Fannie Mae and Freddie Mac were under-regulated, and that did contribute to their recent problems. But the lack of proper oversight was not the fault of the Bush Administration or John McCain, regardless of how many times you have been told that it was.
No, the responsibility lies in large part at the feet of Chris Dodd, Barney Frank and their friends in the Democratic caucus. Because they were blinded by their desire, rooted in good intentions, no doubt, but pursued at any cost, to get minorities and poor people into homes regardless of whether or not they could afford them, Democrats cried racism and charged Republicans as being elitist. They refused to allow anything that might slow the flood of unqualified new homeowners.
When Republican Richard Shelby of Alabama, then chairman of the Senate Banking Committee, pushed for comprehensive GSE reform in 2005, Democrat Sen. Chris Dodd of Connecticut successfully threatened a filibuster. Later, after Fannie and Freddie collapsed, Mr. Dodd asked, "Why weren't we doing more?" He then voted for the Bush reforms that he once called "ill-advised."But when things started to fall apart, the tunes changed quickly. Suddenly, it was Bush's watch that this happened on, and John McCain was the great deregulator. Free markets had failed, was the cry, regardless of the fact that everything was set in motion by massive market intervention. Nary a word was whispered by the media about the CRA, for example, or about the threats Congress made towards banks who threatened to only lend to, you know, people who could pay their mortgages.
But Mr. Dodd wasn't the only Democrat to heap abuse on the Bush reforms. Rep. Barney Frank of Massachusetts defended Fannie and Freddie as "fundamentally sound" and labeled the president's proposals as "inane." He later voted for the reforms. Sen. Charles Schumer of New York dismissed Mr. Bush's "safety and soundness concerns" as "a straw man." "If it ain't broke, don't fix it," was the helpful advice of both Sen. Thomas Carper of Delaware and Rep. Maxine Waters of California. Rep. Gregory Meeks of New York berated a Bush official at a hearing, saying, "I am just pissed off" at the administration for raising the issue.
It is nice to read the facts in a newspaper. Too bad there are so few reporters who can be troubled to write them.