House Financial Services Committee Chair Hensarling Delivers Opening Statement at FHFA Hearing (with Lofchie Comment and Music Selection)

At a full committee hearing of the Federal Housing Finance Agency ("FHFA"), House Financial Services Committee Chair Jeb Hensarling (R-TX) delivered an opening statement in which he asserted that, through the FHFA, Washington is repeating the same mistakes that caused the financial crisis.

At the hearing, which was titled "Sustainable Housing Finance: An Update from the Director of the Federal Housing Finance Agency," Chair Hensarling asserted that the cause of the financial crisis was "dumb regulation" rather than deregulation, and stemmed from "Washington greed"; i.e., from lust for the power to "command and control huge swaths of our economy."

Chair Hensarling asserted that, just as Washington "rolled the dice" with subprime mortgages, so it is taking risky action again through various FHFA regulations. According to Chair Hensarling, these regulations are harmful to the transition to a "sustainable housing finance system that protects both homeowners and taxpayers."

In conclusion, Chairman Hensarling warned of the consequences of the FHFA's proposal to "siphon off taxpayer" funds from Fannie and Freddie in order to begin filling government housing "slush funds."

Lofchie Comment: Underlying Chair Hensarling's comments is the assertion that the "cause" of the financial crisis is politics and "Washington's ruling class." The Democrats, essentially "voted" to determine that the causes of the crisis were derivatives and private funds. Had the Republicans been in the majority, it is likely that they would have "voted" to find different causes for the crisis. One wonders whether a different process is possible; whether the truth is out there. Probably not. Still, one can be hopeful that Chair Hensarling's voicing of an alternative view of causation will initiate some kind of inquiry, given that it should be obvious by now that the causes discovered initially were, at best, incomplete.

See: HFSC Press Release; Video of Hensarling's Opening Statement.