The moderators question Newt over having been a consultant for Freddie and Fannie. Newt takes great umbrage, saying all he did was “offer them advice on precisely what they didn’t do.”
“I have never done any lobbying,” he continues. “I offered my advice. I walked in as an historian… and I said ‘this is a bubble, this is insane, this is impossible.’”
This is a full transcript of his follow-up:
“No. I have never done that. I assume I get a second question. I have never done any lobbying. Every contractor was written during the period I was out of the office. Specifically said I would do no lobbying. I offered advice. My advice is historian when they walked in and said we are now making loans to people that have no credit history. And have no record of paying back anything but that’s what the government wants us to do. I said at the time, this is a bubble. This is insane. This is impossible. It turned out unfortunately i was right and the people who were doing exactly what congressman bachmann talked about were wrong. I think it is a good case for breaking up fannie mae and freddie mac and getting much smaller institutions back into the private sector to be competitive and to be responsible for their behavior. cain, fannie mae and freddie mac, congresswoman bachmann said now underwrite or guarantee 90% of the home financing in this country. What would you do with these — fannie mae and freddie mac? Would you shut them down even though it could mean higher interest rates for america? Does it make harder than it is right now for americans to get home loans?”
