Posted on 09/27/2008 6:50:07 AM PDT by Leisler
“I want [Freddie Mac and Fannie Mae] to help with affordable housing, to help low-income families get loans and to help clean up this subprime mess. Otherwise, why should they exist?”
- Rep. Barney Frank, earlier this month.
The Subprime Panic of ’08 and its $1 trillion (and rising!) price tag is too big to blame on any one man. But if we had to, it would be Newton’s own Rep. Barney Frank.
As Winston Churchill might have put it, never before has one man done so much that was so wrong, or shafted so many on behalf of so few.
Entire business sections of newspapers, including this one, have been dedicated to explaining how we got into this mess, and still the typical taxpayer is asking “So what happened?”
The answer is actually quite simple: Freddie and Fannie happened. And they couldn’t have without the ferocious support of Barney Frank.
Freddie and Fannie were supposed to be safe suppliers of mortgage money for relatively low-risk loans. If you could qualify for a loan, F&F would make sure the banks had access to the money to make that loan, cheap money because it was backed by the American taxpayers.
But liberals like Barney Frank wanted more. They wanted the low cost of low-risk loans to be extended to higher-risk borrowers with lower incomes, fewer assets or less-solid credit. Barney and friends used the regulations of the Community Reinvestment Act to threaten lenders into making these loans. And banks, trying to meet Frank’s demands, expanded riskier lending schemes like subprime mortgages.
That’s when Freddie and Fannie stepped in. As Kevin Hassett of the American Enterprise Institute put it: “They fueled Wall Street’s efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools.”
Lenders asked themselves, why should I care how shaky these borrowers are or risky the loans if a government-backed body is going to buy them up anyway?
The loans were made, the housing market bubbled, contributions from F&F flowed to Democrats like Chris Dodd and Barack Obama, and everyone was happy. Until they weren’t.
Without Freddie and Fannie’s reckless expansion, the housing bubble doesn’t happen. Without the implied promise behind F&F’s money, investment banks don’t dive into the derivatives market.
Instead, we did it Barney’s way.
Not only has Frank spent his career stopping any real reform of Fannie and Freddie, he repeatedly insisted they weren’t backed by the taxpayers. “There is no federal liability whatsoever,” Frank said in 2000.
But two weeks ago, we had to bail them out with $200 billion in our tax dollars.
Alan Greenspan, John McCain and others warned that F&F were taking on too much risk, but Frank dismissed these “overblown” fears as ideological attacks against his favorite cash cow. Even after Franklin Raines and Joe Johnson were caught red-handed mismanaging these institutions, Frank still insisted “we are not facing any kind of crisis.”
Just how deep in the Fannie/Freddie tank was he? As The Wall Street Journal reports: “Mr. Frank was publicly arguing for an increase in the size of their combined $1.4 trillion portfolios right up to the day they were bailed out. Even now . . . he opposes Treasury’s planned reduction in the size of the portfolios starting in 2010.”
Our markets have collapsed, we’re paying through the nose, and Barney Frank is still fighting to keep Fannie and Freddie on the dole.
Why? Because in his mind, the point of Fannie/Freddie is taxpayer-subsidized housing for low-income borrowers - no matter how bad their credit or how high the cost.
“Otherwise,” he asks, “why should they exist?”
And what about us, the responsible borrowers and hard-working taxpayers stuck with the trillion-dollar tab? In Barney’s world, that’s the only reason we exist. He spends. We pay.
This truly is Barney Frank’s bailout.
Outstanding piece, dude! Keep on telling it like it is!
“I will NEVER go communist.”
That’s your perogative. See you in the gulag.
San Fran Nan, Harry Vegas Reid, and Queen Bwaney, in charge. Not to worry Folks. Hop on the slippery slope to the Socialist state with Obama bin Biden.
All you Capitalist out there put your head between your legs and kiss your A$$ goodbye.
Herald's pretty conservative, now if this article was in the Globe - that would be some traction.
LOL!! How bout ‘I love Freddie Fannie’...LOL
Yeah, he loves him some fanny alright.
And not that 60 Minutes or the MSM is going to do it for us - we have to - before the public get's bored of the whole thing.
Barny Frank is openly gay (I'll use the polite word here as we are generally polite here at FR) - as such he will never have children, and that revels a mindset if you will.
So, I would say, Barney worries about the here and now - who will be his next boy toy and so on. So it follows that anything that allows him more pleasure is good and anything else is to be viewed as a thing to be battled.
I dare say he has not been in a church in quite some time. Anyway, this lack of progeny - openly acknowledged, may be the key to understanding the reasons why Barney ses monetary policy in a fundamentaly different light than someone, for example, who cares for or about their grandchildren.
So since Barney worships at the "Church of What's Happen'n Now (sorry Flip) ANYTHING that keeps his gravy train running is fine and damn the long term fallout.
From the WIki
Cyrenaicism (4th and 3rd centuries B.C.), founded by Aristippus of Cyrene, was one of the earliest Socratic schools, and emphasized one side only of the Socratic teaching. Taking Socrates' assertion that happiness is one of the ends of moral action, Aristippus maintained that pleasure was the supreme good. He found bodily gratifications, which he considered more intense, preferable to mental pleasures. They also denied that we should defer immediate gratification for the sake of long-term gain. In these respects they differ from the Epicureans
Another influential money man, John Maynard Keynes, was also openly gay, had no children.
Makes one think - eh?
/rant
Barney Frank can now claim to have done to 300 million people and the America economy the same exact thing he does to his boyfriend on a nightly basis.
Hmm...I don’t wanna do anything “on” Barney Frank, near Barney Frank, with Barney Frank, or after Barney Frank. I can’t believe this dimwit criminal keeps getting elected.
LOL!!
But liberals like Barney Frank wanted more. They wanted the low cost of low-risk loans to be extended to higher-risk borrowers with lower incomes, fewer assets or less-solid credit. Barney and friends used the regulations of the Community Reinvestment Act to threaten lenders into making these loans. And banks, trying to meet Frank’s demands, expanded riskier lending schemes like subprime mortgages. “
The above statement is really the core of the problem.
Fannie and Freddie used to a safe, vanilla, good idea. Like the adage of a dog turd polluting the punch bowl, they were the punch bowl that was polluted. Liberal Democrats are the dog turd.
There’s not much you can do about Barney Frank. He’s the product of 40 years of leftist lunacy.
“and I want him to go to JAIL!!!!”
He’d probably like jail
Bookmarking, thanks!
Isn’t the Boston Herald, so to speak, the newspaper of his district? Is the tide turning against him there?
No, it is the smaller, tabloid competitor to The Boston Globe which is owned by The New York Times. Boston is a two newspaper town. The Boston Herald is fairly normal to conservative.
Thanks. I thought most but maybe LA, NYC and possibly Atlanta and Chicago were one paper towns now.
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