You would be hard-pressed to find a politician who is less frank than Congressman Barney Frank. Even in an occupation where truth & candor are often lacking, Rep. Frank is in a class by himself when it comes to rewriting history in creative ways. Moreover, he has a lot of history to rewrite in his re-election campaign this year.
No one contributed more to the policies behind the housing boom & bust, which led to the economic disaster we are now in, than Frank.
His powerful position on the House of Representatives' Committee on Financial Services gave him leverage to force thru legislation & policies that pressured banks & other lenders to grant mortgage loans to people who would not qualify under the standards which had long prevailed, & had long made mortgage loans among the safest investments around.
All this was done in the name of promoting more homeownership among people who had
neither the income nor the credit history that would meet traditional mortgage lending standards.
To those who warned of the risks in the new policies, Frank replied in 2003 that critics "exaggerate a threat of safety" & "conjure up the possibility of serious financial losses to the Treasury, which I do not see." Far from being reluctant to promote risky practices, Frank said: "I want to roll the dice a little bit more in this situation."
With the federal regulators leaning on banks to make more loans to people who did not meet
traditional qualifications the "underserved population," in political Newspeak … & quotas being given to Fannie Mae & Freddie Mac to buy more of these riskier mortgages from the original lenders, critics pointed out the dangers in these pressures to meet arbitrary homeownership goals. But Barney Frank counterattacked against these critics.
In 2004 he said: "I believe that we, as the federal government, have probably done too little
rather than too much to push them to meet the goals of affordable housing." He went further: "I would like to get Fannie & Freddie more deeply into helping
low-income housing."
Fannie Mae & Freddie Mac were crucial to these schemes to force lenders to lend to those whom politicians wanted them to lend to, rather than to those who were most likely to pay them back. So it is no surprise that Barney Frank was very protective toward these 2 government-sponsored enterprises that were buying up mortgages that banks were willing to make under political
pressure, but were often unwilling to keep.
The risks that banks were passing on to Fannie Mae & Freddie Mac were ultimately risks to the taxpayers. Altho there was no formal guarantee to these enterprises, everybody knew that the federal government would always bail them out, if necessary, to keep them from failing. Everybody except Barney Frank.
"There is no guarantee," according to the congressman in 2003, "there is no explicit guarantee, there is no implicit guarantee, there is no wink-&-nod guarantee." Barney Frank is a master of rhetoric who does not let the facts cramp his style.
Fast-forward now to 2008, after the risky mortgages had led to huge #s of defaults, dragging
down Fannie Mae, Freddie Mac & the financial markets in general & w/them the whole economy.
Barney Frank was all over the media, pointing the finger of blame at everybody else. When CNBC's Maria Bartiromo asked Frank who was responsible for the financial crisis, he said "right-wing Republicans." It so happens that conservatives were the loudest critics who had warned for years against the policies that Frank pushed, but why let facts get in the way?
Ms. Bartiromo did not just accept whatever Barney Frank said. She said: "With all due respect, Congressman, I saw videotapes of you saying in the past, 'Oh, let's open up the lending. The housing market is fine.'" His reply? "No, you didn't see any such tapes."
"I did. I saw them on TV," she said. But Barney Frank did not budge. He understood that a good offense is the best defense. He also understands that rewriting history this election year is his best bet for keeping his long political career alive.
No one contributed more to the policies behind the housing boom & bust, which led to the economic disaster we are now in, than Frank.
His powerful position on the House of Representatives' Committee on Financial Services gave him leverage to force thru legislation & policies that pressured banks & other lenders to grant mortgage loans to people who would not qualify under the standards which had long prevailed, & had long made mortgage loans among the safest investments around.
All this was done in the name of promoting more homeownership among people who had
neither the income nor the credit history that would meet traditional mortgage lending standards.
To those who warned of the risks in the new policies, Frank replied in 2003 that critics "exaggerate a threat of safety" & "conjure up the possibility of serious financial losses to the Treasury, which I do not see." Far from being reluctant to promote risky practices, Frank said: "I want to roll the dice a little bit more in this situation."
With the federal regulators leaning on banks to make more loans to people who did not meet
traditional qualifications the "underserved population," in political Newspeak … & quotas being given to Fannie Mae & Freddie Mac to buy more of these riskier mortgages from the original lenders, critics pointed out the dangers in these pressures to meet arbitrary homeownership goals. But Barney Frank counterattacked against these critics.
In 2004 he said: "I believe that we, as the federal government, have probably done too little
rather than too much to push them to meet the goals of affordable housing." He went further: "I would like to get Fannie & Freddie more deeply into helping
low-income housing."
Fannie Mae & Freddie Mac were crucial to these schemes to force lenders to lend to those whom politicians wanted them to lend to, rather than to those who were most likely to pay them back. So it is no surprise that Barney Frank was very protective toward these 2 government-sponsored enterprises that were buying up mortgages that banks were willing to make under political
pressure, but were often unwilling to keep.
The risks that banks were passing on to Fannie Mae & Freddie Mac were ultimately risks to the taxpayers. Altho there was no formal guarantee to these enterprises, everybody knew that the federal government would always bail them out, if necessary, to keep them from failing. Everybody except Barney Frank.
"There is no guarantee," according to the congressman in 2003, "there is no explicit guarantee, there is no implicit guarantee, there is no wink-&-nod guarantee." Barney Frank is a master of rhetoric who does not let the facts cramp his style.
Fast-forward now to 2008, after the risky mortgages had led to huge #s of defaults, dragging
down Fannie Mae, Freddie Mac & the financial markets in general & w/them the whole economy.
Barney Frank was all over the media, pointing the finger of blame at everybody else. When CNBC's Maria Bartiromo asked Frank who was responsible for the financial crisis, he said "right-wing Republicans." It so happens that conservatives were the loudest critics who had warned for years against the policies that Frank pushed, but why let facts get in the way?
Ms. Bartiromo did not just accept whatever Barney Frank said. She said: "With all due respect, Congressman, I saw videotapes of you saying in the past, 'Oh, let's open up the lending. The housing market is fine.'" His reply? "No, you didn't see any such tapes."
"I did. I saw them on TV," she said. But Barney Frank did not budge. He understood that a good offense is the best defense. He also understands that rewriting history this election year is his best bet for keeping his long political career alive.
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