Filed under: Capitalism, Democrat Corruption, Domestic Policy, Economy, Law, Politics, Progressivism | Tags: Congressman Barney Frank, Fannie Mae & Freddie Mac, Financial Reform Fail
Congressman Barney Frank (D-MA) announced today that he is stepping down. A tireless advocate for progressive causes, and a long time bane of the GOP. He is the ranking member on the powerful financial services committee, co-author of the unfortunate financial regulation bill — the Dodd-Frank Bill. It is his ties to the mortgage giants Fannie Mae and Freddie Mac that are his most notable mistakes. President Bush called for reform of these two agencies 17 times in 2008 alone.
Fannie and Freddie bought bad loans, guaranteed them, pressured bond-rating agencies, and ignored experience, restraint and regulation. The massive losses of $2 trillion killed the economy. Barney Frank’s response:
These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.
The administration warned about the growing financial problems at these agencies and offered plans to reduce the risk in 2001, 2002, 2003 ( a banner year-Fannie had to declare a $1.2 billion accounting error), 2004, 2005, 2006, 2007 and 2008, and the problems grew larger. The Democrat controlled Congress fiercely resisted any change.
Barney Frank and Chris Dodd drew up a financial reform bill that does not address the problems of Fannie and Freddie, nor does it address the enormous problem of “too big to fail.” No meaningful regulatory reforms, no strong consumer protections and doesn’t address the Community Reinvestment Act that began the whole thing.
The departure of Mr. Frank does not solve much of anything. The ranking member of the powerful financial services committee will be Maxine Waters (D-CA), who asked the heads of Goldman Sachs and State Street questions about how these investment banks set the limits on their (nonexistent) consumer credit cards. She asked Ken Lewis, CEO of Bank of America, a question about “offshore loss mitigation caps” a term no one had ever heard of before. But her most notable moment was captured on YouTube:
There you go. This congresswoman believes that the government has the right to simply seize control of a private industry. Not promising.
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