Soon-to-be former Congressman Barney Frank continues to try to defend his record on Fannie and Freddie by distorting, or simply reversing, the truth. Here he is in the TheAtlantic.com today on his history as he hopes we will remember it:
In 2004, the administration of President George W. Bush began a conscious plan of trying to increase levels of homeownership as part of its ‘Ownership Society,’ raising affordable housing targets for Fannie and Freddie. I opposed this policy because I thought people could end up with mortgages they could not afford.
A pretty categorical statement, right? Replete with context that makes it sound as though it actually happened. Unfortunately for him, there’s a written record—a letter to President Bush, dated June 28, 2004, that he authored for 76 colleagues, including minority leader Nancy Pelosi:
We write as members of the House of Representatives who continually press the GSEs to do more in affordable housing. Until recently, we have been disappointed that the administration has not been more supportive of our efforts to press the GSEs to do more. We have been concerned that the administration’s legislative proposal regarding the GSEs would weaken affordable housing performance by the GSEs, by emphasizing only safety and soundness. While the GSEs’ affordable housing mission is not in any way incompatible with their safety and soundness, an exclusive focus on safety and soundness is likely to come, in practice, at the expense of affordable housing.
We have been led to conclude that the administration does not appreciate the importance of the GSE’s affordable housing mission, as evidenced by its refusal to work with the House and Senate on this important legislation. It now appears that, because Congress has not been willing to jeopardize the GSE’s mission, the administration has turned to attacking the GSEs publicly. We are very concerned that the administration would work to foster negative opinions in the financial markets regarding the GSEs, raising their cost of financing. If the intent is to get prohousing members of Congress to weaken their support of the GSEs’ mission, it is a mistaken strategy.
Our position is not based on institutional loyalty, but on concern for the GSE’s affordable housing function. We appeal to you to agree to work on legislative proposals that foster sound oversight and vigorous affordable housing efforts instead of mounting assaults in the press. We also ask you to support our efforts to push the GSEs to do more affordable housing.
If Barney Frank has any credibility after this, it will only be with those who—for ideological reasons—support him in his efforts to distance himself from the government’s affordable housing requirements, which were so destructive to Fannie and Freddie and the financial system as a whole.
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To John Waddell:
The role of banks and mortgage brokers is largely determined by the government. Barney Frank was obviously a major government player and deserves a good deal of attention.
It would be incredibly altruistic for builders and realtors to cease their activities—in effect, they would have to stop doing business. Finally, expecting naive families to resist the lure of cheap money is not realistic.
The government is mostly at fault here. The Democrats pushed “affordable housing” as a reckless policy to gain popular support and most of the Republicans lacked the nerve to stand up to this quasi-criminal vote buying scheme.
Peter Davis
Toronto, Canada
Peter,
A little surprised that someone with an Ontario address has such a keen understanding of the situation here in the US. Bush clearly knew that the agenda of “affordable housing” had many faults but didn’t stop it. Another problem is the liberal press in this country has it’s agenda also (reporting facts isn’t on there anywhere). The press was already subtly planting the seed that the Republican Party was up to it’s usual “hold the man down” antics to block the affordable housing legislation. In other words Damned if ya do, damned if ya don’t (obviously you realize that political popularity will always outweigh the US Constitution or the morally correct thing to do). Unfortunately in this country people are by enlarge lazy; much easier to just believe what the guy/gal in the black box says rather than do your own homework. We feel that we should be entitled to certain things because, well, we’re American’s right? Last but not least, we have become the world experts in blaming someone, else while absolving ourselves of any culpability whatsoever.
John,
You fool. If Barney had been a Republican, the Dems would not be happy until he resigned or was perp walked to prison. The man is a Socialist and deserves to be in prison. As Margaret Thatcher stated, Socialism works until you run out of the other persons money. Well he proved her point. As far as I am concerned the man should be brought before a special prosecutor before he is allowed to leave office and account for his crimes against the people of this nation, and then serve his next term in jail.
Please stop with the Barney Frank straw-man obsession which discredits the Republican party’s prospects with its endless idealogue nonsense. Sure, Barney had a role. But we all did. Banks, mortgage brokers, builders, realtors and overreaching homeowners all benefited.
Fox news and AEI “talking heads” obsession with Barney is akin to an alcoholics’ blaming society for legal booze. Stop already… And I’m a GOPer – for now.