Barney Frank was a leading opponent of the regulation of Fannie Mae and Freddie Mac. Frank never made to answer about how we got into the present crisis. Why he fought so hard to squash regulation or why he pushed Fannie and Freddie to get involved with making loans to people who could not afford them? Because he was never confronted, he has been empowered to go at it again.

In March, Fannie Mae announced it would no longer guarantee mortgages on condos in buildings where fewer than 70 percent of the units have been sold, up from 51 percent, the paper said. Reports are that Freddie Mac will implement the same policy next month.

Representatives Barney Frank, chairman of the House Financial Services Committee, and Anthony Weiner, the man who wanted to be NYC Mayor, sent the companies letters asking them to ease up on the legislation, warned that a 70 percent sales threshold "may be too onerous" and could lead condo buyers to shun new developments, according to the paper. The legislators asked the companies to "make appropriate adjustments" to their underwriting standards for condos. In other words, here we go again:

re: “Why he fought so hard to squash regulation or why he pushed Fannie and Freddie to get involved with making loans to people who could not afford them?”

This author is incompetent. Barney never, ever squashed regulation of anything. To PUSH for something the way Barney did is in fact regulation. The author makes the false assumption that regulation is only regulation if it is the kind of regulation he prefers.

This intellectual dishonesty is rampant. Enron is said to have exploited an de-regulated energy market. That is blatantly false. What happened was that the regulations changed from one regulatory approach to a different regulatory approach. Enron tried to exploit the gap between the two different approaches that existed.

The same is true of CA under Greyout Davis. Californika shifted from one type of regulation to a different type of regulation and created its own disaster.

The same is true of banking. Previously many banks were state regulated. That shifted to being Federally regulated. Those two disparate regulatory systems created an opportunity to exploit the gap.

Gramm-Leach-Bliley and other Clinton era activity was not de-regulation. In fact the regulations increased. But it was a drastic change from one set of regulations to a totally different set of regulations. The new regulations were more complex with more loopholes to be exploited.

For an eye opener, go back and re-read that post the other day where Krugman insists that the Fed inflate a "housing bubble" to cover the impact of the dotcom crash. That was in 2002. Is that what happened? Sure looks like it. Then we have folks like Dodd who get briefed on "we are letting the air out of the balloon" and dump stocks the week before things crash. IMHO this is clear evidence of gummint corruption on an astronomical scale. Indeed, trillions is truly astronomical. 10 to the 12th.

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