Congressman who supported Fannie & Freddie says that he made a mistake
This from Fox News:
"Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong. By the way, I wish my Republican colleagues would admit that they missed the early warning signs, that Wall Street deregulation was overheating the securities market and promoting dangerously lax lending practices. When it comes to the debacle in our capital markets, there is much blame to go around for both sides."
Congressman Artur Davis, D-Ala
Labels: mortgagecrisis
posted by John Lott at 10:52 AM
5 Comments:
Yes, Congressman Davis is correct. The lack of proper government regulation of Fannie, Freddie, and Wall Street is what caused the sub-prime meltdown.
The other problem, of course, is the Fed flooded the credit markets with cheap money starting 2002 as an ill-advised clean-up effort for the dot-com stock market crash. This cheap money created the real estate bubble.
In America, we believe in Public-Private partnerships even when it comes to our financial bubbles.
Being from Alabama, it was a bright day when Representative Davis beat out former Representative Earl Hilliard for that district's seat (a seat in which the only race is when there is a challenger in the primary).
I'm probably diametrically opposed to Davis politically but I admire his honesty on this matter. It is a sad state of affairs that others can't do the same and admit that they were wrong at least about Freddie and Fannie.
Alabama tends to send our somewhat-honest politicians to DC... while the corrupt ones stay in Montgomery. :D
Truer words never spoken, Rail.
BTW, I'd love to hear some thoughts on Senator Shelby's opposition to the Senate's bailout bill.
I heard Senator Shelby on the radio the other day talking about it. Here is a link to the last hour of the show he was on: http://www.finebaum.com/media/archives/show/20080929_PFRN_Hour4.mp3
His segment starts around the 18:30 mark, if anyone is interested.
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