Barney Frank and Chuck Schumer’s Role the
Fannie Mae Failure
Below is an editorial that appeared in the New Hampshire Union Leader that talks about Barney Frank and Chuck Schumer and their roles in the failure of Fannie Mae and Freddie Mac.
Here is the editorial in it’s entirely:
One
month from tomorrow, U.S. Rep. Barney Frank, D-Mass., will be the
keynote speaker at the New Hampshire Democratic Party’s annual
Jefferson-Jackson dinner. It is a coveted and high-profile role
previously filled by such notables as Hillary Clinton and Al Gore. The
Democrats’ choice of House Financial Services Committee Chairman Barney
Frank is, therefore, very revealing.
The party
announced Frank as the keynote speaker on Sept. 11 — three days after
the U.S. government took control of Fannie Mae and Freddie Mac, costing
taxpayers untold billions. That takeover probably could have been
prevented had Frank not worked to thwart every attempt to limit the
risks taken on by the two government-sponsored mortgage giants.
For
16 years reformers in Congress have tried to improve oversight of
Fannie Mae and Freddie Mac and prevent the government-chartered
companies from putting the housing market and the whole economy at
risk. All that time, Frank was involved in efforts to block those
attempts, and in the last eight years he was a leader of those efforts.
In
2002, shortly before accounting irregularities were exposed at both
companies, Frank said, “I do not regard Fannie Mae and Freddie Mac as
problems,” The Wall Street Journal reported. After the Freddie Mac
accounting scandal in 2003, Frank said, “I do not think we are facing
any kind of a crisis.”
But there was a crisis,
thanks in large part to Frank, Sen. Charles Schumer and others on the
leash of these companies. In Congress, they made sure there was no
additional oversight, no additional limit on executive behavior and
compensation, and no further restraint on the growth of the companies’
mortgage-backed-securities portfolios, among other changes.
(All of these needed reforms, by the way, have been championed for years by Sen. John Sununu.)
In
fact, Frank & Co. made matters worse by pushing Fannie Mae and
Freddie Mac to take on greater risk. They wanted more loans to people
who might not qualify for traditional bank financing. And, as The Wall
Street Journal has pointed out, Frank “pressured regulators to ease up
on their capital requirements — which now means taxpayers will have to
make up that capital shortfall.”
Even now, after
the government took the companies over (which Frank repeatedly said
over the years was not a possibility), Frank opposes limits on the
amount of money they can risk on mortgage backed securities — the one
reform that might have done the most to prevent the current meltdown
and probably would do the most to keep it from happening again.
Barney
Frank is the very symbol of Washington’s deliberate refusal to prevent
the collapse — the predicted collapse — of Fannie Mae and Freddie Mac.
And this is the guy the New Hampshire Democratic Party showcases at its
most prestigious annual event. That ought to tell you a lot right there.
Besides their total ignorance about the troubles that Fannie Mae and
Freddie Mac were headed towards is the fact that these two men, and
other Democrats, helped to make the problem worse.
In
fact, Frank & Co. made matters worse by pushing Fannie Mae and
Freddie Mac to take on greater risk. They wanted more loans to people
who might not qualify for traditional bank financing. And, as The Wall
Street Journal has pointed out, Frank “pressured regulators to ease up
on their capital requirements
These companies were
forced to loan money to people who couldn’t afford it in the interest
of “being fair.” Rules were relaxed and money was loaned and
predictably low income families defaulted on loans that they never had
any business getting in the first place and now you and I have to pay
for it.
Another liberal policy and another liberal failure. And now we must all pay for it. But hell, they meant well.
Check out pictures of Barney Frank:
