When it comes to Congress, truth is not only stranger than fiction, it appears to be fiction. I was on Capitol Hill at the invitation of the Aspen Institute, speaking to congressional staffers about the future of saving and investing in America. So I decided to attend several congressional hearings related to financial matters.
When it comes to congressional hearings, you have to be there. Watching C-Span can't replace the experience of personally seeing the activity going on all around the room. Representatives come and go, having made their point, with few staying for the entire proceedings. It's show time.
Accusing Fannie and Freddie
Taking the heat in the front row of this particular hearing were the deposed heads of Fannie Mae (FNM) and Freddie Mac (FRE). Squaring off against them were angry congressmen and women, demanding answers about how these smart men could have made so many bad mortgage loans.
It was like the Mad Hatter's tea party from "Alice in Wonderland," with everyone talking in riddles. The very same representatives that had demanded "affordable housing" and "community reinvestment" were now angrily asking why all those subprime loans had gone bad.
Henry Waxman, a Democrat from California, who had no complaints when Californians were receiving easy loans to purchase homes that were ever-rising in price, now complained: "Your actions could cost taxpayers hundreds of billions of dollars."
Then, when former Fannie Mae head Franklin Raines was asked what he regretted most, he replied: "I wished we had a regulatory bill enacted earlier." Former Freddie Mac CEO Richard Syron agreed, saying he "wished I'd been more effective in working towards stronger regulation."
