Saturday, September 6, 2008

Garrett was Right; The Bailout's On

Update: It's official, we're on the hook for "tens of billions"

As I've mentioned before, as well as Herb Jackson, Representative Scott Garrett has been one of the most consistent critics of the government's backing of Fannie Mae and Freddie Mac. With the news that the government is planning on taking over the GSEs tomorrow, confirmed by Representative Barney Frank, it looks like Garrett will get to say the "I told you so" I'm sure he never wanted to say.

On the other hand, Frank has the problem of having to deal with the fact he stood on the House floor and said the legislation they passed back in July, making this bailout almost inevitable, probably wouldn't cost taxpayers a dime. Now it seems we'll be on the hook for at least $25 billion.

What I find most troubling is this decision is not based on all those reports telling us the companies had plenty of cash, but instead seems to be on all those hedgefund managers who would have lost millions if they couldn't short sell the stocks. Now we've got ourselves the largest bailout in American history.

And the greed goes on...


Anonymous said...

Do you mean hedge fund managers who are some of Garrett's biggest contributors? What a hypocrite. He has served on the Financial Services Committee as well as various subcommittees while the economy (particularly the financial services industry) has sunk, has collected lots of contributions from those industries he oversees, and now he wants to say "I told you so?" Maybe if he was doing his job OVERSEEING Freddie and Fannie we wouldn't be in this mess!

rmfretz said...

He's not saying I told you so, Herb and I have both said he'd have every right to. I think it's pretty safe to say I'm one of Garrett's harshest critics, but on this one he has been arguing they've been too big for a long time.

Granted, he hasn't been effective in his fight, but he has been saying this day would come for a very long time. Barney Frank assuring taxpayers back in July that this probably wouldn't cost anything is the one to point the blame at on this one.

As to the hedgefund managers, well the fact Garrett put the road to permanent AMT relief behind their interests lets you know where that stands.