Commentary Magazine


Let’s Be Frank

My colleague Daniel Halper passes on this unintentionally hysterical interview by the Tufts Daily of Barney Frank. Of particular interest is his answer in response to a question about why government policy pushing “affordable housing” wasn’t at the root of the housing meltdown:

No, because the government did not force banks to lend money to high-risk people, but rather to poorer neighborhoods. The Community Reinvestment Act [CRA] is the legislation in question. The act only applies to banks. The loans that caused the trouble were on a whole not made by banks. They were made by mortgage finance companies. … Over the course of the last 30 years, new entities rose up. Mortgage finance companies and others were unregulated, and they made loans. If only entities covered by the CRA made loans, we would not have the subprime problem.

Hmmm. You don’t suppose that high-risk borrowers live in those poor neighborhoods do you? And it’s fine to say that banks made only a fraction of subprime loans. But Freddie Mac and Fannie Mae, under his regulatory watch, went whole-hog into this business. Those were the ones who “rose up” to guarantee and spawn the subprime frenzy.

But isn’t it a problem that he and others took gobs of money from Freddie Mac and Fannie Mae? Oh no! Everyone does it:

Everyone donates money to congressmen. Labor unions give you money, grocery stores give you money, so why would you single out Fannie Mae and Freddie Mac?

Those millions taken from trial lawyers probably don’t have anything to do with the failure to pass tort reform. I’m sure the hundreds of millions in Big Labor donations don’t have anything to do with card check legislation. And certainly, Frank and his ilk — including the Friend of Angelo Chris Dodd — weren’t influenced by all that campaign cash to look the other way when Freddie and Fannie went awry. It all works out perfectly fine. Really.

And what are his priorities?

Well, pulling out from Iraq and simultaneously producing an economic stimulus plan for the recession are the most essential. Those two tasks alone are going to be difficult. In the short term, spend to simulate the economy over the next year and half and make that up by getting out of Iraq. The war in Iraq has cost $600 billion.

Ah, pay for the stimulus,which is an immediate bill of, say, $700B, by a gradual phase down of U.S. troops in Iraq, while also, according to the President-elect, building up forces in Afghanistan. Yeah, that’s the ticket. Can’t wait to see the accounting on that one.

If this all sounds out of touch and downright silly, get used to it. There’s plenty more where that came from.