The Last Two Years
The Obama/Biden ticket’s entire campaign theme is based on “the last eight years.” Maybe we should really look at “the last two years,” or the time period when both the House and the Senate were run by Democrats.
- Unemployment stood at 4.4%.
- Real GDP growth over the previous four years (under a Republican President, House and Senate) averaged 3% per year.
- A gallon of regular gasoline cost $2.30.
- The S&P 500 stock index stood at 1418, or 84% above its post-911 low and more than 7% higher than when Bush took office.
- Every year of Bush’s Presidency, real (inflation-adjusted) disposable income per person went up. By the end of 2006, the average person was making 9% more in real terms than before Bush became President .
These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.
The Bush administration is rightly pushing for the Treasury Department to regulate the two giants, along with the network of federal home loan banks. Freddie Mac and Fannie Mae provide financing to lenders by creating a secondary market for mortgages. All told, these two institutions’ debt portfolio exceeds more than $1.5 trillion. Their current regulator is ill equipped to keep tabs on Freddie’s and Fannie’s sophisticated hedging strategies and the other financial moves they use to manage their huge investments.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac… 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.