Monday, October 27, 2008
News from the Swamp: Fannie & Freddie hearings
King of the congressional investigation Henry Waxman (D-CA) has vowed to drag the heads of government-sponsored fiascoes Fannie Mae and Freddie Mac before the House Oversight and Government Reform Committee—he’s just going to wait until after the election to do it. House Republicans have been clamoring for Waxman, chairman of the House Committee on Oversight and Government Reform, to get to the bottom of just how Fannie and Freddie turned into such a colossal mess, but he has been reluctant to engage.
Waxman is stalling because he realizes that an investigation into the failed mortgage giants would seriously damage the Democrats. It was the Democrats who relaxed lending restrictions at both institutions, it was Democrats who for seven years repelled every Republican attempt to avert the coming disaster, and it was the Democrats’ relaxed lending restrictions that led to the collapse of the housing market and the ensuing economic crisis. But Waxman found a way out of this political pickle: simply postpone the Fannie and Freddie hearings until after the election. After all, they don’t want the public to know tidbits such as the fact that Barack Obama was the second largest recipient of political money from Fannie Mae, and that a number of sitting Demo representatives and senators were complicit in creating the financial crisis they now blame on the Republicans. Still, it is unlikely that inconvenient truths would be discovered by a Waxman hearing in any event.