Warsh Revisited: A Tale of Cozy Ties Between White House and Fed

A little-known story from over two decades ago has resurfaced in recent days, highlighting the close ties between the White House and the Federal Reserve. In 2003, then-Fed Chairman Alan Greenspan's phone logs showed that he regularly consulted with Kevin Warsh, a young Bush administration White House staffer, about Fannie Mae and Freddie Mac.

This revelation took Damian Paletta back to the memory of Barney Frank's infamous 'roll the dice' quote in 2003. During a House Financial Services Committee hearing on September 25, 2003, Frank resisted calls for tighter regulatory oversight and strict capital requirements for Fannie Mae and Freddie Mac loans, saying, 'I want to roll the dice a little bit more in this situation towards subsidized housing.'

The subprime mortgage market collapsed in 2008, triggering a global financial crisis. Critics often quoted Frank's words as evidence of a flippant attitude among congressional Democrats toward adequate oversight of subprime mortgage loans.