Some conservatives have already begun attacking the GOP before they even get started. Blogger buddy Andrew 33 over at Allied Liberty News, is preparing a boiling cauldron of tar and collecting burlap bags of feathers.
I'm keeping my powder dry and I encourage others to give them some room. Still, there are some disturbing rumblings...
Republicans are already backing off of earlier threats to dismantle Fannie and Freddie. These pie-in-the-sky programs that encourage irresponsible financial dealings have cost us $134 billion in the last two years alone.
Republicans cheered on Jeb Hensarling, Representative from Texas, as he crafted legislation last year to kill the ghastly twins:
"Of all the dumb regulation that caused our economic crisis, none was dumber than that which created the (Fannie and Freddie) monopolies," Mr. Hensarling said in March. (WSJ - GOP Shifts on Fannie, Freddie)Alas, government largesse dies hard, and for some GOP statists, parting is such sweet sorrow…
A hasty end to the government's support of Fannie and Freddie would mean fewer Americans could get home loans, causing home sales and prices to drop even further and pushing taxpayers' cost for rescuing the mortgage giants even higher, said Rep. Randy Neugebauer (R., Texas), a former banker and housing developer who serves on the House Financial Services Committee.
"You'd cause Freddie and Fannie to have even larger losses than they'd already have," Mr. Neugebauer said. (WSJ - GOP Shifts on Fannie, Freddie)A Banker and a housing developer, eh?
Don’t suppose that would have anything to do with how Rep. Neugebauer comes down on this, do you? He concedes that home prices are still too high, but he supports keeping them artificially propped up. Spoken like a true crony crapitalist that is afraid of the free market.
He also reveals the truth that “fewer Americans would get home loans” as a result of ending this homebuyer-corporate welfare program. How is that bad? Too many people getting home loans is what got us into this mess. Stop Digging! Representative Neugebauer, Republican from Texas, is now officially part of the problem.
Next come the homebuilders, realtors, and mortgage lenders, hat in hand, begging a bankrupt government for special treatment...
"We don't believe that the private market — right now — is willing or able to provide the liquidity that's necessary to get us out of this," said Joe Stanton, chief lobbyist for the National Association of Home Builders. "To erode that support right now would be a disaster," said Vince Malta, a real estate agent in San Francisco and a vice president of the National Association of Realtors. (WSJ - GOP Shifts on Fannie, Freddie)... So let’s keep the bubble inflated.
They are all wrong.
If houses were being traded at market prices right now, and if only those who could establish financial credibility could buy them, the market would be on solid footing. It would be smaller and less active, but it would be financially sound. And that’s the problem for these crony crapitalists. The bankers, builders and realtors want turnover. Who cares if people can afford it or not? These industries that suckle at mama government’s ample teats won’t get stuck when irresponsible people get forclosed. Uncle Sam will pick up the tab! And they continue making their millions in transaction fees. This crap needs to stop now.
Like anything, Fannie and Freddie can be sold in the marketplace, maybe for a loss. At this point I don’t care. We stepped in dog doo and it’s time to scrape it off our shoe. Nothing will inject sanity back into the housing market like removing taxpayer-funded subsidies.
