Thursday, March 27, 2008

Garrett & The Credit Crunch

It was bad enough back in September to watch Representative Scott Garrett say that the problem in the sub-prime credit market was a small issue.

Then on Sunday, after a number of postmortems have concluded an emphasis on deregulated derivatives to obtain quarterly profits played a large part in this credit mess we're in, Garrett went on record saying deregulation had nothing to with it. We have to remember, Garrett's always had trouble understanding when economists like Alan Greenspan tell him things, so this is no different.

This Tuesday, Garrett went on record with the AP saying that anti-predatory regulations wouldn't have worked because "innovation in the lending market would have found a way around even an all-encompassing bill." That's right, our Representative believes keeping people from being skrewed over is too daunting a task, so why try.

Finally today, Garrett apparently responded to Treasury Secretary Henry Paulson's remarks yesterday regarding the need to increase regulation for those being loaned taxpayer dollars.

Here are Paulson's sentiments, as reported by the Washington Post:
"This latest episode has highlighted that the world has changed as has the role of other nonbank financial institutions and the interconnectedness among all financial institutions," Paulson said. "These changes require us all to think more broadly about the regulatory and supervisory framework that is consistent with the promotion and maintenance of financial stability," he added.


The secretary said commercial banks' access to the Fed's emergency lending "discount window" has traditionally been accompanied by regulatory oversight and supervision. "Certainly any regular access to the discount window should involve the same type of regulation and supervision," Paulson said.

Protecting taxpayers, there's a novel idea. Considering we've never heard a peep from Garrett about the billions lost due to fraud in Iraq or why he advocated for an earmark for a program after the Army had ended it; I doubt the idea of having accountability for the money lent to JPMorgan and others will cross his mind.

This was Garrett's thought, as posted on The Hill Blog:
It is critical that in our politicians haste to find a solution to our housing market woes that they do not act in a way that could hamper the free market and further dry up credit leading us to only exacerbate the situation.

We have to keep in mind that Garrett doesn't believe anything other than abortion should be regulated, ever. How Garrett can claim to be a champion of the taxpayer out of one side of his mouth; and at the same time be against ensuring the taxpayer's dollar isn't being used to underwrite bad business practices out the other side of his mouth is mind numbing.

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