FEULNER: A free-market fix

In 1992 the Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains." Los Angeles Times. Andrew Cuomo proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low- to moderate-income borrowers by the year 2001. During the 1st year of the Bush Administration chief economist, N. Gregory Mankiw “Warned that the government's "implicit subsidy" of Fannie Mae and Freddie Mac, combined with loans to unqualified borrowers, was creating a huge risk for the entire financial system”. The New York Times reported that Fannie Mae and Freddie Mac were "under heavy assault by the Republicans," but these entities still had "important political allies" in the Democrats. Political correctness was mandated over sound lending practices and so boys and girls you now have the fruits of that misguided venture in feel good legislation. Doesn’t it make you warm all over that the same people responsible for that debacle are now going to fix the problem?