« Previous | Home | Next »

He Was Against Fannie Mae Before He Was For It
It's a rare and beautiful thing -- a politician who does the unpopular thing because he believes it's the right thing to do. The guy is Wisconsin Republican Rep. Paul Ryan -- who, per a WSJ op-ed, is not one of the many Republicans who, for years, aided and abetted Fannie and Freddie, then this week ran for polical cover. Ryan was different:

As early as 2000 he was warning in House hearings that Fan and Fred were rushing into subprime loans and mortgage-backed securities, growing and concentrating their risk, and putting taxpayers on the hook. He's so vociferously called for more supervision that he was once stalked by a Fannie Mae lobbyist.

In 2002 he co-sponsored legislation that would have put these beasts under SEC accounting standards. Fan and Fred, and their congressional enablers, killed it in committee. In 2005 he signed on to a bill that would have subjected the giants to modest reform. The Fan-Fred alliance speared it in the Senate.

In 2007, Mr. Ryan opposed a proposal by Texas Republican Randy Neugebauer to gut systemic risk protections for the duo. It passed 383 to 36, with 162 Republicans voting for the companies. Many were the same members who this week thought it too politically risky to stabilize a market rocked by the very Fan-Fred privileges they granted.

The congressman was no fan of Mr. Paulson's plan, and initially rallied conservatives around a rival approach. When it became clear that the administration's approach was the only thing going, he spearheaded negotiations to rid it of its worst liberal elements and to include more taxpayer protections.

As credit spreads widened, he said he also realized this was a "Herbert Hoover moment, where he sat by and let a Wall Street crash turn into a Great Depression . . . There are times when free-markets stop and rational thinking goes out the window. It then isn't enough to be a laissez-faire conservative and let Rome burn . . . This bill is not perfect, but doing nothing is far worse than passing this bill."

Compare this to Mr. Ryan's GOP colleagues in Wisconsin. Jim Sensenbrenner and Tom Petri were among those 162 Republicans that let Fan and Fred bust the bank. Yet when this week's day of reckoning came, Mr. Petri complained it was a "half-baked plan," while Mr. Sensenbrenner declared he wouldn't "subsidize Wall Street." Oh, for this righteousness during the half-baked Fan-Fred subsidy days. And this from two guys in safe seats.

This has left Mr. Ryan alone to defend his position back home. It hasn't helped that his colleagues are spinning this as bravery, crowing that it was they who listened to constituents and they who acted on free-market principles. Never mind that these principles were nowhere in evidence back when it mattered. And never mind that should America crash, it will be the free market offered up as sacrifice to the regulatory mob.

Here's the WSJ's Brian Carney on Barney Frank and a few of the other perps in the House, and how so many ignored Greenspan because he wasn't telling them what they wanted to hear:

I wouldn't hire this guy (Frank) to manage a dry cleaner.

Here's the WSJ's Henninger on "moral hazard," reducing risk to ridiculous levels so people take crazy financial chances:

And here's what I think Biden was talking about when he spoke of forgiving some of people's mortgage debts, Steve Moore on the financial rescue package and what would mean to smash the sanctity of contracts in our society:

*

Comments