Saturday, October 04, 2008

Frank on Fannie Mae: 'Fundamentally Sound'

The Democrats plan to get even more mileage out of McCain’s statement last week that the fundamentals of our economy are strong.

But making statements like that, especially in stormy economic weather, is what presidents do. It's not lying, (especially if it's true). It's leadership. You just don't want American presidents telling the world that the fundamentals of the economy are weak--or certainly not worse than at any time since the Great Depression. (Okay, Carter would do it). Not unless they mean to invite foreign investors to withdraw trillions of dollars in investments here. (Okay, Carter would do it).

That would be stupid. That kind of political theatrics is only attempted by ambitious persons who need a crisis to advance their game. (Yeah--okay, Carter would do it).

Nonetheless, the Democrats intend to beat McCain’s statement into the ground. Which made it all the more interesting that what led up to the Bill O’Reilly- Barney Frank donnybrook the other night, was Frank's remark in July 2008 that “I think this is a case that Fannie and Freddie are fundamentally sound. They are not in danger of going under.”

Which was not only not true, and Frank must have known better, but also it was something that Frank had a very big hand in being responsible for.

But is anyone jeering at Barney Frank?

UPDATE: A case in point on the differences between leadership when discussing the economy and malpractice by shooting your face off. The Wall Street Journal reports on Harry Reid’s and Chuck Schumer’s recent statements leading directly to market sell-offs in response, (“The Trouble With Harry”):

Just as U.S. credit markets this week were close to the edge of the cliff, threatening capital-starved businesses large and small, Senate Majority Leader Harry Reid stepped in front of reporters and offhandedly announced:

"One of the individuals in the caucus today talked about a major insurance company. A major insurance company -- one with a name that everyone knows that's on the verge of going bankrupt. That's what this is all about." The next day, share prices fell sharply across the insurance industry. . . .

It calls to mind
Senator Chuck Schumer's public suggestion in July that troubled IndyMac Bank "could face collapse." It did, after a deposit run. Senator Schumer said criticizing his action was akin to blaming "the fire on the guy who called 911."

The nation's shareholders would sleep better at night if some Members of Congress enrolled in Arsonists Anonymous.

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