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.
“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?”
How on earth does getting more loans help clean up the subprime mess? The loans are the problem! Somebody get this guy a book!
Sadly, for us, the good people of Newton will continue to elect him.
and I want him to go to JAIL!!!!
The NERVE of Barney Frank and CHRIS DODD....the THIEVES that OVERSAW this mess, now sit in the cat-bird’s seat......they should be so ASHAMED they should RESIGN!
A trillion here. A trillion there.
Lets spend a trillion everywhere. I cant wait til they start talking in quadrillions of dollars.
Coming soon to your neighborhood.
There are NO GOOD people that elect Barney Frank.....they elect him because he’s a SODOMIZER!
I could see the lefties pushing, and getting all sorts of things.
A moritorium on new building, until the oversupply is sucked up.
They’ll say it will be cheaper, and protect the children and the communities if the Fed’s just buy like half the value of these morgages. They’ll explain that temporary housing, dislocation will cost more.
And, so forth. Basically any argument works. After all these are lawyers that will pound the table.
Meanwhile, limpwrist RINO’s will titter and do nothing and get rolled by white elite guilt. The Bushs and Mitt come to mind.
Frankie and Freddie were sweethearts...:<(
They will start talking about quadrillions, but quadrillions don’t buy what they used to. Why, I remember my grandpa telling us how you could buy a whole army for a trillion dollars. Now a trillion can’t even buy a couple banks.
I may start an oversize wallet buisiness. It worked in golf clubs. I wonder what kine of bussiness would be a money maker in the new communist United States?
No the RINOS will beg for favors just like in Atlas Shrugged. Did you hear about Paulson begging on his knees to Pelosi.
And still the stupid American voters and most of the marxist MSM are blaming the Republicans for this mess, as reflected is the rising poll numbers for The Obamanation. Well, I’ve just about had it. Most of these idiots will be the first ones to feel the pain when the donk’s implemennt even more Marxist policies. Screw ‘em, they deserve what they are going to get with their moronic thoughtless voting. Me and mine will weather the storm. Most of them won’t.
And this in the Boston Herald? Perhaps this might gain some traction in the mainstream media after all. Maybe.
If we really are going communist, send your kids to interrogation school.
Dems are never ashamed. What would cause a moral person shame.
The libs/dems wear as badge of honor.
Yes..Lets replace greenbacks with OBAMABUCKS> You just print your own.
Don’t count on it. This is one little tiny spot of light in the black pit of the donk’s fully marxist propaganda machine aka the MSM.
Not we. They. I will NEVER go communist.
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