In the Wall Street Journal, former Bush advisor Lawrence Lindsey today criticizes the mortgage bailout bill Bush foolishly signed, noting that if any other country did something similar, “financial markets around the world would dump both the country’s debt and the country’s currency.” Bush once threatened to veto the bill, which was pushed by liberal lawmakers, but changed course and signed the bailout bill after prodding by Treasury Secretary Hank Paulson, who foolishly went along with liberal Congressmen in downplaying the dangers of government-backed mortgage giants Fannie Mae and Freddie Mac in order to appease them.
Lindsey notes that “decades of coziness between politicians and Fannie and Freddie is paying off. Not only were there campaign contributions, but their ‘foundations’ contributed huge sums to think tanks, and many political figures made the transition from government to the GSEs. The list of their connections reads like a combined Washington-New York phone book, and undoubtedly gives the appearance that both Wall Street and politicians close to Fannie and Freddie had key seats at the bargaining table over this bill. The taxpayer was not adequately represented.”
We wrote earlier about how the mortgage bailout law skirted longstanding rules and the Constitution, and how the fraud-ridden mortgage giant Fannie Mae has long used dirty tactics and intimidation to thwart reforms that would take away its special privileges.