Skip to comments.Gingrich of Freddie Mac
Posted on 12/17/2011 8:44:22 PM PST by Steelfish
DECEMBER 17, 2011 Gingrich of Freddie Mac The Speaker's defense is hurting him as much as his $1.6 million payday.
Newt Gingrich's opponents aren't letting up in their criticism of his lucrative ties to the failed mortgage giant Freddie Mac after he resigned as House Speaker in the late 1990s. More damaging to his Presidential candidacy is that Mr. Gingrich doesn't seem to understand why anyone is offended.
In his first response after news broke that he'd made $300,000 working for Freddie, Mr. Gingrich claimed he had "offered them advice on precisely what they didn't do." As a "historian," he said during a November 9 debate, he had concluded last decade that "this is a bubble," and that Freddie and its sister Fannie Mae should stop making loans to people who have no credit history. He added that now they should be broken up.
A week later Bloomberg reported that Mr. Gingrich had made between $1.6 million and $1.8 million in two separate contracts with Freddie between 1999 and 2008. The former Speaker stuck to his line that "I was approached to offer strategic advice" and had warned the government-sponsored enterprises (GSEs) to stop lending to bad credit risks.
Then on December 2 our colleagues at the Journal reported that as late as April 2007 Mr. Gingrich had defended Fannie and Freddie as examples of conservative governance. "While we need to improve the regulation of the GSEs, I would be very cautious about fundamentally changing their role or the model itself," Mr. Gingrich said in an interview at the time.
Mr. Gingrich added in that interview that there are times "when you need government to help spur private enterprise and economic development."
(Excerpt) Read more at online.wsj.com ...
I would argue that they were distortive. People bought bigger and bigger homes, bigger than they needed, because that was the one tax deduction available to them. The money invested unwisely there could have been invested elsewhere, with more efficiency. (A hundred years ago people didnt leverage 3-5 times their annual salary to buy a house)
. And the FM's worked well for years also, until the Democrats appointed to run them stole every penny they could.
But that was inevitable, wasn't it? You put politicians in control of money to buy votes with, and what do you get? It wont be run like a money making business, thats for sure. No surprises there.
I don't really care how much he was paid. Somebody thought he was worth whatever they paid him and they did. I don't care how much money the Angels pay Albert Pujois. They think he's worth it. I can't imagine that he is, but I ain't in the baseball biz and they are.
If Gingrich was paid less per hour than you make, would that make you happy? Do you think he should redistribute his wealth by giving some of it to you?
If not, then why in the hell do you care how much money he made? How would your life be improved if he made less?
Do you? Do you think they were paying him millions of dollars so he could teach them history or give them advice they didnt want to hear? Or is it at all possible that they were leveraging his contacts?
If they wanted an academic consultant they could have hired some nobody expert and paid him one tenth what they paid the ex-speaker, who got them into doors with people they wouldnt have gotten into otherwise.
The legal definition of lobbying includes:
“including preparation or planning activities, research and other background work that is intended, at the time of its preparation, for use in contacts and coordination with the lobbying activities of others”
Walks like a duck, quacks like a duck...
The Democrats would unload on him on this issue.
When I heard it in the debate, I searched the web.
“I want to know the specifics of Gingrichs consulting work with Freddie Mac. I want to know how much he billed per hour. After all, he was paid with Tax Payer dollars.”
That would have been a good trick since Freddie Mac was a private, stockholder owned company during the time that Gingrich was paid by them. How exactly were those “Tax Payer dollars”?
So he wasn’t lobbying for Freddie and Fannie he was teaching them how to lobby for themselves.
We’re all forgetting who made the banks - SUED THEM - give these loans...the media hopes we won’t remember - and guess what?
How about we get to the root of it - of what F&F said to Newt about the new approach ‘ This is what the GOVERNMENT wants us to do. WHY did the GOVERNMENT tell them to do it? Who was involved? see the last link if you don’t look at anything else.
Let’s see how many will recognize the truth here and how many will keep using the media/Establishment narrative to help clear the way for mittens. Tell the WHOLE story or sthu.
Here we go again. ;o)
Please, at least lets us Freepers know and tell the truth...
Newt was hired as a consultant when the bank were looking for a way to help people learn how to work, to save and to buy a house - then the process took a turn when the banks got sued and made to adopt the sub-prime loans - giving, gifting not low income but even no income, no credit loans.
Newts advice - thats insane...
Now, dig back to just WHO it was that made the banks give those loans? Was it Newt? hardly. Was it the banks? They didnt want to do it.
Does Acorn and CRA strike a bell? The banks were taken to court on the charge that they were Redlining (denying poor people loans because of their ethnic heritage)...
Starting to get the drift?
And who was their lawyer that took it to court? Can you handle the truth?
Ok just to set things straight. Palin was a money grubbing opportunist, but Newt is ?????
” but in the context of what Newtie said I can’t imagine how Freddie Mac and Fannie Mae would apply “
Actually Fannie is a good example of government spurring the private sector. Before 1934 you couldn’t get a twenty or thirty year mortgage. Mortgages typically ran for three years, at which point you had to roll the principal over into a new mortgage.
This became a big problem during the Depression when a full one third of American banks failed. It became very hard to find a lender to roll over your mortgage. Homeowners who were employed and who had never missed a payment lost their homes simply because they couldn’t renew their mortgage.
Fannie Mae was formed to create a secondary market in mortgage paper. Fannie would buy mortgages from banks and S&Ls, freeing up the banks’ capital so that they could make new mortgages. Fannie packaged bundles of mortgages and sold them to investors looking for a predictable cash flow, principally insurance companies and retirement accounts. Investors of this sort were looking for long term cash flow and as a result were willing to fund long term mortgages.
Prior to 1934 there wasn’t a secondary market in mortgage paper. The formation of Fannie Mae created one and it is now a huge industry. It worked without much of a hitch for decades when Fannie and Freddie dealt in stodgy conforming loan paper.
and also, why isn’t the press covering where the whole sub prime started in the first place - that the banks were SUED and forced to do it -
Why? because, the law suit said they were: “denying poor people loans because of their ethnic heritage...”
Getting a hint?
Who was the golden boy lawyer
Excerpt: (and scroll down for the name in red - of a young Chicago lawyer...)
New York Post Article HERE :
THE seeds of todays financial meltdown lie in the Community Reinvestment Act a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.”
And Frank and Dodd pushed it through
but they all skate and we’ll all sit back and let them make Newt the scapegoat.
“There are other examples of beneficial government actually spurring private enterprise and economic development”
Radio is one that most people wouldn’t think of. The Navy put together a consortium of companies to form the Radio Corporation of America. The radio industry was essentially created by the Navy working with GE, Westinghouse, AT&T and a few other firms.
Marlowe you act like our crooks are somehow more honest than their crooks.
Thirty years or so ago ever county comissioner in Oklahoma with the exception of one, Henry Campbell was convicted or plead guilty to fraud.
Some how people began to notice that comissioner’s earning $400.00 a month were able to buy farms and cattle and otherwise improve their bank holdings. All it took was for an honest State Attorney to take a stand.
Harry Reed has amassed a fortune, do you think it was because people paid to hear him give advice?
tell you what, since you’re so concerned about all the details concerning F&F - why don’t you ask around for some answers to this - which is what started the whole sub prime mess -
which is why, when the banks finally outlined the new wrinkle in the plan - “this is what the Government want us to do” - which Newt told them was insane - where did the whole scheme come from in the first place?
Right, he’s planning the lobbying campaign. The law, as I quoted in an earlier post, clearly labels planning a lobbying campaign as lobbying.
I really could not believe it when I looked at his “health transformation” website for his “consulting” firm.
For the last 10 years he’s been tiptoeing, IMHO, around the law, not being registered as a lobbyist but running all over DC collecting fees for “consulting”.
If the FEC gets involved, IMHO, he may well be toast.
Do you know what sort of consulting Newt did?
Following up on myself, I got a partial answer, except I'm not sure what a "private-sector political consultant" does? Smells like lobbyist.
I have read that Freddie contracted with one of Gingrich's companies for 200 grand a year, and that that was a standard fee for that group.
Also, like many others in demand, Gingrich commanded 60 grand for a speech at an event.
The consulting had to be consulting because Gingrich has been out of power for over a dozen years. Think about that: he has ZERO power. He also has a GOP that is hostile to him, and those who fought against him (including Boehner) are the ones in power.
So, he wasn't "influence peddling" because he had no influence to peddle.
He had knowledge, experience, insight and ideas to sell. That's called consulting
Mitt Romney notwithstanding, I for one, would like to see the written reports, consults, documents or papers Mr. Gingrich provided FANNIE/FREDDIE for the large sums he received.
Quite frankly, I’m not interested in Newt’s abridged spin he verbally relates. Been there done that. In one account, he ‘spun’ that he “loved his country so much and worked so hard” was the reason he cheated on his former wife with his now-wife, Calista. Arrogance.
I have no interest in furthering Mitt Romney’s tenuous hold on the nomination, certainly. However, I am not willing to swallow a crock of Newt’s self-serving ‘me-say’on his word alone. You can’t trust his word.
Hmmmm - someone that actually studies the cause/effects of what was tried, what the stated goals were, and how it worked out, and you don’t see how he might be able to advise a government agency that sways with the political forces....