Mary Kissel: Rep.Jeb Hensarling’s (R-Texas District 5) Housing Lesson…see note please
http://www.wsj.com/articles/political-diary-hensarlings-housing-history-lesson-1422386002
Jeb Hensarling who ran unopposed is one of the smartest and sharpest conservative congressmen today….and just for the record he gets a rating of -3 from the Arab American Institute…….rsk
The Republican Party made a mistake when it let the political left blame the 2008 housing crash on big banks, free-market competition and “deregulation.” House Financial Services Chairman Jeb Hensarling is doing his best to correct the historical record, and if his GOP colleagues want to push serious financial market reform, they would be smart to support him.
Here’s a sample of the Texas congressman’s straight talk, from a Tuesday committee meeting: “Contrary to the fable told by the left, the root cause of the financial crisis was not deregulation but dumb regulation. Regulations and statutes that either incented or mandated financial institutions to loan money to people to buy homes they ultimately could not afford to keep. Exhibit one, Fannie and Freddie’s affordable housing goals. Seventy percent of all troubled mortgages were backstopped by Fannie, Freddie and other federal agencies.”
Mr. Hensarling has his facts straight—unlike the Elizabeth Warrens of the world—but no one in the Republican leadership has listened much in recent years. After the Obama administration proposed to wind down Fannie and Freddie in 2011, Mr. Hensarling fashioned a bill to do so. It was never put up for a floor vote thanks to lackluster support from GOP higher-ups. Then Senate Republicans pushed a bill, in the guise of reform, that would have entrenched government in the mortgage guarantee business.
Now the Obama administration has abandoned any pretense of reform by lowering credit standards for government-backed mortgages and vowing to restart two taxpayer-backed housing slush funds. Fannie and Freddie’s boss, Mel Watt, who runs the Federal Housing Finance Agency, admitted to Mr. Hensarling’s committee Tuesday that “serious delinquencies have declined but remain historically high compared to pre-crisis levels, and counterparty exposure remains a concern.” In other words, Fan and Fred could rise to kill again.
The sad irony of the 2008 housing crash is that it most hurt the lower-income, largely minority populations that Democrats say they want to help. If Republicans want to prevent a repeat of that catastrophe, they have to start by educating the public about government’s key role in the financial crisis. Then maybe voters won’t balk when the GOP proposes a better solution—namely, more free-market competition and less politically motivated lending. Bravo to Mr. Hensarling for pushing that conversation.
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