Categories
insider corruption national politics & policies

A Newt Public-​Private Partnership

For nine years, from 1999 until 2008, Newt Gingrich worked helping Freddie Mac, the government – created, bubble-​creating housing corporation. Newt’s outfit, The Gingrich Group, knocked down more than $1.6 million dollars in consulting fees during that time.

Newt says he warned the government-​sponsored giant that the bubble it was busy blowing up would burst badly.

For all those years? He was either mind-​numbingly repetitive or must have really drawn out his words. He is from Georgia, but still.

Folks at Freddie tell a different story. They say former Speaker Gingrich helped “build bridges” to Republicans on Capitol Hill, hoping to prevent congressional efforts to rein in the mortgage giant. Those efforts proved successful — there was no powering down of the Frankenstein mortgage monster. The Gingrich Group’s contract wasn’t canceled until the 2008 crash, when the U.S. Treasury took control of Freddie Mac and his sister housing financier, Fannie Mae.

In last weekend’s GOP presidential debate, Congressman Ron Paul argued that Newt Gingrich’s position with Freddie Mac is “something people ought to know about.”

“While he was earning a lot of money from Freddie Mac,” explained Rep. Paul, “I was fighting, over a decade, to try to explain to people where the housing bubble was coming from.”

Newt responded that, like Dr. Paul, he wanted to audit the Fed. As for his Freddie role, “I offered strategic advice,” claimed Newt, adding, “I was in the private sector.”

Laughter erupted throughout the hall. Even Mr. Gingrich couldn’t keep a straight face.

This is Common Sense. I’m Paul Jacob.

Categories
government transparency responsibility

What Would Confucius Say?

House Resolution 784, proposed to honor the twenty-​five-​hundred-​sixtieth anniversary of the birth of Confucius, received a No vote from Arizona Congressman Jeff Flake.

Why?

Honorable Flake say ‘He who spends time passing trivial legislation may find himself out of time to read healthcare bill.’

He has a point, and it’s worth than a fortune-​cookie presentation.

I am pretty sure Master K’ung-tzu, whom we call Confucius, would side with Flake. It is more important actually to do good deeds than honor the ancient wisdom of a foreign culture, or its chief exemplar.

It’s not bad to honor such an ancient one as Master Kung. But if everything else you do rubs against the Confucian grain, what does that say?

Take just one issue. Congress continues to obsess about executive salaries, and in effect has given the current administration the green light to fix salaries.

But as economist Arnold Kling has noticed, this is all a distraction. ‘The substantive issue is the extent to which [recent market] losses were caused by political actions and the extent to which they are concentrated at Freddie Mac and Fannie Mae.… Given the large role of Freddie and Fannie, it makes sense for politicians to create as large a diversion as possible. Hence, the brouhaha over bonuses at bailed-​out banks.’

Very un-​Confucian, such shifting of blame.

This is Common Sense. I’m Paul Jacob.