2004 CSPAN hearing on regulation of Fanny and Freddie

This video goes to show that deregulation isn’t always a good thing, no matter where it comes from. (You could argue that the deregulation of the telecoms in the 80’s was both very good (cheap long distance) and very bad (the reconstitution of the Ma Bell monopoly & the wholesale theft of UNIX, are 2 examples). But if regulating FM&FM was such a good idea then, why does McCain want to deregulate the insurance industry, a considerably more volatile and inherently riskier industry?

The video also shows a wonderful one-sided argument, selectively cut to make one party look good and the other party look bad, without regard to things like “who was in power during that time?” (2004/2005? That was all Republican, all the way, house, senate, and presidency, so Dems weren’t alone in screwing up.) Also, it overtly simplifies an extremely complicated issue by insinuating that this WHOLE thing could have been averted IF the Republicans were allowed to regulate the industry. (I work in the housing industry, and have to keep abreast of all the regulation that comes across. Trust me, the issue is considerably stickier than this, even without taking into consideration the irresponsibility of investing houses which were allowed to double as banks due to the Republican-backed banking system deregulation that occurred, which allowed these “banks” to screw around with people’s money in a way it was never intended to.) The only thing that makes it sound somewhat even is the 2 1/2 second clip at the end of Clinton saying how the Democrats stifled regulatory changes of FM&FM.

Nevertheless, the Democrats who were stifling the calls for more regulation of the housing industry are as much to blame for this mess as anyone else in government, and to believe otherwise is foolish. That said, it’s never been as clean and clear as “one party’s right, the other one’s wrong.” After all, most of this deregulation occurred under a Republican watch, and under Greenspan’s watch, where recommendations he gave were half-ignored, half-implemented by a Republican majority. And even this statement is so overtly simplistic that to take it at face value is to be willfully ignorant.

(And for the record, Ron Paul was warning about Fanny and Freddie as early as 2001/3, during the time Bush was trying to push regulation through. I still wish he had decided to run as a 3rd party candidate. I might disagree with particulars of his plans, but agree with the basic premise of his philosophies and stated plans for the execution thereof. And he would have gotten my vote. Again.)

The point of showing the video here on my blog wasn’t to lay the blame squarely at the feet of one party… it was to counter the bull squeeze from Pelosi, Frank and Reid about how NONE of the blame falls on them.