The New York Times does a fairly decent job skewering President Bush on the housing collapse. But it leaves many facts unreported.
(1) Henry Paulson originated many of the CDOs during his tenure at Goldman Sachs. When the CDOs fell apart, Goldman was not holding many of them. Meaning to me, that he knew they were toxic before he put himself in as Treasury Secretary.
(2) Peter Orszag told Congress that taking Fannie-Freddie over would probably not cost the government anything, right before the vote. In truth, the cost will be in the trillions. It is possible that Orszag willfully misled Congress.
(3) The Board of Directors of Fannie-Freddie were responsible to oversee good business practices at these GSEs. In practice, these Directors oversaw the GSEs take over clearly bad loans at the end. These were willful actions and likely are fraudulent.
Brick Oven calls on the incoming Administration to launch an investigation into these three questionable actions.
Peter Orszag will lead the new Administration’s Office of Management and Budget.