I don’t want to ridicule Barney Frank on account of his weight. Suffice it to say he is easily able to pull off the two faces he routinely wears, and the two sides he routinely takes.
Frank: “well one of my biggest differences with the Bush administration, even with the Clinton administration, was that they overdid that. I have always been critical of this effort to equate a decent home with home ownership. I think we should have been doing more to provide rental housing, my efforts have been to try and get affordable rental housing I was very much in disagreement with this push into home ownership and I think the federal government should not be artificially doing that. The goal is for people to have decent housing and I think beginning in the Clinton administration, exacerbated by Bush, we pushed people too much into home ownership…”
– Barney Frank, May 20, ‘2010 on CNBC.
And here’s Frank from 2005 documenting the fact that Barney Frank in 2010 is a rank liar:
“This is a very important resolution, particularly at this time, because we have, I think, an excessive degree of concern right now about home ownership and its role in the economy.
Obviously, speculation is never a good thing. But those who argue that housing prices are now at the point of a bubble seem to be missing a very important point. Unlike previous examples, where substantial excessive inflation of prices later caused some problems, we are talking here about an entity, home ownership, homes, where there is not the degree of leverage that we have seen elsewhere.
This is not the dot-com situation. We had problems with people having invested in business plans for which there was no reality and people building fiber-optic cable for which there was no need. Homes that are occupied may see an ebb and flow in the price at a certain percentage level, but you will not see the collapse that you see when people talk about a bubble.
So those of us on our committee in particular will continue to push for home ownership.
– Barney Frank, 2005
[I found these quotes at US Politics Online].
You’re right, Barney. It wasn’t the Dot-com situation. It was a hundred times WORSE than the Dot-com situation, even given as bad as the Dot-com bubble was. And yeah, you sure were right when you said there wouldn’t be a collapse, weren’t you?
So first of all, we have Barney Frank – liberal Democrat par excellence – acknowledging that the bad policy that led to the mortgage market meltdown was actually a CLINTON policy that Bush merely continued (most likely because he knew he’d be called a “racist” the moment he ended a program that gave billions of dollars to minorities to buy homes they couldn’t afford).
Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
It’s beyond asinine that Democrats blame Bush for ruining the economy, and praise Clinton as having the mostest wonderfulest economy ever, when it was a Clinton program that ruined the Bush economy. But that’s the mainstream media narrative for you.
It’s ironic that Frank in hindsight so laughably compared the housing mortgage bubble that brought down the economy in 2008 to the Dot-com bubble that brought down the economy just as Clinton was leaving office. Because that’s TWO giant economy-killers that “Mister Wonderful Clinton” inflicted on George Bush. The Clinton-era Dot-com crash ultimately destroyed 78% of the Nasdaq composite. Clinton benefited with a huge market surge, and Bush paid with a huge market collapse that began taking place while the handprint on the Bible from Bush’s oath of office was still warm.
So Barney Frank reminds us that the destruction of the Bush economy was bookended by massive Clinton failures – the Dot-com bubble collapse in 2001 and the housing market bubble collapse in 2008. And Clinton was never blamed for either of them by the propagandist mainstream media.
The second thing you can notice is that Democrats like Barney Frank – who were so quick to pounce all over the mortgage meltdown and blame Bush for it – were not only the ones who created the problem, but were the ones who defended the problem.
What’s the Democrat-mainstream media-created narrative for why we had the 2008 collapse? Republicans refusing to regulate? Read what the New York Times said back in September 11, 2003:
WASHINGTON, Sept. 10— The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
So Bush WANTED to regulate, in contradiction to all the lies that you heard.
And who blocked those regulations? Omigosh, it was Barney Frank and his Democrats.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.
You would find if you bothered to look at the facts that Bush demanded reform and regulation of Fannie Mae and Freddie Mac SEVENTEEN TIMES during his presidency. And that Democrats refused to regulate the GSEs and even threatened filibusters against regulation. Not that the mainstream media is honest enough to report the truth.
You would find if you bothered to look at the facts that financial experts literally predicted that the Clinton-birthed Fannie and Freddie expansion would ultimately explode.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.
”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”
What do we have, even in the pages of the New York Slimes? A prediction that as soon as the economy cooled off, the mortgage market wold explode like a depth charge and the government would have to step in to prevent a catastrophe? From a Clinton program?
The same man – Peter Wallison – who had predicted the disaster from 1999 wrote a September 23, 2008 article in the Wall Street Journal entitled “Blame Fannie Mae and Congress For the Credit Mess.”
The New York Times acknowledged that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac “buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.”
And the Los Angeles Times on May 31, 1999 describes how this process turned into a bubble, as more begat more, and then more and more begat more and more and more:
Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more. . . .
In a nutshell, Fannie and Freddie, acting as Government sponsored enterprises, bought tens of millions of mortgages, and then repackaged them into huge mortgage-backed securities that giant private entities such as Bear Stearns, AIG and Lehman Brothers purchased. What made these securities particularly attractive to the private banking entities was that these securities were essentially being sold – and had the backing – of the United States government.
The Role of the GSEs is to provide liquidity and stability to the U.S. housing and mortgage markets. Step 1 Banks lend money to Households to purchase and refinance home mortgages Step 2 The GSEs purchase these mortgage from the banks Step 3 GSEs bundle the mortgages into mortgage-backed securities Step 4 GSEs sell mortgage-backed and debt securities to domestic and international capital investors Step 5 Investors pay GSEs for purchase of debt and securities Step 6 GSEs return funds to banks to lend out again for the issuance of new mortgage loans.
Now, an intelligent observer would note a conflict: the GSE’s role was to “provide stability,” and yet they were taking on “significantly more risk” in the final year of the Clinton presidency. What’s wrong with this picture?
The GSEs Fannie Mae and Freddie Mac were designed to bundle up the mortgages into mortgage backed securities and then sell them to the private market.
Fannie Mae is exempt from SEC [Securities and Exchange Commission] regulation. Which screams why Bush wanted to regulate them. This allowed Fannie Mae to bundle up mortgages, which were then rated AAA with no requirement to make clear what is in the bundle. Which screams why Bush wanted to regulate them.
This is what has allowed toxic instruments that have been sold across the world. It also created a situation where money institutions did not know and could not find out whether potential inter-bank business partners were holding these “boiled babies on their books, complete with a golden stamp on the wrapping,” rather than safe instruments. This then inclined banks to a natural caution, to be wary of lending good money to other banks against these ‘assets’. And thus banks refused to lend to one another.
Congress chartered Fannie and Freddie to provide access to home financing by maintaining liquidity in the secondary mortgage market. Today, almost half of all mortgages in the U.S. are owned or guaranteed by these GSEs. They are mammoth financial institutions with almost $1.5 Trillion of debt outstanding between them. With the fiscal challenges facing us today (deficits, entitlements, pensions and flood insurance), Congress must ask itself who would actually pay this debt if Fannie or Freddie could not?
An of course, they could not pay their debts. Fannie and Freddie basically went bankrupt and were taken over. And they took a whopping share of the biggest financial institutions down with them. Fannie is in the process of devouring nearly 400 billion dollars of bailout money from the American taxpayer. And now – GREAT GOOGLEY MOOGLEY – Obama is planning to funnel yet another $800 BILLION through the same Fannie and Freddie who already destroyed us once.
And thus you had a financial disaster created by one William Jefferson Clinton and one Democrat Party. And now a second act of economic destruction is being planned by Barack Obama.
The 2008 economic collapse that Democrats were elected to fix was itself created by Democrats who will now continue the very policies that created the disaster in the first place.
Democrats then demonized Bush for merely being there when the disaster happened. When they had created the mess, and when they had refused to allow Bush to do anything to prevent a Democrat-created disaster that he and other Republicans saw coming, but ultimately lacked the courage to stop.