The organization I chair, American Family Voices, sponsors Lauren Windsor’s The Undercurrent show on The Young Turks network in part because of reports like this one on the Warner-Corker legislation that purports to “reform” Fannie Mae and Freddie Mac. Windsor does a great job of summarizing and analyzing the issue in her report. Check out her video below:
What was particularly striking to me in this report was Mark Warner’s classic playing of the DC centrism card to promote a bill that will benefit Wall Street bankers a lot but will do serious harm to middle and working class families. It is a classic DC politician ploy: carry the water for a powerful lobby and call it centrism, while warning advocates of low and middle income people to “not let the perfect be the enemy of the good”. What Warner and Corker, in a forum (not unlike their campaign funds) sponsored by the biggest Wall Street banks want to do is rapidly wind down Freddie Mac and Fannie Mae, and replace them with...wait for it...the free market. The big banks would then be free to structure mortgages in whatever way made the most money for them and would be under no obligation to help working class families get homes. Meanwhile the financial backstop that, for all its faults, has allowed most middle and working class families to buy homes at all goes away. Great deal for bankers, terrible deal for working families. But what the hell: at least it it’s centrist! That is what matters to DC elites: that we can call a bill centrist and bi-partisan. If it helps the powers that be at the expense of most people, even better.
What we need instead is a politics that says we aren’t going to worry about labels or what it’s called, we are going to pass laws that actually help most people- that build a strong and prosperous middle class, that help young and poor people climb the ladder into a more financially secure future, that help spread wealth and income to more people than just the top 1%. If you ask people about policy ideas that do those things- such as increasing the minimum wage, making student loans cheaper, expanding Social Security, and creating more jobs in education, manufacturing and road construction- they are in fact centrist, at least in the sense of huge majorities of people supporting them. It is only in DC where a bill to help big banks and make it harder for middle class folks to buy homes could ever get the label of centrist.
Warner’s line about not letting this “opportunity” pass us by because we “made the perfect the enemy of the good” is also a classic DC centrist line. The opportunity he describes is no opportunity except for the biggest banks. It is not only a long, long way from being perfect: it is a country mile away from even being good.
Fannie and Freddie became as corrupted by the financial industry’s mindless bubble-induced profit machine as anyone, and in recent years under Ed DeMarco’s sorry leadership, they contributed a great deal to extending the housing crisis rather than solving it, so yes they need to be reformed. But winding them down entirely and putting nothing but Too Big To Fail banks and the “free market” (the bigger you are, the freer it gets) in their place will only exacerbate our housing problems, not help solve them.