That regulated part being Fannie/Freddie with its supposed congressional oversight.On Capitol Hill, he notes, we had just the opposite. In terms of accountability, Fannie Mae and Freddie Mac were the worst of both worlds. On the one hand, they lacked the congressional oversight that would have come had there been an explicit and acknowledged taxpayer guarantee. On the other hand, the privileged position represented by this implicit guarantee removed the discipline that market competition forces on other private enterprises.
Mr. Baker goes further. He points out that it wasn't the unregulated part of the financial markets that got us here. It was the regulated part. In his own industry, he notes, the lack of a government guarantee means folks do a lot more due diligence before they part with their money.
A recent comment on this blog said that the GOP was in charge when F&F were starting to show signs of trouble. True enough but the past blog posts here show that the Democrats blocked all oversight attempts, effectively killing it in committee. Remember that this is a democracy where the minority party gets a say. And I must add the GOP is a afraid of the racist label, so let the idiotic schemes go along their merry way. Not much leadership in either party. We have the stupid and egalitarian party or the let's not be known as the nasty party of racists.
With the polls the way they are you Democrats may just get the presidency with a congressional supermajority. You can start implementing your grand societal schemes - schemes that you'll find that work about as well as perpetual motion machines. Next up Social Security, then Medicare.
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