Thursday, August 19, 2010
Barney Frank Wants to Slay the Freddie-Fannie Hydra
Has Hell frozen over? Is uber-liberal Congressman Barney Frank (D-MA) actually admitting his complicity in subprime mortgage crisis . Almost, but no and no. Frank, the House Financial Services Chairman, has been widely blamed as one of the people responsible for allowing Fannie Mae and Freddie Mac to collapse, dragging the housing market down along with much of the rest of the economy its wake. Suddenly, however, Frank is sounding Republicanesque on the subject of housing. There's a big election coming, after all, and he and other Democrats are very aware that many voters understand the role their party played in the catastrophe. Massachusetts Democrat congressman Barney Frank has called on government mortgage lenders Freddie Mae and Fannie Mac to be abolished instead of being reformed and the Federal Housing Administration (FHA) should be completely self-financing. “They should be abolished,” Frank said during an interview on the Fox Business Network. More at The Right Perspective... [See the August 17 FoxNews interview in the video below.]
Below: Democrats Fighting Regulation of Freddie & Fannie
The Wall Street Journal expressed surprise at Frank's call to kill Fannie and Freddie:
Well, praise be. Two years ago next month, then Treasury Secretary Hank Paulson put the two government-sponsored mortgage-finance giants into conservatorship, and Congressman Frank declared himself pleased that there was a good chance, according to government bean-counters, that the rescue wouldn't cost taxpayers a dime. Also at the time, Mr. Frank scoffed at the Bush Administration's view that Fan and Fred should be wound down, saying it would never happen. One and a half trillion dimes ($149 billion) later, Mr. Frank appears to have seen the light. Full article here...
But will this be like cutting off heads of a Hydra? Cut one head off, two grow back. While the "good" news is that Fannie and Freddie just might go away, the bad news, however, is that they may be replaced by "Thousands Of Fannie And Freddies," warns Business Insider. Regardless of how many heads are taken off, any "definitive conclusions on Fannie, Freddie [are] more than a year away," says International Business Times.
John at Veru Serum (blog) wrote a good post today, in which he notes Frank's audacious hypocrisy in now calling for the abolishment of Fannie and Freddie. Here's an excerpt from John's post, "Barney Frank Takes Credit for Cleaning Up His Own 'Toxic' Mess":
When the subprime mortgage crisis was beginning to surface in 2007, Frank and fellow Democrats Reid and Pelosi pushed for, and got, a change in policy so that for the first time in history Fannie and Freddie could buy up these troubled assets.
So, to recap…First they push for policies that create the bubble, then they push to have the federal government back up the bad loans that result from it. The end result of all this government intervention is the shambles of an economy we are now enjoying.
Given the clear history, it takes some nerve to go on national TV and announce that one of the chief problems with the housing market is that Fannie and Freddie were buying up bad loans. And yet, here’s Barney Frank doing just that [in the August 18 Fox interview]....
John included the above Fox News interview of Frank and two more videos: One shows Frank in 2005 talking about the "excessive worry" about a housing bubble potential, and the other shows Frank in 2006 "admitting that lax regulatory policy towards Fannie and Freddie was all about expanding housing'," writes John. "He makes very clear that he supported this move and says again that fears of a housing bubble are overblown."
Hot Air's Ed Morrissey makes the point about Frank's fear of losing in November and his hypocritical new stand on Fannie and Freddie:
"While he nearly dislocates his shoulder attempting to pat his own back by claiming that he has said this all along," writes Morrissey, "it’s simply not true. Frank, in his role on the House Financial Services Committee, played a huge part in creating and maintaining the government intervention that severely distorted the lending markets. Whether or not he ever uttered a comment along the way about overdoing home ownership, Frank’s actions helped to create and maintain those policies, and he defended them repeatedly over the last twelve years." Full post here...
Most Americans see what Frank and the Democrats are up to by suddenly calling for the demise of Fannie and Freddie. Perhaps Frank is trying to fool some of us into thinking he's a reformer. He's not. Maybe he's trying to divert attention away from his involvement in the budding Maxine Waters scandal and the Boston Globe's call for his resignation. It's just another reason to vote Frank and his fellow Democrats out in November.
Barney to Fannie: Drop Dead Wall Street Journal
The future of Fannie and Freddie? None James Pethokoukis, Reuters
Barney Frank Calls For Dissolution of Fannie and Freddie Total Mortgage Services
Here's How The Community Reinvestment Act Led To The Housing Bubble's Lax LendingRead more Business Insider
Barney Frank tied into Maxine Waters corruption scandal – Boston Herald calls for his resignation FireAndreaMitchell.com