James Pethokoukis

Politics and policy from inside Washington

Fannie and Freddie and Barney

October 21, 2010

IBD‘s great Capital Hill blog makes a good point about F&F and the midterms:

That’s more bad news for Rep. Barney Frank, D-Mass., who’s in the political fight of his life with Republican Sean Bielat. The businessman and Marine reservist has laid into Frank, now chairman of the House Financial Services Committee, for his long support of Fannie and Fannie.

The government-sponsored enterprises were a major cause of the financial crisis. With their implicit — now explicit — taxpayer guarantees, Fannie and Freddie were able to expand and leverage far more than any truly private company could, and they used that heft to plow into subprime loans.

Back at a 2003 hearing, Frank pooh-poohed Republican and regulator concerns about the size and scope of Freddie and Fannie, saying he didn’t want to emphasize “safety and soundness.” Instead, he said, “I want to roll the dice a little bit more in this situation towards subsidized housing.”

Comments

Wooooooo!!! Bwarney!!!! The Tea Pwarty and the Maw-weens are cuming!!! They know awh awbout thos’ pweverted fwynancial dearwings you had wive Fwannie and Fweddie!!! Wun, you widdow Wunt. Wun!!!

Posted by ETEE | Report as abusive
 

Toss Frank out? Unlikely. But it’s heartening that people are finally starting to see that this Frank character may very well be at Ground Zero of this whole global financial meltdown. ‘Roll the dice’ indeed.

Posted by Gotthardbahn | Report as abusive
 

James, stop being a shill for the Republican right. There is no way that GSEs got a green light without the Republicans since they controlled both the House and Senate in 2003.

Let’s look at who benefited from the loans and also has political clout to make Congress do its bidding. Black single mothers living in poor sections of Boston? Or CEOs of Wall Street and hedge funds?

Read the legislation, James. There is not a single word that says provide a loan to someone who does not have the income to pay the interest costs.

Do the math. The vast, vast majority of bad loans and foreclosures have absolutely nothing to do with community investment legislation. It all was connected to stupid, irresponsible lending by well trained MBAs who wanted their annual bonus and to hell with a sound balance sheet.

Posted by Acetracy | Report as abusive
 

Acetracy,

How is it Dems can whine about Republicans blocking Obama’s agneda when they, the GOP are a minority, yet they cannot fathom how the Dems could block any reform to Fran and Fred?

did you ever hear of a super-majority?

Posted by contessa61 | Report as abusive
 

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