Newt’s Freddie Problem

Image:  UK Guardian Image: UK Guardian

Image: UK Guardian

With Newt Gingrich getting more attention as his poll numbers increase the former speaker of the house is steadily receiving more scrutiny.

Despite some missteps and losing much of his campaign staff early, Gingrich’s campaign has survived largely because of the image he has crafted for himself over the decades and in countless debates.  That image is one of an intellectual and one who is smart enough to navigate the country through perilous economic times.  Today Gingrich seems to envision himself not as the toxic partisan of old but as a wise, elder statesman of the party.

Since its passage there have been few issues that have energized conservatives more than the $700 TARP bailout. As embarrassing as Gingrich’s climate change commercial with Nancy Pelosi was it may be his connection to mortgage giant Freddie Mac that sinks his campaign.

Gingrich is currently fielding questions about the fees he collected while a “consultant” for Freddie Mac, a sum he says was around $300,000 but which an ex-Freddie official claims reached at least $1.5 million.

Gingrich refers to his time with Freddie Mac as a “paid historian” and claims he called the housing market a “bubble” and that it was “insane” that people were getting loans who should never have received them.  Freddie Mac contradicts Gingrich’s version and even disgraced lobbyist Jack Abramoff says of Gingrich’s tale, “I’m unaware of any history professor being paid that sort of money to give someone a history lesson.”

Considering other politicos Jim Johnson and Franklin Raines raked in millions more, the figure of $1.8 million, the largest estimation of Gingrich’s pay-out from Freddie Mac, seems paltry.  But even though he is a former speaker of the house, Gingrich is running in this race as an outsider and as the intellectual of the GOP but his connection to Freddie Mac exposes him as the perennial insider he has always been.

Gingrich was brought onto Freddie Mac in the first place so the mortgage giant, typically identified with Democrats, could reach out to the GOP.  According to the Christian Science Monitor Gingrich said of his time there, “every American should be interested in expanding housing opportunities.”

Does this not sound like the attitude shared by American presidents from Jimmy Carter to Bill Clinton to George W. Bush?  Does he not sound like the same people who bullied banks into lowering lending standards for people who were traditionally unable or unlikely to pay them back?  Wasn’t this the sort of thing Gingrich purportedly decried to the executives of Freddie Mac?

Gingrich’s connection to Freddie Mac doesn’t end there.  On the litmus test that ended the career of Utah senator Bob Bennett, Gingrich the outsider and Gingrich the intellectual were right in line with the leaders of both parties in supporting the most unpopular legislation as far as Republican primary voters are concerned.

In a TV spot with Greta Van Susteran after the first bailout bill was rejected, Gingrich said of the new bill, the one that eventually passed, as having been “dramatically improved” by Reps. John Boehner, Eric Cantor, Roy Blunt, and Paul Ryan, and that he would have voted yes.  For those keeping score at home, the same Paul Ryan some conservatives want to see as a savior is the same Paul Ryan that voted for and “improved” a TARP that was still intolerable.

In short, Gingrich was no good in either seeing the housing collapse coming or opposing the largest redistribution of wealth that resulted from it.  If Gingrich really saw the housing bubble as “insane,” and since Freddie disputes Gingrich’s claim that he warned them, surely there would be a record of a man constantly giving speeches and writing books saying it some other time.

It is frequently heard that for all his faults, it can’t be denied that Gingrich is smart.  Even liberal Democrats make this claim.

Early this year National Review magazine published an article by Gettysburg College professor Allen Guelzo criticizing newfound enthusiasm on the right for nullification after the publication of Tom Woods’ recently-released book on the subject.  I wrote about how ironic it was that the conservative Guelzo and liberal Princeton professor Sean Wilentz both reached the same conclusion that any curtailment of DC’s power  is simply too dangerous to allow. If members of both the establishment right and establishment left make the same claims then there is a good chance that the whole thing is a scam.

The same looks true for the “intellectual” Newt Gingrich.

Carl Wicklander
Carl Wicklander is a regular contributor to He lives in Illinois with his wife.


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