Saturday, January 10, 2009

Hey Barney Frank, Thanks for the Housing Crisis.



No doubt there were various factors at work that caused the mortgage crisis. Democrats and their friends in the media like to blame the Reagan-era deregulation and many conservative commentators wish to blame the Carter-era Community Reinvestment Act, while others point to other causes.

One undeniable factor, if not the primary factor, was the irresponsible practices of Fannie Mae and Freddy Mac. Fannie and Freddie do not make loans of course but purchase the paper of the mortgage companies that do make the loans.

In the 1990’s, encouraged by the Clinton administration as a means of advancing homeownership, Fannie Mae and Freddie Mac started buying sub prime loans. Previously there was a much smaller market for sub prime mortgages, but with Fannie and Freddie buying the paper the availability of sub prime loans skyrocketed. With time-tested lending practices out the window, these two institutions ended up controlling 90% of the secondary market for mortgages. Those within the organizations who raised objections to the irresponsible lending being encouraged by Fannie and Freddie were overruled and eased out.

Fannie and Freddy began hiring Democratic operatives as CEO’s and upper management.
At the same time, Fannie and Freddie began making huge contributors to Congress, spending millions to influence votes. While some Republicans also received financial contributions from the two institutions, most of the money went to Democrats. Top recipients of those campaign contributions were Barney Frank and Chris Dodd, the Chairmen of the Committees that should have been providing over site of the two financial giants. Barack Obama and Hillary Clinton were also among the top receipts of Fannie and Freddy campaign contributions.

Wall Street investors liked the new arrangement and the easy money. Democrats liked the votes they could garner by being the party that advanced homeownership and they liked the dependable source of campaign contributions. This was the “crony capitalism” that led to the crisis.

By the early part of this decade it became clear that Fannie and Freddie were advancing a market in risky loans. If these practices continued an economic meltdown was inevitable. In 2004 Fannie Mae was caught in an accounting scandal overstating their earning and their financial stability. Congress conducted dozens of hearing and Democrats defended Fannie Mae and denied that a problem existed. (See above video.)

Principled Republicans, let by John McCain, called for the reform of Fanny Mae and Freddy Mac and President Bush proposed a bill to tighten regulation of the institutions. (For a record of the Bush administrations efforts to rein in Fannie Mae see Just the Facts: The Administration's Unheeded Warnings About the Systemic Risk Posed by the GSEs)

The bill to tighten regulation over the Government Sponsored Enterprises (Fannie and Freddie) was introduced in Congress in January 2005 but Democrats blocked it. If one single person gets credit for blocking reform that could have averted the mortgage crisis it has to be Barney Frank. (See, Fannie Mae’s Patron Saint)

While there are other factors at play that led to the economic meltdown, the bulk of the blame must be laid at the feet of Congressional Democrats who turned a blind eye to what was going on, benefited from it, and blocked reform that could have averted it.

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19 comments:

  1. Unbelievable. Talk about sore losers, you guys really need to suck it up.

    And hey, why not show us who voted for all the dereg nonsense by name. But that would put a crimp in your "blame the Dems" bs, so I feel pretty certain that you won't be doing that.

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  2. Barney Frank is a big, fat doofus.

    And the constituents who continue to vote for him are stupid too.

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  3. So you say all are to blame but youe headline blames a Dem and then your end paragrpah blames a Dem. Get a grip, old man.

    Guilt falls upon them all. Who was at the helm? GWB!

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  4. While Bush did push for reform, that didn't stop him from taking credit for the record level of home ownership in the country during the 2002 and 2004 State of the Union addresses. In many ways, Freddie and Fannie became the 800 lb gorilla in the room that everyone wanted to ignore.

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  5. As usual Liberals' only defense when their side gets caught doing something detrimental to the country is BDS (Bush Derangement Syndrome). Well, they can deflect as much as possible with the usual trope but the facts are on tape. So you all need to suck it up.

    It's well documented that Barney Frank publicly argued for an increase in the size of Fannie and Freddie portfolio's (combined $1.4 trillion) right up to the day they were bailed out. In fact, he STILL opposes Treasury's planned reduction in the size of the portfolios starting in 2010. Now, if that isn't irresponsible and outright miscreant, then Dems don't know that their heads are up their buttocks yet. So get a grip.

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  6. @ VH.....so does Barney Frank represent all dems, and is he solely responsible in your opinion?

    How about McCain and all his continuous DEREG NONSENSE? is he to blame? And then you have the rest of them who followed right along, like the tools that they are.

    Ya know, have the courage to own your idiots. Bush is a complete dumbass, and you people of the righwing elected him. Because of him, and by extension, YOU, this country is in more trouble than it's ever been.

    I have a suggestion for you and any other Repub who refuses to acknowledge the truth. STFU and let Obama fix the mess that YOUR idiot made without making his job more freaking difficult than it's already going to be.

    As tightly as some of you wrap yourselves in the flag metaphorically, you truly are the least patriotic of citzens as your only real loyalty is to a party, not our country.

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  7. I blame it on a lack of integrity of the American people. There are many of us who have done little to nothing to reign in our "representatives". How many, even reading today, have written a letter to your representatives regarding these issues? How about in the last ten years?

    We don't hold theives accountable for theivery. We don't hold our attorney general's feet to the fire and require that he tells the truth. We don't see that our veterans, our homeless, our hungry and infirmed are being cared for as we (as a nation) violently and selfishly act out across the planet.

    Do I blame Republicans? You bet! Do I blame Democrats? You bet! Do I blame the American public for watching their favorite TV programs instead of actually doing something? Most of all!!!

    Who is with me? Who is writing a letter? Who is making a sign? Who is going to take some responsibility?

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  8. @Nicole…you should have the courage to own up to your idiots too. And that includes Mr. Barney Frank as the video succinctly illustrates---He was, and still is, a major cause of the current housing AND financial debacle. Liberals love to think that they are for the little guy. But instead of helping the poor, Mr. Frank (one of the most liberal members of Congress) was enriching Jim Johnson, Frank Raines, Angelo Mozilo and Wall Street. These are the facts. Trying to deflect blame by claiming that Frank doesn’t represent all Democrats or Liberals is quite lame. When Mr. Frank tells noble lies about how his side is going to do something grand for the poor, liberals get all warm and fuzzy. Expose his dirty dealings, and suddenly there is a lot back tracking and BDS (Bush Derangement Syndrome): Pathetic.

    “let Obama fix the mess that YOUR idiot made without making his job more freaking difficult than it's already going to be.”

    You know, it’s really funny how liberals all of a sudden want bipartisanship after eight years of some of the nastiest, vicious, conspiratorial, and egregious discord since Woodrow Wilson. Obama doesn’t deserve special treatment.

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  9. DEMS AND MORE DEMS ARE THE STUMBLING BLOCK TO THIS NATION AND BARNEY FRANK-IN-FAG IS THE FATTEST STUBBLING BLOCK OF ALL

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  10. HEY NICOLE LIKE THE REST OF THE DEMS YOU NEED TO GET YOUR HEAD OUT OF YOUR A**

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  11. THE LIBERALS AKA LIBERAL RETARDS ARE BY FAR THE NASTIEST BUNCH OF PIGS IN THIS NATION.. I DON'T KNOW WHY THEY WON'T GO LIVE IN THE SOCIALIST NATIONS ERR LIKE MAYBE ' RUSSIA '.....BECAUSE THOSE TURD HEADS KNOW THEY WON'T BE ABLE TO SPEAK AS FREELY AS AMERICA ALLOWS THEM....I CAN'T STAND A STUPID LIBERAL ESPECIALLY ONE WHO COMPLAINS THE MOST!!!!!!!!!!!!!

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  12. Dear Anonymous(s),

    It's obvious why you choose to be anonymous.

    ReplyDelete
  13. Dear Anonymous(s),

    It's obvious why you choose to be anonymous.

    ReplyDelete
  14. This is such a fun blog to follow.

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  15. Why did you blame the Obama administrations in Housing crisis? You must blame people who voted Obama. Well, it's not Democrats nor Obama's fault. It's just happened that before he seat as President, the economic crisis are already there. His only fault is, maybe his not giving fast solution about the problem nor his thinking for the long term solution which we are hoping and still waiting until now.

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  16. Why do you blame the Obama administration for the housing crisis? Blame the people who voted for Obama. Well, it's really not the Democrats nor Obama's fault. It just so happened that before he took his seat as President, the economic crisis was already there. Obama's problem is that he hasn't offered a quick solution to the problem at hand nor is he thinking about a long term solution which we are still waiting for

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  17. The "right to rent" concept has been floating around this past few years. Under this proposal, foreclosed homeowners will be allowed to remain in their house as renters, paying the market rent, for a specific period of time following a foreclosure. While several bills have been introduced in Congress, President Obama may now have a new opportunity to take the lead on this issue.

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  18. Industry insiders, observers, and analysts may have their say about Campbell’s three-year tenure now that he’s chosen this moment–before the destiny of both the company and the home building industry itself is clear–to exit. As for me, there should be an action taken before it get worst.

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