Posted on 09/08/2008 2:22:19 PM PDT by Rennes Templar
Alaska Gov. Sarah Palin stumbled this weekend when she commented on the federal takeover of mortgage giants Fannie Mae and Freddie Mac. The Huffington Post "helpfully" pointed out her mistake to anyone who missed it the first time around.
Speaking before voters in Colorado Springs, the Republican vice presidential nominee claimed that lending giants Fannie Mae and Freddie Mac had "gotten too big and too expensive to the taxpayers." The companies, as McClatchy reported, "aren't taxpayer funded but operate as private companies.
The takeover may result in a taxpayer bailout during reorganization."
Economists and analysts pounced on the misstatement, saying it demonstrated a lack of understanding about one of the key economic issues likely to face the next administration.
"You would like to think that someone who is going to be vice president and conceivable president would know what Fannie and Freddie do," said Dean Baker, co-director of the Center for Economic and Policy Research. "These are huge institutions and they are absolutely central to our country's mortgage debt. To not have a clue what they do doesn't speak well for her, I'd say."
- snip-
Palin just got a bit ahead of the facts. Now that the federal government has taken over the companies, taxpayers will likely be on the hook now for maybe hundreds of billions of dollars. Perhanps she was just looking ahead.
(Excerpt) Read more at swamppolitics.com ...
I do not think I indicated that I wanted to throw the Palin overboard because she did not know that the “Pledge of Allegiance” was written around 1890 as opposed to prior to 1776. However, I did say that I was disappointed in her misunderstanding of such a vital part of our American History and cultural fabric.
It was advertised since last Thursday that the Feds (taxpayers) were going to bail them out.
She didn't error on this issue...Even back it 2003, these two government-backed behemoths were referred to as costly to the taxpayer:
http://michellemalkin.com/2006/12/19/crackdown-on-fannie-mae-corruptocrats/
Freddie Mac and Fannie Mae each receive $2.25 billion lines of credit with the U.S. Treasury. These special pipelines give the institutions an implied federal guarantee available to no other private sector competitors in the mortgage market. That protection makes them immune to the costs normally associated with riskier and riskier behavior. Moreover, Fannie Mae and Freddie Mac are not required to pay state and local income taxes. In addition, the standard for how much money the government requires them to keep on hand in case homebuyers default on their mortgages is lower for Freddie Mac and Fannie Mae than for fully private banks and thrifts. The two corporations receive an estimated $10 billion a year in hidden taxpayer subsidies.
Palin was right, AGAIN, Obama campaign (and you were wrong AGAIN)!
MM is correct, this is no gaffe. They are too big, they should never have allowed just two institutions to carry that much of the nations debt.
They are too expensive. They are putting a lot of other financial institutions at risk and affecting lending in worldwide markets. They have to be stabilized (expensive)
NO GAFFE. Sheesh....
Didn’t we pour some money into them back during Clinton?
Jamie Gorelick was involved.
Sarah 'got it wrong' as a matter of historical fact, but with the government bailout it is the taxpayer that is on the hook going forward -- and that's really all that matters for the next administration.
FIGHT BACK AND SEND AN EMAIL TO FRANK AND HIS BOSS AT THE WASH DC OFFICE ABOUT THIS HUFF POST SPIN
FRANK - FJAMES@TRIBUNE.COM
BOSS - NDENDAVID@TRIBUNE.COM
Taxpayers have always been on the hook for them, this just makes it temporarily explicit until it's cleaned up. The "independent" management was fooling around with sub-prime paper outside their purview to pad their paychecks.
Sarah is correct to say that they had got too big for their britches and were putting the taxpayer at risk. I agree she could have said it more artfully. I expect she'll get a chance to illuminate her thinking on this at the debates.
-ccm
Don't forget about Jamie Gorelick and Franklin Raines.
Agreed.
But the easy credit-no money down” through reckless legislation” by the dems was absolutely DEMANDED so that all diverse groups(whether they could actually afford a home or not) could move into one and then have the taxpayers bail them out. Maybe I’m a little paranoid, but I have no doubt in my mind that this is what the socialist dems had in mind all along.
BTW, what’d The Messiah have to say about the bailout?
Unscripted, that is?
Anything? Hellooooo, is anyone home at Chez Hussein?
Once again, Sarah has exposed the left’s ignorance. For years, economists have stated Fannie and Freddie were taxpayer-backed. Alan Greenspan and Henry Paulson have publicly stressed the government’s role in making sure Fannie and Freddie were funded.
it was not the no money down. they redid laws that essentially allowed INFLATED valuation to essentially BE no money down.
The fact these heavily regulated entities were failing IS an expense to the US ecconomy.
This is why the fed moves in on banks. The are in danger of failing.
Oh, just wait. Ford, GM, and Chrysler are about to become “quasi” public/government companies.
To the tune of $25 billion. Their lobbyists snuck a clause in the energy bill authorizing Congress to approve this for “energy” improvements so they can meet the new MPG standards.
Now, they are readying to go to Congress for that money.
Huffington has made it clear she is a left wing hateful lunatic. She was on a media panel at the start of the RNC convention, the venom she spewed was insane.
Huffinton is in the algore kool aid kook camp of “no debate allowed” on global warming.
The woman is insane with envy.
This is nothing of what is going to come from her.
I believe that honest accounting by our federal government would have shown growing contingent liabilities with respect to the GSEs.
Not even for a Public Allies community organizer?
I think I once heard a certain infamous Chicago preacher saying something about "chickens coming home to roost".
And...in this liberal GSE mortgage "company" boondoggle, the chickens have certainly come home to roost for the taxpayer!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.