Friday, August 5, 2016

Maybe it’s my deodorant??

Last week Mike Stegman, ex-White House official, wrote a self-serving piece for the Bipartisan Policy Commission, claiming there was great support for the old Senate "GSE reform"  legislation Johnson-Crapo (which started out as Corker-Warner) and that bill should be a guide for future legislation to do away with Fannie Mae and Freddie Mac.

When first I read it, I thought Mike must be drinking some of that Donald Trump Kool-aid, you know the kind which makes you swear you see things that nobody else sees.

In Mike’s case, it’s broad support for a bill which had no broad support. In the Donald’s case, he swears he saw New Jersey Muslims applauding the twin towers collapse and, more recently, a video of a plane flying $400 million in cash to Iran.

Mike saw some wounded duck legislation, but insists it was a soaring eagle.

I took advantage of the BPC comment section, following Mike’s tome, and sent the following:

Several things here, but I will limit my comments to Mike Stegman's massive spinning and false theme
There was no bipartisan consensus on Johnson-Crapo (or Corker-Warner, its first iteration) and proof is that it barely passed out of the Senate Banking Committee and never advanced to the floor. That was with the Senate controlled by Republicans, the House in the hands of even more anti-GSE elements, and a White House waiting to sign anything which killed the GSEs.
When you can't pass a bill with that support, something is wrong with your plan.
In this case, Stegman and his posse had no provisions in their bill for mandated low income lending (as per what F&F do), handed the primary and secondary mortgage markets to the nation's big banks (hardly worthy stewards), and had an indefinite transition period--as they scuttled the GSEs--which made nobody confident of success...and that only was the beginning.

CBO's 10 years profit/loss projections are notoriously inaccurate (since few people can deftly project economic activity 10 years into the future) and, institutionally, it has long opposed F&F, no matter who ran it.

Stick to your day job, Mike, and—as you’ve learned--bring your lunch and lots of coffee, because killing the GSEs will take a while, mainly because most of the alternatives you’re hawking are far worse.

Feeling smugly satisfied, I shared my work with a few colleagues, but in checking back noticed that BPC didn’t post what I wrote. I tried posting again and got nowhere. So—with difficulty--I slipped into the not seen often “nice Bill Maloni” and sent another comment, hoping someone at BPC would miss the obvious sarcasm and the author’s name.

Mike nailed it; I had forgotten how popular the Johnson-Crapo bill was with so many people, and nearly became law. If only it had some mandatory low income lending in it and didn't give so much authority to the nation's big banks.

I hope he and his allies will work to make this proposal law next year and overcome the marginal opposition from the community groups and small lenders.

Drat, I failed, they didn’t use it, either, ergo today’s blog title.

Apparently, the BPC only prints commentary that agrees with their many debate/discussion participants (Oh, the BPC’s initial Commission report gave birth to Corker-Warner cum Johnson-Crapo). 

Those two bills, virtually identical, were named for Senators Bob Corker (R-Tenn.) and Mark Warner (D-Va.) and later Tom Johnson (D-SD.) and Mike Crapo (R-Idaho).

I still think my remarks are closer to the truth than Stegman’s.

Worth noting: Before he retired, I was a big Tim Johnson fan/supporter. I believe he was a thoughtful and progressive Senator.
More than the subject proposal, which once carried his name, I hope his Senate colleagues--and whatever President and administration crew comes to town after November’s elections--and the new Senators and MoCs all remember what Tim Johnson told FHFA Director Mel Watt during a Senate hearing.

“Everyone agrees that conservatorship cannot continue forever, so I hope my colleagues will keep working towards a more certain future for the housing market, If Congress cannot agree on a smooth, more certain path forward, I urge you, Director Watt, to engage the Treasury Department in talks to end the conservatorship.”

Maloni, 8-5-2016


G. Buckman said...

Glad to see the "grumpy and or nice" Bill Maloni back at it, as all is now right in the blogosphere.

Looks like the BPC is doing what is usually does to control the narrative, controlling the comments that it allows to be posted.

I commend your efforts nonetheless.

Keep up the good work.

Unknown said...

Nice to see the truth. Thanks for all you do.

Bill Maloni said...

GB--I keep the nice guy hidden, trotting him out for special occasions.


Joseph--Thanks for reading and your support. Things will start to heat up, with the first pro-plaintiffs court decision.

Unknown said...

Thanks, Bill

Note - the "already been a long time and nothing has happened" was very apparent when Tim Johnson made those remarks in December 2014.

Well, the "Jumpstart" on the jalopy which is lets-get-a-better-system=guys that has 30-yr-mortgage-affordable-housing-support-easy-cheap-access-nationwide-rich-or-poor.

Build it and they will come.

If they don't build it, maybe the current system will work?!

ryan said...

Bill...if the Internets biggest strength is porn then detecting sarcasm must be its biggest weakness........

Bill Maloni said...

Chris--I find Tim Johnson's advice still valid/prophetic as if he anticipated the problems with trying to replace Fannie and Freddie, with legislative efforts from this current Congress.


Ryan--Someone hipped me to the ";-)"--with the blinking eye as a symbol of sarcasm--which I employ on some of my comments.

I don't know how widely it's accepted as a sign of that quality, but I didn't want to give myself away too easily with the BPC.

Not sure they've accepted any comments to MS' article, yet.

Anonymous said...

Thank you Bill!
Shame on Stegman. He is a paid liar. A professional puppet.

Bill Maloni said...

He certainly isn't my favorite ex-Administration official. I think you accurately described some of his traits.

Anonymous said...

Thanks for your efforts.
We need all your help to counter the false narratives.

Bill Maloni said...

Thanks, but no need. Everytime I see them, I try and correct them or explain why the source has those views.

More and more of our friends/allies are doing that and I hope the GSE understanding curve is sloping upward.

GSE Links, Investors Unite, "the real" Tim Howard, plaintiffs lawyers, Peter Chapman, David Fiderer, Bethany McLean, Gretchen Morgenson, Rep. Mike Capuano, Rob Zimmer, the crowd at the Google GSE site,and others (apologies to anyone I left out) are shining lights in dark corners.

We need more--specially in the Congress--but the number of light bearers has grown

Peter Chao said...

Dear Mr. Maloni,

Hate to plagiarize, but I'm trying to copy/paste your comments in at the Bipartisan Policy Center...just to see what happens ;)

Wonder whether they'll let it fly. So far, no other comments on their hit piece.

Peter Chao said...

Nope, they killed it.

Thanks anyway for your input Bill.

Bill Maloni said...


Feel free to cut and paste my blog or anything else I've written (seven years worth of blogs most with the same themes) that publicly available.

If you tell me how it's going to be used--and I'm comfortable with your intent--I'll give you something original to help. (Although save me from doing treatises!!)

ryan said...

Why bother changing Fannie and Freddie if no one can agree then arnt they fine where they are?

The job seems to be getting done and the profitability can attest to that.

Bill Maloni said...


We agree, but you are being rational and discounting the ideological and commercial "hate" the two are for the conservatives and the big banks.

It's really the only explanation and all the rest of the arguments are empty sound bites. Follow the money is an excellent guide here.

The two just made $4 Billion in the 2016 2Q and the banks and others want that money. The public won't get involved until there is a disaster and mortgage money either spikes incredibly high or isn't available.

Anonymous said...

Hey Bill,

I sent you some ideas from Charlotte
Are you in touch with the other guys?

Do you know if they're going to use these ideas?

Bill Maloni said...

I only know, hand shake, dinner, etc. one of them and probably the one with the thinnest wallet.

I have not heard directly from my one pal or indirectly, from people who deal with the others, talking about your ideas.

I like your website and "transportation" thoughts, but you need an event, i.e. IMO a favorable plaintiffs court decision, before the latter would attract the broad attention it needs/you want from those you want to see it, plus whatever media it draws.

(When/if that happens, I expect that all of the usual GSE sources will start to chatter and shout, too.)

That also means waiting--which might accommodate the one a caveat--for about a month, which also might allow for a favorable call in one of the three most likely venues.

Don't view this as cold water, just my sense of who is willing to put what effort into what ideas when the "GSE oppo wall" is so high. A court decision or two might cause that wall to crack and complementary efforts--like your suggestions--to yield some value.

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