The Third Wave (Barney Frank on risk, and Congress' response to the financial crisis)

Directorship Magazine ^ | 2/1/2009 | Directorship

[steel_resolve]

Frank Speaking:
A common view of Congress members is that we need to be more financially wise. But I don’t think a lack of wisdom or financial expertise on the part of Congress caused the problem...I don’t know of a bill that said you are now entitled to money that you don’t have to pay back. I think the problem has been that we [the legislature] have lagged too much in responding and we don’t always respond well.

Interviewer:"So, how did the crisis happen?"

Frank: First, the rating agencies substantially overrated everything and now substantially underrate a lot of things. We [also] had quantitative models to protect us. Those were the astrophysicists and the mathematicians, and I have come to believe that this whole discipline was somewhere between alchemy and astrology in its scientific inexactitude. It’s clear that they did not work, probably because it’s hard to model when you have no experience.

Interviewer:"What about moving forward?"

The way to prevent bailouts in the future is to substantially diminish the number of entities that will become indebted with so little ability to pay their debt. Remember, too, that the people who are being bailed out are not the entities themselves but the creditors of those entities. The shareholders of Bear Stearns, Lehman Brothers, and Fannie [Mae] and Freddie [Mac] have not done very well.

Finally, you will see a Democratic initiative in trying to increase the social safety net, because until you alleviate the sense that the average American is unfairly being put upon, then you will not see things going forward as they should.

[steel_resolve]

Perhaps the most bizarre part of this whole article is not that Frank forgot to mention the part he had to play in the collapse of the housing market, but that the fact that Directorship Magazine is owned by one Jeffrey Cunningham - an individual that once sat (and possibly continues to sit) on the board of Countrywide Financial.

[DugwayDuke]

“Frank: First, ... Those were the astrophysicists and the mathematicians, and I have come to believe that this whole discipline was somewhere between alchemy and astrology in its scientific inexactitude. It’s clear that they did not work, probably because it’s hard to model when you have no experience.”

So, Barney, what do you think about those ‘global warming’ models?

[Ev Reeman]

The lights are on but nobody’s home. The Congress of the US is not only out to lunch, they just don’t get it and I don’t think they even care to get it. They are all either morons or traitors. Throw em all out!

[Ev Reeman]

The lights are on but nobody’s home. The Congress of the US is not only out to lunch, they just don’t get it and I don’t think they even care to get it. They are all either morons or traitors. Throw em all out!

[freekitty]

Get rid of Frank, Dodd, Reid, Pelosi, the entire Democratic congress and Obama and Biden.

[TheConservativeParty]

To vent your opinions to Bawney, here is his DC address

Congressman Barney Frank
2252 Rayburn Building
Washington, D.C. 20515

Sent him my first love letter today in the US Mail! Very theraputic!