It is growing increasingly more difficult to translate the comments coming from this administration concerning Fannie and Freddie.Treasury Counselor Michael Stegman gave quite the speech to none other than Treasury Master Goldman Sachs this past week.How does one rationally respond to one representing an administration that Judge Sweeney so appropriately said is “making it up as they go along”? To be fair Stegman’s speech attempted to cover so many avenues it was bound to be contradicting at times, Everyone was so quick to pounce on the negatives as usual I want to begin with what I see as positives.In his conclusion after pointing out the critical need for action and outlining the many reforms put in place to make the GSEs far safer he stated
“Nevertheless, institutionalizing these and other critical reforms in bipartisan legislation is by far the better course. Let’s be prudent; let’s have foresight; let’s find a bipartisan pathway to preventing another GSE bailout, which continuation of the status quo guarantees. We can do this, and we must do this.”
I really don’t want to stay in an endless back and forth with the administration as to their willingness to release the GSEs prior to 2016 but as long as they continue to send mixed signals I guess we will have to.If they truly wanted to clarify this, they simply could have stated “institutionalizing these and other critical reforms in bipartisan legislation is the only course.”
Stegman also made other vague comments that clearly leave the door open for a release:
“That is why we continue to believe that comprehensive housing finance reform is the only effective way forward, not narrowly crafted ad-hoc fixes.”
“As we have said repeatedly, the only way to responsibly end the conservatorship of the GSEs is through legislation that puts in place a sustainable housing finance system with private capital at risk ahead of taxpayers, while preserving access to mortgage credit during severe downturns.”
This has actually been a regular refrain from the administration, they could simply leave “responsibly” and “effectively” out and end this debate. Until then I will have to assume that one day we may hear them say that because of congresses refusal to choose the “effective””better” more “responsible” path we have no other option but to finish what we started to protect the taxpayers from future losses.After all, the only ingredient missing now is capital.
With that said I do admit that there were plenty of statements in the speech that could lead one to believe that the President has rebuffed his party’s most loyal constituents and chose not to listen to their calls for reform/release. At times, Stegman seemed to be channeling Peter Wallison like in these quotes:
“Allowing the GSEs to exit conservatorship within the existing framework that includes their flawed charters, conflicting missions, and virtual monopolistic access to a government support through the PSPAs exposes taxpayers to great risk and is irresponsible.”
“The critical flaws in the legacy system that allowed private shareholders and senior employees of the GSEs to reap substantial profits while leaving taxpayers to shoulder enormous losses cannot be fixed by a regulator or conservator because they are intrinsic to the GSEs’ congressional charters. And these charters can only be changed by law.”
Whether these were put there for the benefit of the lawsuits or to be a Red Herring I am not sure. I do admit that much of the overall tone of the speech did not look good for release.How President Obama could allow anyone in his administration to say such bold lies is disgusting. “leaving taxpayers to shoulder enormous losses”? How could a 40 billion dollar profit be an “enormous loss”?
The most shocking was “flawed charters, conflicting missions”. Seriously Mr. President? Flawed charters and conflicting missions? Are you kidding me? How does Rep. John Lewis feel about this statement? He got his head beaten in to bring these “flawed charters” into existence and you had the audacity to give another hope inspired sermon in Selma just days after Stegman threatened to derail decades of progress that ensure Blacks have access to Americas housing market?
Mr. President you have left Black America on the curb for the last six years and now this? Let me be the first to say that you may be Americas first Black president but on the path you seem to be on President Clinton will be Americas best Black president.
One thing that was very clear in Stegman’s statement is that our truth campaign continues to have quite the effect. Just the fact that they were forced to address many of these issues shows great progress. They know now that they can no longer comfortably lurk in the shadows.The best news of the week was when our reader’s latest efforts #FannieGate went viral on Twitter. This was an ingenious strategy suggested by “King Brian” in the comments section on Feb. 2nd
when he threw out these suggestions: “Fannie n’ Freddiegate or GSEgate Obamagate NetSweepgate FannieGate”. I would suggest that to make this as effective as possible we need to be sure to keep in mind that our objective is to enlighten people who know little to nothing of our struggle. Try and tweet things that clearly show the outrageousness of our governments actions.David Sims suggested that we should try and include links that back up and explain our allegations when possible.Believe me the fact that Obama wanted to see all the news relating to the Third Amendment days after it was enacted tell us that he has great concerns regarding the publics perception of this brazen heist. Blowing the lid off of our government’s lawless scheme is our ultimate goal. Keep the Faith!