I’m not going to give John McCain campaign tips (I'm leaning toward Obama), but how does McCain let such Democrats as Rep. Barney Frank get away with telling the press that McCain and President Bush opposed regulations on financial institutions, when it was Frank himself who long opposed those regulations?
Frank 'no crisis.' The New York Times reported on Sept. 11, 2003:
''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."
McCain warning. On the other hand, McCain on May 25, 2006, backed specific legislation to regulate Fannie Mae and Freddie Mac, a year before Frank finally caved in and called for reform only after it was too late.
"I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation," McCain said. "If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole."
Yet I saw Barney Frank interviewed several times yesterday, accusing Bush and McCain of blocking financial reforms, and not one reporter asked him about his own long and loud record of willful neglect. As Power Line's John Hinderacker asks today:
Maybe it's too much to expect anyone to remember the distant past -- 2003 -- but still, it seems remarkable that Barney Frank can make the rounds of the television talk shows, pontificating on the current crisis, without being reminded of his own role.
Democrats' responsibility. Frank's audacity is bizarre. The press is equally stunning in its oblivious silence. McCain has made some attempts to tell voters about this, but McCain's words have been obscured or omitted in news accounts.
"I think the responsibility the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac."
Frank and others like him might have had good intentions in pushing Fannie Mae and Freddie Mac to make home loans for low-income, high-risk customers. But from the 1990s to 2007, the Democrats simply closed their eyes to the mounting threat that these reckless, highly secretive operations posed to our entire financial system.
Update: More information that Barney Frank was destabilizing Fannie Mae as early as 1991:
Although Frank now blames Republicans for the failure of Fannie and Freddie, he spent years blocking GOP lawmakers from imposing tougher regulations on the mortgage giants. In 1991, ... the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two- and three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.
Three years later, President Clinton’s Department of Housing and Urban Development tried to impose a new regulation on Fannie, but was thwarted by Frank.
The Boston Globe, Nov. 22, 1991:
The federally chartered mortgage company Fannie Mae yesterday agreed to modify its rules restricting purchases of two-family and three-decker homes -- rules that housing advocates contend unfairly exclude low- and moderate-income families from buying homes in Boston.
After a nearly three-hour meeting with members of the Home Buyers’ Union, a local advocacy group, and representatives of Mayor Flynn and Rep. Joseph P. Kennedy 2d (D-Mass.), Fannie Mae officials agreed to substantially alter rules to allow what one termed “hundreds if not thousands” of buyers a chance to own two-family homes and three-deckers. …
Fannie Mae national spokesman David Jeffers said yesterday that the mortgage company restricted purchases of mortgages on multi-family homes after it saw many such mortgages go into default during the real estate slowdown.
He said the default rate on mortgages on two-family homes is twice that of single-family homes, and the rate for three-deckers is five times the rate for single-family dwellings.
But Jeffers said that after discussions with area homeowners, housing advocates, Kennedy and Rep. Barney Frank (D-Mass.), Fannie Mae officials agreed to purchase the mortgages made under the state’s “soft second” program, the primary source of mortgages for first-time homebuyers of low and moderate means.
Temporary sanity. In 2002, Frank was on the right track for about a half day, but then returned to his policy of allowing Fannie Mae and Freddie Mac to continue operating with loose rules and little supervision.
Citizens Against Government Waste, Sept. 25, 2002:
Citizens Against Government Waste (CAGW) today marveled at the arm-twisting acumen of one of Washington’s premiere lobbies, home mortgage behemoths Fannie Mae and Freddie Mac.
After a speech this week, Rep. Barney Frank (D-Mass.), the House Financial Services Committee's ranking member, let fly with characteristic bluntness regarding the Government Sponsored Enterprises’ (GSEs) $4.5 billion combined lines of credit with the U.S. Treasury. When asked whether he would consider revoking the lines of credit to the two Wall Street powerhouses, Frank frankly replied, “I would take a look at it. I don't think it (the line of credit) makes a lot of difference.”
Within hours, however, the usually pugnacious pol was falling over himself to backtrack. In a written statement, Frank meekly clarified that, “I apparently spoke imprecisely and gave an inaccurate impression of my views regarding federal policy governing Fannie Mae and Freddie Mac.” To complete the pirouette, he stated that in fact, "I start from a position in favor of the existing arrangements with regard to both Fannie Mae and Freddie Mac." …
“Despite his hasty retreat this week, Rep. Frank took an important step by saying aloud what so many think: that it is questionable whether Fannie and Freddie, hugely profitable as they are, should continue to be implicitly backed by Uncle Sam while able to duck full transparency requirements,” [CAGW Vice President Leslie] Paige [said]. “If only Frank had had the chutzpah to stick to his guns.”
'Roll the dice.' Check out what Barney Frank said about Fannie Mae and Freddie Mac at congressional hearings in 2003. He certainly wasn’t favoring more regulation. In fact, he seemed aware he was gambling with the money in those institutions (and eventually, taxpayers' money).
At a House Financial Services Committee hearing, Sept. 25, 2003, Frank said:
"I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing...."
Then. The New York Times, Sept. 30, 1999, reporting that the Clinton administration was sewing the seeds of a national financial disaster:
Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. …
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.
Now. The New York Times on Dec. 20, 2008, blaming the financial disaster on the Bush administration and everyone else except the Democrats:
There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.
But the story of how we got here is partly one of Mr. Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.
From his earliest days in office, Mr. Bush paired his belief that Americans do best when they own their own home with his conviction that markets do best when let alone.
Then. The New York Times on Sept. 11, 2003, reporting on President Bush’s proposal to end the high-risk lending by Fannie Mae and Freddie Mac, and noting that Rep. Barney Frank opposed Bush’s call for reform:
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. …
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken.
Now. President Clinton, in that somewhat self-serving statement Sept. 25, 2008:
“I think the responsibility the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.”
In The New York Times’ Dec. 20 report, Clinton’s Sept. 25 statement isn’t mentioned. The Times censors all evidence of the Democrats’ central role in destroying the economy.
In the Times, the president who tried to regulate Fannie Mae and Freddie Mac’s lending practices in 2003 is accused of opposing regulation. As usual, the newspaper’s whorish writers give the criminally reckless Democrats a free pass.
See also: Michael Barone: Democrats were wrong.
See also: Barney Frank re-elected!
Note: I voted for Barack Obama.