In his speech this morning, Tim Pawlenty singled out Freddie Mac and Fannie Mae as examples of programs the “Google Test” — Pawlenty’s new term for any item or service that can be found online offered by a private entity — would eliminate.
“Fannie and Freddie were all built for a different time in our country. When the private sector did not adequately provide those services. That’s no longer the case,” Pawlenty said.
But in 2008, the Minnesota governor supported bailing out — not eliminating — Fannie and Freddie. Speaking at National Press Club Luncheon in 2008, Pawlenty was asked, “How can you be such an advocate of marketplace economics when airlines, banks, and trillion-dollar mortgage insurers like Fannie Mae and Freddie Mac are in need of rescue by the American taxpayer?”
“[I]n an ideal marketplace, you’d allow those entities to fail,” Pawlenty said in part of his response to the question. “But if you allow those entities to fail, the consequences are so severe for innocent bystanders, namely average Americans who rely on the markets, rely on those mortgages, you know, the consequences are too severe.”
Pawlenty emphasized that again a little further into his response. “They are too big, the consequences are too severe for innocent bystanders to allow them to fail,” he said. “So it’s an imperfect solution, but you also have to be pragmatic about getting the mess cleaned up.”
The Pawlenty campaign did not immediately return a request for comment.
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UPDATE: Pawlenty spokesman Alex Conant points out that in those remarks, Pawlenty did acknowledge “in an ideal marketplace, you’d allow those entities [Fannie and Freddie] to fail.”