The “Frank” of the Dodd-Frank Bill Decides Not to Seek Re-election
November 28, 2011
The thirty year long Liberal reign of the Massachusetts lawmaker behind the economic financial crisis will soon be over. Perhaps the housing market will have a chance at recovering, the lending market will have a chance at being cleaned, and the taxpayer will have a chance at ending the bailouts and bonuses for Fannie and Freddie.
Rep. Barney Frank (D-MA) announced he would NOT seek reelection in 2012 because of redistricting:
“The Newton Democrat faced the prospect of a bruising reelection campaign next year after surviving a brutal battle in 2010. He also would have run in an altered district that retained his Newton stronghold but encompassed more conservative towns like Walpole.”
Be sure to thank the 2010 Census because Frank’s decision to cash out is the best chance we have at ending the Fannie Mae and Freddie Mac ails that played a large part in nearly collapsing our economy.
Almost eight years ago, the Bush administration tried to reform the bad lending practices of Fannie Mae and Freddie Mac. Barney Frank was the ranking Democrat on the Financial Services Committee at the time and he opposed the Bush reforms saying:
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis.''
He has argued that their financial foot was sound for years. He has also pressured and blocked all attempts to fix these government sponsored entities headed for bankruptcy approximately six times over the course of eight years.
He was responsible for encouraging companies to guarantee more housing loans to those who could not afford to be in homes at all. He was also successful in getting Fannie and Freddie to guarantee larger mortgages to those that could not afford it. The Wall Street Journal reported in 2008 that Frank’s biggest payoff was the “affordable housing trust fund” coincidentally included in the Wall Street Reform bill, known as Dodd-Frank.
“This fund siphons off a portion of Fannie and Freddie profits -- as much as $500 million a year each -- to a fund that politicians can then disburse to their favorite special interests.
This is also why Mr. Frank won't tolerate cutting the companies' MBS portfolios. He knows those portfolios (bought with debt borrowed at taxpayer-subsidized rates) were a main source of Fannie's profits before the housing crash, and he figures that once this crisis passes they can do it again. And this time, his fund will get part of the loot.”
“Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s.
So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions.
Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie."
The Wall Street Journal also pointed out in 2008 that Frank opposed a provision from the Treasury in his own Wall Street reform bill that reduced the size of high-risk mortgage backed securities portfolios. This is the reason that you hear critics of Dodd-Frank call for Frank’s firing – he opposed the reforms that caused these GSE’s to go bankrupt in the first place.
Thanks to Rep. Barney Frank, you owe the government $200 billion for his mishandling and corruption with Fannie and Freddie throughout the 1990s. When politicians direct markets by picking winners and losers, the real losers are the taxpayers. Good Riddance Barney Frank.
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