One of the more entertaining howlers of contemporary liberalism, is the outraged caterwauling about “Crony Capitalism” and the Bush administration. Not because the charge isn’t true, it certainly is. No, the problem is when it comes to crony capitalism the Democratic party is where its at, and always has been. It is just that it is papered over with all kinds mushy feel good rhetoric.
Did any of these people pay attention to the the Clinton years? Not that Clinton was any kind of exception. Nowhere has that been more plain than in the case of Fannie and Freddie.
Want to know who has been enabling, profiting from, and carrying water for Freddie and Fannie? Paul Gigot gives us the whole story, including who really didn’t benefit, even before they became a budgetary anchor:
Yet as studies have shown, about half of the implicit taxpayer subsidy for Fan and Fred is pocketed by shareholders and management. According to the Federal Reserve, the half that goes to homeowners adds up to a mere seven basis points on mortgages. In return for this, Fannie was able to pay no fewer than 21 of its executives more than $1 million in 2002, and in 2003 Mr. Raines pocketed more than $20 million. Fannie’s left-wing defenders are underwriters of crony capitalism, not affordable housing.
Who is one of the most vicious and self righteous defenders of Fannie and Freddie?
Trying to defend the mortgage giants, Paul Krugman of the New York Times recently wrote, “What you need to know here is that the right — the WSJ editorial page, Heritage, etc. — hates, hates, hates Fannie and Freddie. Why? Because they don’t want quasi-public entities competing with Angelo Mozilo.”
That’s a howler even by Mr. Krugman’s standards. Fannie Mae and Mr. Mozilo weren’t competitors; they were partners. Fannie helped to make Countrywide as profitable as it once was by buying its mortgages in bulk. Mr. Raines — following predecessor Jim Johnson — and Mr. Mozilo made each other rich. Which explains why Mr. Johnson could feel so comfortable asking Sen. Kent Conrad (D., N.D.) to discuss a sweetheart mortgage with Mr. Mozilo, and also explains the Mozilo-Raines tag team in 2003.
Read the whole thing. H/T: Coyote Blog
