there is a lot of mendacity in the current debate. So let us turn to some video from the recent past and compare it to the congressional hearings on this subject from four years ago.
Bill O'Reilly has a bitter contretemps with Chairman Barney Frank - classic video as the populist expresses his high dudgeon over the economic mess we find ourselves in. All fingers point in all directions except for within.
Nancy Pelosi and democrats display their mendacity and cluelessness on the subject of markets, especially Fannie Mae and Freddie Mac:
And more video from the hearings four years ago, with republicans trying to rein in the out of control GSEs and democrats defending them and their hero, Franklin Raines, political operative appointed to head Fannie Mae, and his enormous bonuses, totaling over ninety million dollars over a little over five years. In a related event, Raines recently had to relinquish some of these ill gotten gains after losing a lawsuit over fraudulent earnings statements that enabled the inflation of the bonuses.