Barney Frank and the Subprime Crisis by Gregory Hilton

Committee Chairman Rep. Barney Frank (D-MA) speaks with Federal Reserve Chairman Ben S. Bernanke and Secretary of the Treasury Timothy F. Geithner (R) before a hearing of the House Financial Services Committee on Capitol Hill March 24, 2009.

Committee Chairman Rep. Barney Frank (D-MA) speaks with Federal Reserve Chairman Ben S. Bernanke and Secretary of the Treasury Timothy F. Geithner (R) before a hearing of the House Financial Services Committee on Capitol Hill March 24, 2009.

Many factors contributed to the current economic meltdown, but Rep. Barney Frank (D-MA) clearly has some responsibility. Frank, the Chairman of the House Financial Services Committee, was one of the primary lawmakers pushing Freddie Mac and Fannie Mae to take over a larger share of the mortgage market by lowering lending standards. Frank helped to enable these government supported entities (GSEs) who in turn sparked the explosion in sub-prime mortgages.
Ironically, Frank has now introduced legislation to curb the same subprime lending he was aggressively pushing it in the past. He was in the forefront of the 2004 rule change which allowed high risk loans. Frank also routinely rejected efforts to curb Freddie and Fannie.
The Fannie/Freddie activities are a big part of why we are where we are. As of now there are NO possible good outcomes, and things will get quite a bit worse before stabilizing. The only question is what combination of inflation/economic contraction we get. Our policy makers did not see this coming, and they take no responsibility for their sins of omission. There is very little chance these overtly partisan lawmakers will be a part of any meaningful solution.
Rep. Frank is an intense partisan and it is ironic he uses such high voltage rhetoric to criticize others for the economic meltdown when he was at the center of the subprime crisis. I am sure his intentions were admirable, and we all want to see low income people in desirable housing. However, the encouragement of subprime mortgages had disastrous consequences for the economy.
Rep. Frank is also aggressively attacking those he considers to be his opponents. He has however publicly said Supreme Court Justice Antonin Scalia is a “homophobe” who “makes it very clear that he’s angry, frankly, about the existence of gay people.”
Frank points to Scalia’s dissenting opinion in Lawrence vs. Texas—a case that struck down a statute criminalizing homosexual sodomy—& accuses the justice of thinking that “it’s a good idea for two consenting adults who happen to be gay to be locked up because he is so disapproving of gay people.”
Scalia never said that. He wrote: “Let me be clear that I have nothing against homosexuals promoting their agenda through normal democratic means.” Scalia’s view is that when laws on morality are concerned gay people will have to fight for what they want in the political arena, not the courts. That is consistent with Scalia’s well known judicial philosophy.
According to law professor Ann Althouse: “It is common for justices to soften the blow of a harsh decision by letting us know that they don’t like the particular law they are forced to uphold. Indeed, in Lawrence, Justice Clarence Thomas wrote separately to say that he thought the law criminalizing homosexual sodomy was an “uncommonly silly” one that he would vote against if he were a legislator. Scalia is resisting telling us about his personal views because they are irrelevant to the work of a judge, and he’s modeling upstanding judicial behavior, saying what the law is and nothing more. . . Scalia is adhering to the most basic legal proposition that judges must decide cases according to the law and leave the rest to the processes of democracy.”
There is a blog for gay conservatives. I am in complete agreement with their observations on Frank’s recent exchange at Harvard University, and the link is at
“The most telling thing about the exchange between Barney Frank and a conservative student questioning him in public forum at Harvard is how quick the Massachusetts Democrat is to attack. How dare someone pose such a tough question! How dare someone ask him to consider if he might have done something wrong. Barney’s used to getting softball questions from an adoring media. Tough questions mean someone is accusing him. They’re part of some nefarious right-wing plot! . . . His failure to consider his misdeeds is particularly telling given his repeated defense over the years of Fannie Mae and Freddie Mac, the Government-Sponsored Enterprises (GSEs) whose failure sparked the financial meltdown. Hence the defensiveness, I suspect.”


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s