Late yesterday Portfolio.com reported that a bunch of powerful Washington politicians were given below market loans by Countrywide Financial. Among those receiving “special” loans that saved them thousands of dollars were former HUD Secretary Alphonso Jackson and Senate Banking chairman Chris Dodd (D-CT). Rounding up the morning’s news for his readers, online left leader Matt Stoller summarized the Portfolio story and then blithely comments: “Go free market!” Go free market?!? This story has nothing to do with the free market and everything to do with the inevitable rent seeking behavior …
Jim Johnson, the man recently chosen by Sen. Barack Obama to search for a VP candidate, is under fire for receiving millions of dollars in below-market loans from Countrywide Financial Corp. chief executive Angelo Mozilo. Private entities like Countrywide are free to give generous loan agreements to whomever they want, so there is nothing technically illegal about what Johnson did. Just like there is nothing technically illegal about the $21 million that the government-sponsored entity Fannie Mae paid Johnson for his work as CEO of Fannie in 1998. However, the …
Just like any organized crime group, the Association of Community Organizations for Reform Now (ACORN) has a long and established history of using fraud, deceit and intimidation to achieve its goals. ACORN uses intimidation to shake down corporations for operating funds, deceives its own employees into supporting causes they don’t believe in, and cheats the entire country by submitting fraudulent voter registrations. ACORN is also adept at co-opting government power to fund and legitimize a criminal enterprise. It has been winning federal money since the Carter administration and routinely receives …
At the height of the “mortgage crisis” liberal commentators gleefully claimed recent financial turbulence was proof that free markets didn’t work. If only the housing market in this country was actually free. In actuality, two government-sponsored entities, Freddie Mac and Fannie Mae, have used their guaranteed access to federal credit to establish an 80% market share in the mortgage reselling industry. As with most government interference in the marketplace, Freddie’s and Fannie’s government-sponsored advantages have encouraged irresponsible behavior that ultimately has placed the American taxpayer at risk. Freddie Mac and …
The Washington Post reports today that “Senate negotiators broke off talks last night without striking a deal to rescue hundreds of thousands of homeowners at risk of foreclosure, but they said they were close to an agreement.” Let’s hope they don’t get any closer. A key part of the housing bailout plan includes upping the size of the loans Freddie Mac can buy and resell from $417,000 to $730,000. Without Freddie’s ability to buy these jumbo loans, the rest of the housing package won’t work because the securities industry will …
A publicly traded corporation announces a $2.2 billion quarterly loss, a dividend cut and warns that steeper losses are sure to come. One might expect such a company’s stock to go down on such dire news. But not Fannie Mae! On the very day Fannie revealed nothing but bad performance news to investors, its stock went up 9% to $30.81. How is this possible? We’ll give you a hint: big government market intervention is involved. The New York Times explains: “Their optimism stemmed from the belief that Fannie Mae is …
The United States likes to think of itself as a model of free markets. Unfortunately, in far too many sectors of the economy the reality is that the federal government already plays a huge role. Housing is a perfect example. The two Government Sponsored Enterprises (GSE) created to help the feds muck around in the housing market, Freddie Mac and Fannie Mae, already dominate the mortgage industry, handling more than 80% of all mortgages bought by investors in the first quarter of 2008. At the urging of politicians determined to …
Losses are mounting. The situation shows no sign of getting better. It’s clear that U.S. government intervention has made the problem only worse. The economy has been directly affected and Americans exposed to trillions in new debt risk. Leaders now talk of redoubling government efforts. It’s time for a change in course … in federal housing policy. In the second half of 2007, Fannie Mae and Freddie Mac — the two government-sponsored enterprises (GSEs) created to help Americans afford homes — recorded losses totaling about $9 billion. The National Association …
