To Be Frank

Frannie, Freddie, I got an offer ‘ya can’t refuse, see…

Barney Frank decides his 2012 re-election is another entity that’s too big to fail. 

 The coverage of a politician’s announcement of their retirement, not unlike the coverage of their eventual passing, usually reads as an enduring time-capsule.  From their fame to their foibles, a few key sentences will forever define a politician who has left the political limelight. 

Retiring 16-term liberal Massachusetts Democrat Barney Frank had plenty of fame (fierce conservative critic; first openly gay member of Congress) and foibles (a prostitution scandal that nearly ended his career), all of which were extensively covered by the press as he announced that due in part to redistricting, he was choosing to forgo another run.  Yet to read or listen to the mainstream press’ coverage of Frank’s farewell tour, nary a word was spoken or written about what should be Frank’s infamous, enduring legacy:

 ‘These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

 

 While the media’s hagiography of Frank dominated the afternoon news cycle (CNN called Frank “a teacher” of Congress), others noted that “Fannie, Freddie Lose A Friend In Frank” as Investors Business Daily‘s headline remarked. 

His role as the chairman of the House Financial Services Committee during the Great Recession would have defined Frank’s legacy had he been a Republican.  Frank’s determined ability to ignore the housing bubble until it was too late to save Fannie or Freddie or avert the financial crisis played a not-insignificant role. And when Fannie and Freddie finally failed, together they accounted for nearly 12 million subprime and other low quality and risky loans (40% of outstanding loans at the time).  Most of the loans existed to meet the affordable housing goals that Frank, and others, argued so passionately to protect at a projected cost to taxpayers of $400 billion.  But despite being among those in Washington “at the wheel”, outside of a few more conservative publications, Frank has largely escaped the Joseph Hazelwood-esque blame of running the American economy ashore.

Frank’s defenders can rightly point out that he did not become chairman of the HFSC until after the 2006 elections; implying that the Fannie & Freddie reign of error happened solely due to the previous Republican majority.  Such a defense gets the dates and times correct, but little else.  The expansion of housing lending authority had roots in the 1990s, not the 2000s and had Frank worked with Republican efforts to constrain Fannie & Freddie, instead of insisting that there were no problems, legislation might have been adopted in the early 2000s that could have lessen (not prevented, as some may argue) the financial crisis.

Frank tried to undo his part in the Fannie & Freddie story, telling Larry Kudlow in a 2010 interview 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” while expressing hopes that Fannie & Freddie would soon occupy the dust-bin of poorly constructed governmental program history.  Of course, Frank’s preferred methods of “reform” could easily add another $5 trillion of debt to the country’s maxed-out gold card of credit.

10 thoughts on “To Be Frank

  1. Frank represented both the good and the bad in the American political system. I am a firm believer that, especially in the House, the voters should be able to choose whoever they like to represent them. That is the good.
    The bad is that Frank was a looney leftist who considered himself alienated from the beliefs of the majority of American citizens as well as American institutions and traditions. He was a firm believer that mortgage lenders “redlined” poor and minority communities. He was very proud of his success in forcing banks to lend money to people they did not believe to be good risks. We are all living with the results.

  2. Not long ago some pundit (couldn’t find the quote with a quick search) put forth that if Barney Frank weren’t: gay, a great quote, and a leftist among a left leaning media culture his Congressional career would have been slowed by the minor prostitution/ticket fixing scandal and sunk by the major scandal of rolling the dice regarding gov’t subsidized sub-prime loans ( http://online.wsj.com/article/SB122290574391296381.html ).

  3. Barney Frank was able to stonewall Republican attempts to reform Fannie and Freddie because he had seniority and thus got the chairmanship (now passing to Maxine Waters, another loon).

    Term limits would limit the amount of damage any one idiot could do.
    ..

  4. Only 3 things need to be said regarding the Barney Frank legacy of FM/FM:

    1) Franklin Raines, former Chairman and CEO of Fannie Mae, at one point in history, was
    2) Barney Frank’s lover, and
    3) walked away clean and unscathed from the FM/FM implosion with a $95,000,000 golden parachute.

    The fact that neither of those two are in federal prison is simply astounding.

  5. Bill,
    You’ve got 2 out of 3 right (one better than the average Strib story). Franklin Raines was not the FM exec who was partnered up with Rep. Frank. That was Herb Moses.
    A bigger sin was that when Raines was on the board and Rep. Frank was cheerleading for them while on the oversight committee, FM incentivised the executive team by bonusing them based on dollars out on loan, not how well those loans were performing.
    Imagine if a private company paid its executives based on what the salespeople sold and didn’t care whether or not the customer actually could or did pay the bill? I worked for a company like that once and they are no longer in business. They didn’t have a rich uncle that could bail them out when the sh** hit the fan.

  6. Lets also note that the mainstream media has fallen all over themselves to use the word ‘ascerbic’ in describing him. They should have taken a little time to write something like this..” On the bright side, Congressman Frank who spent 30 years in the center ring of american politics is leaving. This should be good news for those who are begging for an american politics that is less course, more civil and generally more positive..”.

  7. Term limits would limit the amount of damage any one idiot could do.

    Lobbyists are around much longer than congresscritters, and aren’t elected either.

  8. Term limits would limit the amount of damage any one idiot could do.

    Lobbyists are around much longer than congresscritters, and aren’t elected either.

  9. An interesting take on Frank from usually-more-liberal-than-this WaPo columnis Dana Milbank:
    http://www.washingtonpost.com/opinions/barney-the-bully-congressman-franks-other-legacy/2011/11/29/gIQAEX979N_story.html
    I would have more confidence in Milbank’s judgment if he had dared to write this column before Frank announced his retirement. It wasn’t that long ago that Milbank devoted an entire column to Eric Cantor’s sneer (think that I am kidding? it’s here: http://www.washingtonpost.com/opinions/eric-cantors-slick-upper-lip/2011/07/12/gIQAYqURBI_story.html) Also, Milbank dings Cantor because he went to a prep school (what does Milbank think Punahou Academy is? Oh well).
    Two important items in the column: One, Frank, like so many Democrat politicians, treated the people who worked for him like crap. Two: Frank’s comment when he lost his chairmanship after the 2010 elections: “I’m used to being in the minority. I’m a left-handed, gay Jew.”
    This was man who spent most of his life in big city and DC politics, never ventured far for long from the corridors of power in the metropolitan East Coast, could make or break the world’s wealthiest financial houses with a procedural vote, and he still considered himself an outsider.

    What a pathetic little man. He’s in the minority like all the other millionaire graduates of Harvard are in the minority. Too bad the people of Boston inflicted his neuroses on the rest of us.

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