So, If Resisting New Financial Regulations Was a Bad Thing . . .

by Pejman Yousefzadeh on October 9, 2010


Then why aren’t more liberals upset that Tom Donilon is going to be given a high-level job in the Obama Administration?

Before President Barack Obama picked him to be his next national security adviser, Tom Donilon was a lobbyist for mortgage giant Fannie Mae and fought off congressional attempts to impose new regulations.

As Fannie Mae’s legal counsel and top strategic thinker in the late 1990s to the middle of this decade, Donilon left his sizable imprint on the company long before its takeover by the government amid the wreckage of the housing market. By that time, Donilon had moved on, well before what critics said was a day of reckoning after years of inadequate regulation and lax oversight.

In early 2008, seven months before disaster struck, Fannie Mae and its smaller cousin, Freddie Mac, held in their portfolios or guaranteed $4.9 trillion in home-mortgage debt. The government took over Freddie Mac the same day. Their rescue has cost taxpayers more than $148 billion so far.

It’s a fair question, I think. And you know that if Donilon were a Republican, he would have caught Hell by now from the liberal blogosphere for his efforts to keep Fannie Mae as regulation-free as possible. To be sure, I don’t blame Donilon and other Democrats for realizing while working in the private sector that over-regulation kills. I just wish they would remember the lesson when working in government and setting policy.

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