The Corner

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There are lots of reasons for the fact that Newt Gingrich’s charging a tottering Freddie Mac $1.6 million in consulting fees probably won’t go away — in a way that his earlier indiscretions just might. Most have noted that he was always a harsh critic of the sewer of insider D.C. politics/profiteering in general, and in particular has more recently focused on the tawdry politics of politicos looting Freddie and Fannie as they imploded — and yet he was “consulting” for Freddie right until it began to go under.

But I think his biggest problem on this score was his mea culpa that he was not a consultant, but a “historian.” Is that laughable assertion supposed to be “candor”? If so, a historian would quickly have reviewed the record of Freddie and Fannie assets and liabilities, and then in quite dry fashion offered a conclusion that something was beginning to go quite wrong with these sorts of unaccountable, but costly, agencies.

But more to the point, there are literally hundreds of historians who deal in both economic and financial history and the history of U.S. government/private partnerships. Most such academics would probably have eagerly sought bids for consulting work at $30,000 a month (if it were open for bidding), done it far more cheaply, and stayed out of the politics of the agency’s funding. No one believes, then, that Freddie was looking for, or found, historical expertise.

Gingrich must know that he was hired, not because he was a better historian than his colleagues in the field, but to ensure bipartisan support from the conservative side for an agency that was starting to ring alarm bells about its very solvency, and indeed ethics. On his end, his stamp of approval would be aimed, in the manner of the later Pelosi global-warming ads, as a refreshing statesman-like embrace of a needed initiative that transcended politics; “home ownership,” after all, was often a conservative talking point about a larger “ownership” society. The lobbying was a win/win deal for both parties — as long as we think away a corrupt and near-insolvent agency paying huge sums to former politicians and political appointees without any banking experience: Review the compensation and quite immoral Fannie careers of those who, like a Franklin Raines ($90 million in aggregate Fannie income and bonuses), James A. Johnson ($200 million in aggregate Fannie income and bonuses), or Jamie Gorelick ($26 million-plus in aggregate Fannie income and bonuses), had no financial expertise, walked away with lots of money, left disasters in their wake, and were never really held to moral or legal account.

And that is the problem, is it not — that lobbying transcends politics, as liberal agencies court conservatives to pose as statesmen in their support, and more conservative bureaucracies sometimes seek out liberals who can pose as being “reasonable” — not for the idea of “reaching across the aisle,” but simply for profit.

However the issue or the primary race plays out, the net political effect is that Gingrich, despite his clear political gifts and proven ability to articulate issues — has neutralized the entire lobbying/insider issue, which would be an effective critique of the Obama administration. I don’t see how, to independents and conservative Democrats, he can be a credible critic of the disturbing pattern of Obama cronies and donors getting Solyndra-like easy loans, or the hypocrisy of Obama’s verbiage about revolving doors and lobbyists contrasted with the career of, say, someone like a Peter Orszag. In short, there will be a Dodd-Frank/fox-in-the-henhouse flavor to all of Gingrich’s future criticism of the Obama administration’s Chicago-style ethical lapses.