Skip to comments.Letter mixes fantasy with distortion of record
Posted on 08/02/2010 8:46:12 PM PDT by kalp
I do not ordinarily respond to politically generated letters in election season, but John Costello's recent letter made an attack that was both inappropriately personal and seriously misleading.
Mr. Costello repeats the right-wing party line that it was the Democrats who were responsible for lending to people who shouldn't have received loans. In fact, the Republicans controlled Congress 1995-2006, and it was they who refused to do anything legislatively about Fannie Mae or Freddie Mac, and who blocked our efforts to adopt legislation banning subprime lending. It is true that in 2003 I did not think there was a problem with Fannie Mae and Freddie Mac, but by 2005 I had changed my view, based on the facts, and in 2007, when I became chairman, I put through legislation that gave the Bush administration the power to put these entities into conservatorship. They have since been run in very different fashions because of that bill.
What is especially troubling about Mr. Costello's letter is that he is apparently unable to discuss these issues on their merits but puts it in personal terms - and, personal terms that severely misrepresent the facts.
Mr. Costello refers to my former partner, Herb Moses, as "Fannie's assistant director for product initiatives." The implication is that Mr. Moses was a high-level employee. In fact, Mr. Moses was a recent graduate of business school, and was one of dozens of assistant directors - a title Fannie gave to entry-level people in that regard. I was myself at the time a fairly low-level member of the banking committee.
So not only does Mr. Costello appear to blame me for the fact that the Republicans passed no legislation during their 12 years in power to deal with subprime lending or Fannie and Freddie, he repeats a very misleading formulation to imply I was somehow influenced by the fact that I had a relationship with a high-level employee of Fannie Mae, when that is not at all the case.
The statement by Mr. Costello that the Department of Housing and Urban Development, in 1994, "tried to impose a new regulation on Fannie Mae but was blocked by Frank," is a total fantasy. In 1995, the Republicans were in power and controlled the Congress for the next 12 years. If anybody blocked Mr. Clinton's effort, it was the Republicans who were in control of Congress, not I who was then a member of the Democratic minority. Barney Frank, Washington, D.C.
THE WRITER is a Democratic congressman from Newton who represents several Sun Chronicle area towns.
I am going to be very interested in the responses on this thread.
NEW YORK TIMES, Sept. 11, 2003:
‘’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.’’
But in fact 'rats didn't need control of Congress to cause the trouble they have - much of the damage they did was administrative and extra-legislative - like threatening lender-banks with additional audits and fees if they didn't produce lending to minorities, and HUD secretaries Cisneros and Cuomo prodding the FM's to increase the number of sub-prime mortgages they bought to over 50% of their portfolios so those lenders would have a place to offload the shaky loans they made - I don't know exactly what the original letter said, but the point that the 'rats are totally responsible for the recent financial collapse is right on........
How about the 1992 Act which changed the charters and required Fannie and Freddie to concentrate on low income lending ? Who was in charge of congress then ???
Since 2007, the Democrats have controlled Congress. Yet, it's always the Republicans who are blocking the Democrat's effort to pass one bill or another.
I suppose it would be too much to ask for the state-run media to point out that the minority party has the ability to erect a significant barrier to passing legislation without their cooperation. Our legislative branch was set up that way on purpose.
This is why you should NEVER compromise with evil. The evil will always turn it around and put the blame on you.
I was also able to find the letters he referred to:
“US rep slow to see trouble brewing”
“Salute congressman for courageous stand”
Good thing Barney had the balls to come out defending his honor in my local(liberal) paper.
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