I posted a link to you that answers this. Of course, if you are willing to take John Sununu’s word for it, which I imagine most Newt supporters are not.
Also, I recall listening carefully to Newt’s answers when this was brought up at the debates and in interviews and it seemed to me that he never denied, and in fact at some points admitted, that he was against the reforms pushed by most conservatives, including the Bush administration, re the GSEs.
Seemed to me it was typical Newt — all about how he had a better idea on how to do Freddie and Fannie that would fulfill their [Liberal] vision better and, therefore, conservatives were wrong to see these organizations as money-sucking relics of FDR’s socialism.
“Of course, if you are willing to take John Sununu’s word for it, which I imagine most Newt supporters are not.”
I have no illusions about Newt and have often warned people that he has a history of betraying his conservative supporters. But he’s a fighter, I’ll give him that.
That said, Sununu’s article in the Boston Globe doesn’t contain one bit of evidence concerning what Newt did for Freddie Mac. Sununu has the same amount of direct information that I have, a wild ass guess. I mean I have my own suspicion that Newt was being paid to influence Republican congressmen, why else would they hire him? But my suspicion isn’t evidence, and neither is Sununu’s.
“he was against the reforms pushed by most conservatives, including the Bush administration, re the GSEs.”
I would never, ever accuse Dubya of being a conservative, even when it has the qualifier “compassionate” appended to it. Dubya is an old fashioned big business Republican, sold to conservatives under a masterful campaign of false advertising.
” all about how he had a better idea on how to do Freddie and Fannie that would fulfill their [Liberal] vision better and, therefore, conservatives were wrong to see these organizations as money-sucking relics of FDR’s socialism.”
Your characterization of F&F sounds a bit like something Glenn Beck would cook up on a bender. A bit too eager to find socialism lurking everywhere.
For one thing Freddie didn’t exist until 1970. Fannie was created in 1936 because you couldn’t get a mortgage for more than three years, at the end of which you had to roll it into a new one. If you couldn’t find a bank able to make a new loan you could lose your house even if you had made every single payment on time.
Fannie provided a service to the banking community that was useful but which no private firm had filled. Fannie would purchase conforming mortgages from banks, providing those banks with liquidity to make new loans. Fannie would then sell bundles of mortgages to large investors who were looking for paper yielding a reliable and consistent return, freeing its own assets to purchase new mortgages.
Fannie also provided a service to home buyers. The rules it set resulted in a standardized mortgage that borrowers rarely defaulted on. The reliable payment stream from these borrowers encouraged lenders to lend long and a 30 year loan was now available. It was a beneficial service to both borrower and lender.
This all worked well in a remarkably boring fashion for many decades. Had only F&F’s dull conforming loans been available the housing cycle would have petered out in 2003. But they weren’t the only loans available, and just when housing should have turned down we had the arrival of exotic loans from Wall Street firms looking for a way to farm the subprime lending market. They succeeded beyond their wildest dreams, but unfortunately they also made a few errors when it came to calculating the risks involved in their exciting new ideas about lending.