We don’t claim to be smart enough to know if the bailout bill before the House is the right answer to this nation’s subprime mortgage mess. We can grasp the concept that the government could purchase these illiquid assets and gradually sell them back into the market over time to possibly even generate a profit, or at least recoup a big portion of the $700 billion price tag.
Our discomfort in the proposal is that we are talking about the federal government doing this. Has government ever done anything efficiently? If Warren Buffett was in charge, that’d be a totally different ballgame. The devil, as it’s said, is in the details, which we don’t claim to know.
If anyone is paying attention beyond the screaming headlines about Wall Street greed, Congress is the one who set this all in motion with the ill-conceived Fannie Mae and Freddie Mac. There’s plenty of video of Congressman Barney Frank and Sen. Chris Dodd blasting regulators who brought to light the firm’s cooked books and the mounting problems back in 2004. Fannie Mae and Freddie Mac kicked out big contributions to their friends and guardians in Congress to keep the regulators away.
How intertwined is Washington’s power elite with this? Former Fannie Mae CEO Franklin Raines, who made off with a reported $90 million while running the company into the ground is now one of Barack Obama’s chief economic advisors. Tim Howard, the former chief financial officer of Fannie Mae, who was essentially cooking the books and lying to Congress about the firm’s financial health in 2004, is also now one of Obama’s financial advisors. And then there’s Jim Johnson, who is under investigation for his time as Fannie Mae’s CEO, who is Obama’s senior finance advisor and headed up his vice president search.
These are the guys who wrecked our economy and now we find them either forging the corrective policies, or soon to be in charge of them. Count us unimpressed.
What we can tell you is that Texas is in better shape than most states with oil and gas activity staying strong.
Locally our community banks are not tied up in this national mess. The message that Beeville’s bankers gave in Wednesday’s edition is that our institutions here were not making the shaky kinds of investments that are at the heart of this problem. Community banks are a completely different animal from the Lehman Brothers and Washington Mutuals. Our community banks here still have money to loan despite the national cry of credit drying up.
That doesn’t mean we won’t feel the ripples from Wall Street and Washington, D.C., but we’re in a far better place than many. We should count our blessings and hope for $2.99 a gallon soon.