May 12, 2010

Tea Party Santelli redux

House Republican Leader John Boehner has an excellent post on, about the latest Rick Santelli outburst. Rick Santelli, you might remember last year was the inspiration, or at least the spark for the Tea Party movement. On CNBC, Santelli unloaded Democrat Rep. Paul Kanjorski. It was a simple, irrefutable argument.

Boehner's assessment brings up a number of good points;

Republicans have been pressing for an end to bailouts that would get the government out of the mortgage business once and for all. But Democrats are not only unwilling to reform Fannie and Freddie, they are doubling down on the failed government mortgage companies – burning through hundreds of billions of taxpayer dollars in the process. As the Washington Post noted in a report today: “Under the terms of the government's 2008 emergency takeover of Fannie and Freddie, the Treasury must pump money into either firm whenever its worth, as measured by assets minus liabilities, goes into the red. Late last year, the Obama administration pledged unlimited backing.”

For years, Republicans raised red flags about Fannie and Freddie’s financial condition and proposed responsible reforms only to be thwarted by Democrats who have deep political ties to the worst offenders. These same powerful Democrats are now pushing for a financial reform bill that doesn’t even address the need to fix these government mortgage companies. As the Wall Street Journal wrote last week, “reforming the financial system without fixing Fannie and Freddie is like declaring a war on terror and ignoring al Qaeda.”
1) Fannie and Freddie REALLY need fixing
2) Democrats are stalling on fixing them
3) Republicans HAVE tried to get them fixed but have been blocked

The one issue I have with Boehner's comments is semantic. Democrats are interested but the type of supposedly good reform they are interested in is window dressing and meanwhile doubling down on the current structure by giving Fannie and Freddie unlimited backing is in a sense reform too. Really bad reform, but reform nonetheless.

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