Gingrich Campaign responds to Freddie Mac story

Newt’s campaign responded to this quickly, basically saying that he was arguing for improved regulation and not trying to stop reforms. I don’t buy that completely and neither does Verum Serum. While he did mention needing improved regulations, that wasn’t his main argument.

They go on to say that the housing collapse caused him to look at it with a “fresh set of eyes”. Yeah, no kidding. That still, if true and I’m skeptical, doesn’t excuse him selling out for the purpose of “stopping reforms” to Freddie. Many other Republicans knew that the housing collapse was coming which is why they wanted to reform it. If he’s so smart, he should have been on their side of this and not trying to convince them to stop reforms.

WSJ – The “Policy Talk” interview was featured on Freddie Mac’s website for several months in 2007 at a time the company was struggling to address mounting problems in the mortgage market. The interview is accessible on an archived version of Freddie Mac’s website.

At the time, critics were complaining that Freddie Mac and Fannie Mae benefited from an unfair competitive advantage because of the perception that they had an implicit government guarantee as government-sponsored enterprises (GSEs). That allowed the mortgage-finance companies to pay lower interest rates on borrowed funds than non-GSE competitors.

In the interview, Mr. Gingrich said that “while we need to improve the regulation of the GSEs, I would be very cautious about fundamentally changing their role or the model itself.”

Pressed in the interview about how that was not “a point of view one normally associates with conservatives,” Mr. Gingrich replied that there are times “when you need government to help spur private enterprise and economic development.” He cited electricity and telephone network expansion as similarly effective private-public purposes.

“It’s not a point of view libertarians would embrace, but I am more in the Alexander Hamilton-Teddy Roosevelt tradition of conservatism,” he said.

A spokesman for Mr. Gingrich, Joe DeSantis, said the interview showed Mr. Gingrich arguing for improved regulation of Freddie Mac and its larger cousin, Fannie Mae. He said the interview “directly contradicts the erroneous reports” that Mr. Gingrich was trying to stop reforms to Fannie and Freddie.

Mr. DeSantis said that Mr. Gingrich now advocates a more aggressive overhaul of Fannie and Freddie. “The total collapse of the global financial system has a tendency to make one look at a situation with a fresh set of eyes,” he said.

Freddie and Fannie are deeply unpopular with some conservatives and tea-party supporters. Mr. Gingrich has joined fellow Republicans in singling them out as causes of the financial crisis. He has said that lobbyists and members of Congress are also to blame.

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