Thursday, October 09, 2008

Turns out, Oliver had indeed heard of "Fannie Mae" and "Freddie Mac"

During my debate liveblog, I wrote:

9:12 Oliver, an african-american guy, has a question. I find it weird that "most of the people" he knows have had "a difficult time" in this economic crisis. Didn't the crisis start like two weeks ago?
9:13 McCain thinks you might not have heard of Fannie Mae and Freddie Mac. Yep, he's going for the dumb guy vote. Either that or he's talking to Oliver. Probably not the time to be talking down to black people, Senator.

Turns out that Oliver Clark, the aforementioned Oliver, is a little pissed at McCain's response.

He wrote on his Facebook page:

How did I feel about Sen. McCain stating “You probably never heard of Fannie Mae or Freddie Mac before this.”

Well Senator, I actually did. I like to think of myself as a fairly intelligent person. I have a bachelor degree in Political Science from Tennessee State, so I try to keep myself up to date with current affairs. I have a Master degree in Legal Studies from Southern Illinois University, a few years in law school, and I am currently pursuing a Master in Public Administration from the University of Memphis. In defense of the Senator from Arizona I would say he is an older guy, and may have made an underestimation of my age. Honest mistake. However, it could be because I am a young African-American male. Whatever the case may be it was somewhat condescending regardless of my age to make an assumption regarding whether I was knowledgeable about Fannie Mae and Freddie Mac.

In all fairness, I am still not sure that McCain was specifically referring to Oliver. He might well have been saying that most Americans haven't heard of Fannie Mae or Freddie Mac, which still sounds snotty and wrong.

But he certainly answered in the sort of overly-sweet tone of voice that lots of people use when talking to, well, old people like McCain.

Hat tip to Wonkette


PG said...

Yeah, but talking that way to young people won't kill them.

Oliver also may have known, as McCain apparently doesn't, that Fannie and Freddie are giants of the secondary mortgage market, i.e. not the part that actually makes risky loans.

TheCSO said...

Yes, but they're so influential that the underwriting criteria they put out there as acceptable for purchase by them determine how conforming (traditional A paper) loans are made. This is why traditional conforming 30-year fixed full-doc mortgages are still working just fine, even in a financial meltdown.. the criteria are GOOD, the risk is truly low, and there's still trust in those instruments. We've gotten so used to lax lending standards that requiring someone to, gasp, put up 20% down, have a decent credit score, and actually prove that they make what they claim they do is seen as "oh no people can't get loans!"

When Fannie/Freddie started buying "alt-A" paper, they effectively endorsed those far more lax (and often outright fraudulent) underwriting/originiation criteria by putting the implicit (now explicit) backing of the US Treasury behind them. Was that actually making loans? Perhaps not, but only by a technicality. The originators were using short-term credit to fund those loans, then turning around and selling them to Fannie/Freddie within days.. saying that Fannie/Freddie weren't making the risky loans is like saying that you aren't actually making a purchase when you buy something with a credit card, because you don't give the money to the credit card company until your statement arrives.