The GSE conference at Treasury today included plenty of big names and good thoughts about the lingering question of how to restructure Fannie and Freddie before releasing them back into the wild. But one thing missing from the agenda was a sense of urgency. The conference wasn’t intended to move GSEs up on the agenda right now; it was simply a bit of theater to defuse the issue for a few more months, giving the Administration more time to kick some hard choices down the road.
Everyone knows we still need to do something about Fannie and Freddie. The problem for Geithner is that everyone keeps talking about it. The editorial chatter about GSEs is gaining momentum (after all, there’s only so much Steven Slater coverage even August can handle). The New York Times ran two op-eds last weekend (good and not-so-good), former Treasury Secretary Paulson weighed in on the Post’s opinion page, and think-tank proposals are popping up all over, especially from folks like Don Marron who want to shrink or privatize the role of Fannie and Freddie in lending markets.
So Secretary Geithner did what any good politician would do. He co-opted the debate to keep it from growing beyond his control. By inviting differing voices to vent their opinions in front of the cameras, Geithner got to look like he was on top of the situation and neutralize the situation for now with a concluding pleasantry that “it’s safe to say there’s no clear consensus yet on how best to design a new system.” Thanks for that, Tim. I guess we shouldn’t hold our breaths for “consensus” anytime soon, huh?
With elections weeks away and the crippled housing market still relying on the dual crutches of Fannie and Freddie to move forward at all, it’s no surprise the Administration and Congress are not falling over themselves to begin the fight for a specific reform plan. Geithner has said the Administration plans to release and administration proposal in January (well after the elections), and the tone of today’s conference was consistent with that schedule. For anyone who bothered to tune in today (and managed to stay awake), the message from the Administration was this: we know it’s important, and we’ll get around to it eventually . . . maybe once we get back from that Gulf-coast beach trip the President wants us all to take.
