OK, so I am watching a news report the other day and Barney Frank is talking about how the lack of appropriate regulation led to the failure of Fannie Mae and Freddie Mac. My jaw dropped……….. he goes on to say that he has been a leading voice for reform (of Fannie Mae and Freddie Mac). ….. Huh?? Wait a minute……….I double checked the station to make sure I wasn’t watching the Sci-Fi channel.
Let me go on the record as saying I apologize to the Sci-Fi channel because when compared to Mr. Frank’s story, their shows are completely plausible !!!
Now I will be the first one to point out that I believe the blame for this debacle lies firmly in the greedy mitts of those inhabitants of the Capital on BOTH SIDES of the aisle. I’m also beginning to believe institutional Alzheimer’s seems to be reaching an epidemic.
Listen folks, this train wreck has been coming down the tracks for a very long time, like the 4:38 out of Penn Station. It’s passed through a lot of stations and no one in charge seemed to notice the brakes weren’t working. OK, lets face it the train is going to crash, but right now the conductor and engineer are arguing over whose at fault while the passengers watch in horror. What a bunch of knuckleheads.
So, here I am listening to this condescending “Joey bag o’ donuts” spouting on about the Republicans being to blame. My friends, this is what politicians do. They point fingers at their political adversaries hoping that no one will look at their records. So for the moment, I’m going to give the republicans a pass because Mr. Frank deserves what’s coming.
For those of you who do not know him, Mr. Frank is a democrat from Massachusetts and has been in Congress since 1981. He is the current Chairman of the Financial Services Committee and previously served as the ranking democratic member on that committee. Now, for everyone who wasn’t paying attention, or didn’t want to do the math, Mr. Frank has served in Congress for twenty-seven years. He is also an attorney, and has taught in University of Massachusetts Boston, the John F. Kennedy School of Government at Harvard and at Boston University. I state these facts to show that according to established norms, the man is not an idiot. On 2nd thought, strike that. I’ll let you be the judge.
So now Mr. Frank is complaining that this fiasco is the fault of a Republican-controlled Congress that failed to produce reform several years ago. But I guess that now, under his Democratic stewardship, he will lead the battle for reform.
OK, you have heard the tale. Now HEAR the tale. This is a transcript of Mr. Frank’s statement during hearings FIVE YEARS AGO (September 10th, 2003) for regulatory legislation. I’m partially editing this to toss out the political BS and get to the meat. The video of the full hearing, including Mr. Frank’s speech (begins at 4:40 mark), is available here: CLIP
"I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury.
I must say we have an interesting example of self-fulfilling prophecy. Some of the critics of Fannie Mae and Freddie Mac say that the problem is that the Federal Government is obligated to bail out people who might lose money in connection with them. I do not believe that we have any such obligation. And as I said, it is a self-fulfilling prophecy by some people.
Now, we have got a system that I think has worked very well to help housing. The high cost of housing is one of the great social bombs of this country. I would rank it second to the inadequacy of our health delivery system as a problem that afflicts many, many Americans. We have gotten recent reports about the difficulty here.
The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disastrous scenarios. And even if there were a problem, the Federal Government doesn't bail them out. But the more pressure there is there, then the less I think we see in terms of affordable housing. "
WHAT?????? Go back and Re-Read the highlights. Remember HE SAID THIS FIVE YEARS AGO!!!!!!!! I like the one part about how “fundamentally sound financially…” Is he smoking Crack ??
The bottom line is that in 2003, there were enough warnings, investigations and scandals concerning Fannie and Freddie that led the former Treasury Secretary (John Snow) to three observations:
1. Fannie Mae and Freddie Mac had strayed well beyond their traditional investment roles.
2. The two lenders were grossly overextended relative to their capital.
3. The bookkeeping at these institutions was shoddy at best or out-right crooked.
Obviously, this was a problem and Snow proposed to bring them under one authority that would rigorously limit their exposure and ensure they stayed within acceptable limits of risk. Guess what, the legislation didn’t pass. Anyone want to take a guess as to how Mr. Frank voted? You got it, NO. Remember, he didn’t think there was a problem.
Does anyone now believe that Mr. Frank is competent to continue serving in Congress or on this Committee?? This man saw no problems brewing, even though they were holding hearings five years ago seeking legislative reform and increased oversight.
He is now on record trying to explain that it was the “REPUBLICANS” fault, because they added “bad stuff”. Please, what’s next “the dog ate my homework?” The truth is all the information on his testimony & this legislations is available. He is just hoping that everyone will believe him and not look into it. Be your own judge.
The bottom line is that all the warnings were out there and they did NOTHING. Partisan BS has led us to this point. Even former Fed Chairman Alan Greenspan is on record warning about the risks posed by the malevolent little siblings. Yet we are to believe that Mr. Frank saw no problems.
Oh by the way, I’m not a big smoke and mirrors guy but can anyone explain to me how it is that, with less than four years as a US Senator, Barack Obama (D-Il) is the #2 recipient of Fannie Mae and Freddie Mac Campaign Contributions. He has received $126,349. Less than the top recipient Chris Dodd (D-Ct) who received $165,400 and ahead of John Kerry (D-Ma) who got $111,000. Current members of Congress have received a total of $4.8 million from Fannie Mae and Freddie Mac, with Democrats collecting 57 percent of that.
OK, now I understand why there were “no problems”……… Change we can Believe in??? Huh??? Sounds like Business as usual to me.
The Angry American
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