We already know that Newt Gingrich took $1.6 million in consulting fees over a decade from Freddie Mac, the mortgage giant that, with its twin Fannie Mae, bought or backed $1 trillion in bad home loans and brought down the economy.
Many have wondered what Gingrich did for all that dough. Most of us figured the money was to keep a top Republican’s mouth shut as Freddie and Fannie promoted all those risky loans and cooked the books to enrich Freddie and Fannie’s executives.
Well, according to Verum Serum, the former Speaker of the House actually did some talking for the two toxic lenders (also called government-sponsored enterprises, or GSEs). On Freddie Mac’s webpage, in April 2007, Gingrich is quoted at length making the case for Freddie and Fannie:
Q: A key element of the entrepreneurial model is using the private sector where possible to save taxpayer dollars and improve efficiency. And you believe the GSE model provides one way to use the private sector.
Gingrich: Certainly there is a lot of debate today about the housing GSEs [Freddie Mac and Fannie Mae], but I think it is telling that there is strong bipartisan support for maintaining the GSE model in housing. There is not much support for the idea of removing the GSE charters from Freddie Mac and Fannie Mae. And I think it’s clear why.
The housing GSEs have made an important contribution to homeownership and the housing finance system. We have a much more liquid and stable housing finance system than we would have without the GSEs. And making homeownership more accessible and affordable is a policy goal I believe conservatives should embrace. Millions of people have entered the middle class through building wealth in their homes, and there is a lot of evidence that homeownership contributes to stable families and communities. These are results I think conservatives should embrace and want to extend as widely as possible. So while we need to improve the regulation of the GSEs, I would be very cautious about fundamentally changing their role or the model itself.
Q: This is not a point of view one normally associates with conservatives.
Gingrich: Well, it’s not a point of view libertarians would embrace. But I am more in the Alexander Hamilton-Teddy Roosevelt tradition of conservatism. I recognize that there are times when you need government to help spur private enterprise and economic development. Look at our own history. The government provided railroad land grants to encourage widespread adoption of what was then the most modern form of transportation to help develop our country. The Homestead Act essentially gave land away to those willing to live on it and develop it. We used what were in effect public-private partnerships to bring telephone service and electricity to every community in our nation.
All of these are examples of government bringing about desired public purposes without creating massive, taxpayer-funded bureaucracies. To me that is a pragmatic and effective conservative approach.
Bipartisan treason. “It’s telling that there is strong bipartisan support for maintaining the GSE model,” Gingrich said. Yes, it’s telling. It tells us that, as Barney Frank and other Democrats took over Freddie Mac and Fannie Mae in the 1990s and early 2000s, they paid off every Republican in a position to stop them from tossing aside sound lending practices and saddling millions of Americans with loans they could never pay back.
Gingrich shouldn’t be running for president. He should be joining Barney Frank in a retirement of silence and shame.