Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, said Friday that Fannie Mae, Freddie Mac Should Be Eliminated. The Obama administration pledged to cover unlimited losses through 2012 for both companies. http://finance.yahoo.com/news/Rep-Frank-Abolish-Fannie-Mae-apf-2556602798.html?x=0
Let me tell you, Barney Frank may be a crappy politician in that he is far too liberal for me, but the man is without a doubt a defender of civil liberties (although an incredibly elitist prick off camera) saying ""In a free society a large degree of human activity is none of the government's business." I also demand a removal of the image of Barney smoking, unless you'll put one up of Bush doing lines of coke, or Bush's grandfather speaking to a general about sending 500,000 troops to march on Washington and stage a coup. How DARE you demonize the use of a plant, less harmful than tobacco. Fannie Mae, Freddie Mac, AND Sallie Mae (the college student aid program) all definitely need to be shut down. Not at all solely Barney's fault; he OPPOSED Bush's decision to alter the oversight of those programs from Congress and the department for housing and urban development to the TREASURY, that move alone should have indicated that Bush had no idea of what the Treasury or Housing Departments do...And Bush pressured the entities into pushing more subprime loans... If you're going to point the finger at one person, point them at the others.
1. Barney Frank's gay husband was an executive at Fannie Mae at the same time Barney was relaxing Fannie Mae lending restrictions. http://www.foxnews.com/story/0,2933,432501,00.html 2. Barney Frank in 2003 opposed President Bush’s efforts to stop Fannie Mae and Freddie Mac reckless lending practices. 3. Barney Frank says Freddie Mac/Fannie Mae fundamentally sound House Financial Services Committee hearing, Sept. 10, 2003: Rep. Barney Frank (D., Mass.): I worry, frankly, that there's a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . . . http://online.wsj.com/article/SB122290574391296381.html
Bush wanted to move the oversight from Congress to the Treasury. The Republican congrolled Congress shot Bush's plan down. There wasn't much of an effort by Bush and Republicans to prevent the crisis from blowing up. As I said in my "FACT:" thread, the Republicans looked at the potential outcome of pulling the plug on those loans and decided not to since they would be blamed for harming home values. And they were indeed financially sound at that time. The key words in his quote were that they could withstand some of the disaster scenarios. This quote was in relation to what I said above. Nobody wanted to see oversight moved to the Treasury.
The Democrats led by Barney Frank had an agenda to push the banks to make loans to people that couldn't afford it. Freddie/Fannie are just one part of the crisis that started with The Community Reinvestment Act (CRA). Rep. Barney Frank (D., Mass), for example, now the chair of the House Financial Services Committee, openly described the "arrangement" with the GSEs at a committee hearing on GSE reform in 2003: "Fannie Mae and Freddie Mac have played a very useful role in helping to make housing more affordable . . . a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing." The hint to Fannie and Freddie was obvious: Concentrate on affordable housing and, despite your problems, your congressional support is secure. The first head of Mr. Obama's vice-presidential search committee, Jim Johnson, a former chairman of Fannie Mae, was the one who announced Fannie's original affordable-housing program in 1991 -- just as Congress was taking up the first GSE regulatory legislation. In 2005, the Senate Banking Committee, then under Republican control, adopted a strong reform bill, introduced by Republican Sens. Elizabeth Dole, John Sununu and Chuck Hagel, and supported by then chairman Richard Shelby. The bill prohibited the GSEs from holding portfolios, and gave their regulator prudential authority (such as setting capital requirements) roughly equivalent to a bank regulator. In light of the current financial crisis, this bill was probably the most important piece of financial regulation before Congress in 2005 and 2006. All the Republicans on the Committee supported the bill, and all the Democrats voted against it. http://online.wsj.com/article/SB122212948811465427.html