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Finally, Barney Frank Confesses

You must remember the denials, the hissy fits, and the outrage. In the wake of the 2008 financial meltdown, Democrats — and Barney Frank specifically — screamed that it was outrageous to hold them responsible for promoting home ownership to everyone and anyone, regardless of creditworthiness, or for their cozy relationship with Fannie Mae and Freddie Mac. Well, getting a jump on his Day of Atonement, Barney Frank has decided to come clean:

For years, Frank was a staunch supporter of Fannie Mae and Freddie Mac, the giant government housing agencies that played such an enormous role in the financial meltdown that thrust the economy into the Great Recession. But in a recent CNBC interview, Frank told me that he was ready to say goodbye to Fannie and Freddie.

“I hope by next year we’ll have abolished Fannie and Freddie,” he said. Remarkable. And he went on to say that “it was a great mistake to push lower-income people into housing they couldn’t afford and couldn’t really handle once they had it.” He then added, “I had been too sanguine about Fannie and Freddie.”

When I asked Frank about a long-term phase-out plan that would shrink Fannie and Freddie portfolios and mortgage-purchase limits, and merge the agencies into the Federal Housing Administration (FHA) for a separate low-income program that would get government out of middle-income housing subsidies, he replied: “Larry, that, I think, is exactly what we should be doing.”

Hmm. You mean it wasn’t all George W. Bush’s fault? You mean conservative economists and pundits who pointed to the role of Democrats and their Freddie and Fannie clients had it right? You mean the White House meme – that a vote for Republicans (who unsuccessfully tried to rein in Freddie and Fannie) would be reckless — is hooey?

Now imagine if George Bush came forward to say, “I was wrong on Iraq.” Do you think, just maybe, that would be front-page headlines? Just asking.



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