I’m pretty sure we’re supposed to be bothered by this New York Times piece about the White House’s handling of the Freddie Mac/Fannie Mae bailouts and restructuring, but it sure makes me want to give the Obama administration a pat on the back:
When Washington took over the beleaguered mortgage giants Fannie Mae and Freddie Mac during the collapse of the housing market and the financial crisis of 2008, it was with the implicit promise that they would be returned to shareholders after being nursed back to health.
But now, with the unsealing of documents this week that were produced as part of a lawsuit filed against the government, new evidence is coming to light on how intimately the White House was involved in the Treasury’s decision in August 2012 to keep all the companies’ profits for the government. That move effectively maintained Fannie’s and Freddie’s status as wards of the state.
Go, Obama, right? No more of this “socialize the risk, privatize the profits” scam – the taxpayers are getting their cut and the regulators are keeping their hands on. What part of this am I supposed to object to?
Preventing the companies from using their profits to rebuild a strong capital position was an explicit goal of the Obama administration, the newly unsealed materials show. In an email sent the day the profit sweep was announced, Mr. Parrott said diverting Fannie’s and Freddie’s profits would eliminate “the possibility that they ever go (pretend) private again.”
No more (pretend) private sounds exactly how I want the White House officials in charge of the GSEs’ recovery to think.
And yet the NYT business section rumbles about the abusive administration behavior.
Thanks to Jim Parrott for looking out for us. Parrot for Mayor…of wherever he lives!