Barney Frank RAT-MA: U.S. is in worst economic crisis since Great Depression (gets a standing 'O')

Wicked Local ^ | 11/03/08 | Ben Kossack

[Libloather]

Frank: U.S. is in worst economic crisis since Great Depression
By Ben Kossack/Correspondent
Mon Nov 03, 2008, 04:20 PM EST

SHERBORN - This is the worst economic crisis the United States has been in since the Great Depression, but it will likely not turn into a depression, a cautiously optimistic Congressman Barney Frank, D-4th, told a crowd of more than 100 during a recent visit to Sherborn.

Frank took the stage to explain how the country got itself into the current economic crisis, and how it will bring itself out of it.

Regulation was the watchword as Frank addressed the three questions that needed answers that night: How did we get into this crisis; how do we get out of it; and how do we prevent another from happening?

To answer the first question, Frank began with an explanation of sub-prime mortgages and securitization. These sub-prime mortgages were the “bullets” that shot the economy, Frank said. But, he added, bullets are nothing without a gun, and the “gun” was securitization.

Frank said the crisis “crystallized” in his head when he heard a story from a man whose family had been evicted from an apartment because they were unable to make rent. They looked for another place to rent, but with no luck. Nobody would rent to someone who couldn’t make rent payments. So, he got a loan and bought a house.

Frank lay partial blame for the crisis on not only the kinds of unwise loans that made buying a house easier than renting an apartment, but also the push towards an “ownership” society. Some people, he said, for social or economic reasons, simply should not be buying homes.

Near the end of the talk, Frank began to outline how the bailout plan helps not only the banks and other financial institutions that the money is being directly given to, but the economy as a whole, and what further measures are needed to continue to bring the economy out of its slump, including giving more money to states and towns for infrastructure work, which would not only maintain funding for much-needed projects already in the works, but also create domestic jobs to curb unemployment.

When the floor was opened for questions, they ranged far from the immediate topic, and reflected the range of people asking, from high school students to bankers. Generally, those who took the microphone seemed to be concerned with how the financial meltdown would affect other areas of the economy. There was a question on the auto industry, and one on credit cards. There was one on commodity futures, and one on the Cuban embargo. There were a few on clarifications of statements Frank had made earlier, and a few on how to preserve or rebuild trust relationships in the economy. One questioner asked Frank to assume some of the responsibility for causing the crisis.

In the end, Frank left to a standing ovation.

[Askwhy5times]

Barack Obama's little shop of economic horrors Barack Obama named Clinton's Treasury Secretary Larry Summers as his top economic adviser at the White House as head of the National Economic Council.

Obama described Summers as “one of the great economic minds of our time” who has “earned a global reputation for being able to cut to the heart of the most complex and novel policy challenges.” Link.

Larry Summers is one of the people most responsible for the failure of the banking system. He was a strong advocate of scrapping Glass-Steagall. He did this under the encouragement of Former President Bill Clinton who received large contributions from Wall Street. Repeal of this regulatory act led to the repeal of more banking regulations and the spiral into the crisis we are now in. He has named a flaming liberal, Melody Barnes, as director of the White House Domestic Policy Council. These people will be working closely with Barney Frank, Maxine Waters and other Congressional democrats who are culpable in the economic crisis we face today. This is very much like putting the inmates in charge of the asylum.