Free framing/messaging advice for Republicans: don't let Democrats get away with turning this into conventional wisdom...
[I]t is certainly not too soon to look beyond the current crisis to the flaws and fallacies of the anti-regulatory ideology that has held Washington in its grip since the Reagan years and allowed the financial excesses that are now stressing the system to the breaking point.
Every time somebody cries "if only we had regulated!", they need to be asked two questions...
- What regulation would have prevented this economic problem without creating even greater problems?
- When, prior to this crisis, did you propose it?
It is particularly dumb to reflexively blame this problem on Republicans, as Nancy Pelos did, or to reflexively assume Democrats must be better, as Paul Krugman does. Especially when facts like this, from 2003, are readily available...
- "The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago."
- "The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken."
- "[Representative ] Oxley [and] [Senator] Shelby ... announced their intention to draft legislation... [...] ''The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,'' Mr. Oxley said at the hearing." [NOTE: Oxley and Shelby are Republicans]
- "Among the groups denouncing the proposal today were the ... Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing."
- ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''"
- "[Representative Melvin L. Watt, Democrat] 'I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing.""
- "[Fannie Mae and Freddie Mac] are entities that have demonstrated over and over again that they are deeply in need of reform.
- "[T]he report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
- "I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole. I urge my colleagues to support swift action on this GSE reform legislation."
That quote comes from....John McCain. Barack Obama did not sign onto the legislation.