Tip-Toeing Through the Tulips While the Housing Bubble Burst

Verum Serum

If any further proof is needed that Barney Frank has been completely incompetent in his oversight of the financial services industry, one need look no further than this past week. Just one day after Frank sent a memo to the White House urging the President to reject the attempt by Republicans to include GSE reform in any financial reform bill, Freddie Mac requested an additional government bailout of $10.6 billion to cover losses incurred in the first quarter. Only one day (!) after Frank defended the GSE’s, writing that “as Fannie and Freddie operate today, going forward, there is no loss”.

There is no loss.

Rep. Frank, of course, has a distinguished history of ineptitude when it comes to regulation of the housing industry, and his role in the financial market collapse. But when it comes to avoiding culpability, he is second to no one in his ability to spin a web of deceipt and reinvent history.

“It was Tom DeLay’s fault, he was in charge back then. Republicans were the ones pushing home ownership on the poor. I only advocated for rental housing.”

Lies, demonstrable lies.

But let’s not forget that Frank became chair of the House Financial Services Committee in January 2007, after the Democrats re-took congress. While the housing market decline had already begun, it would be well over a year before the financial crisis really began to accelerate. Fannie and Freddie, in fact, were not placed under federal control until September 2008.

Surely Barney Frank, with his vast intellect and experience, saw these problems developing and was preparing to do everything within his power to reign in the mortgage industry, and stem this crisis, as he assumed his new leadership role. Right?

The article continues at Verum Serum.

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