Let's be Frank

Barney Frank should thank his lucky stars that I was not one of the eight bank CEO’s forced to prostrate themselves before the House Financial Services Committee today. To steal a phrase from Kathy Griffin, I’d have slapped the dick out of his mouth.

Frank criticized the bonus culture of banks, however, hitting at the banks’ contention that compensation was important to keep talented people. “If I told you you wouldn’t get a bonus, what part of your job wouldn’t you do?” he asked.

It’s no surprise one of 535 lackwits enjoying what for all practical purposes is a lifetime appointment to Congress has no understanding of the competition for talented individuals that occurs in the private sector. The obvious answer to the question for truly talented individuals – you know, the kinds of folks who possess the knowledge and capability to actually revive a failing company – is, “I would do my job to the best of my ability until I could find a new gig in an industry you braying jackasses aren’t grandstanding about.”

Why hasn’t Barney Frank resigned from his seat in shame?

The July 3, 1998, Reliable Source column in The Washington Post reported Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his “spouse.” Another Washington Post report said Frank called Moses his “lover” and that the two were “still friends” after the breakup.

While the relationship reportedly ended 10 years ago, Frank was serving on the House Banking Committee the entire 10 years they were together. The committee is the primary House body which along with the Office of Federal Housing Enterprise Oversight (OFHEO) has jurisdiction over the government-sponsored enterprises.

He has served on the committee since becoming a congressman in 1981 and became the ranking Democrat on the committee in 2003. He became chairman of the committee, now called the House Financial Services Committee, in 2007.

Moses left Fannie in 1998 to start his own pottery business. National Mortgage News called Moses a “mortgage guru” and said he developed “many of Fannie Mae’s affordable housing and home improvement lending programs. Moses ended his relationship with Frank just months after he left Fannie.So, twenty eight years on the House Banking/Finacial Services Committee – including ten while he was taking warm showers until the wee hours of the morning with a Fannie Mae executive. I believe grifters call manipulating their mark with sex “The Honey Pot”. But don’t blame Frank, there’s nothing he could have done to rein in Wall Street greed.

The first concerted push to rein in Fan and Fred in Congress came as far back as 1992, and Mr. Frank was right there, standing athwart. But things really picked up this decade, and Barney was there at every turn. Let’s roll the audiotape:

In 2000, then-Rep. Richard Baker proposed a bill to reform Fannie and Freddie’s oversight. Mr. Frank dismissed the idea, saying concerns about the two were “overblown” and that there was “no federal liability there whatsoever.”

Two years later, Mr. Frank was at it again. “I do not regard Fannie Mae and Freddie Mac as problems,” he said in response to another reform push. And then: “I regard them as great assets.” Great or not, we’ll give Mr. Frank this: Their assets are now Uncle Sam’s assets, even if those come along with $5.4 trillion in debt and other liabilities.

Again in June 2003, the favorite of the Beltway press corps assured the public that “there is no federal guarantee” of Fan and Fred obligations.

A month later, Freddie Mac’s multibillion-dollar accounting scandal broke into the open. But Mr. Frank was sanguine. “I do not think we are facing any kind of a crisis,” he said at the time.

Three months later he repeated the claim that Fannie and Freddie posed no “threat to the Treasury.” Even suggesting that heresy, he added, could become “a self-fulfilling prophecy.”

In April 2004, Fannie announced a multibillion-dollar financial “misstatement” of its own. Mr. Frank was back for the defense. Fannie and Freddie posed no risk to taxpayers, he said, adding that “I think Wall Street will get over it” if the two collapsed. Yes, they’re certainly “over it” on the Street now that Uncle Sam is guaranteeing their Fannie paper, and even Fannie’s subordinated debt.

By early 2007, Mr. Frank was in charge of the House Financial Services Committee, arguing that he had long favored some kind of reform. “What blocked it [reform] last year,” Mr. Frank said then, “was the insistence of some economic conservative fundamentalists in the Bush Administration who, to be honest, don’t think there should be a Fannie Mae or a Freddie Mac.” What really blocked it was Mr. Frank’s insistence that any reform be watered down and not include any reduction in their MBS holdings.

In January of last year, Mr. Frank also noted one reason he liked Fannie and Freddie so much: They were subject to his political direction. Contrasting Fan and Fred with private-sector mortgage financers, he noted, “I can ask Fannie Mae and Freddie Mac to show forbearance” in a housing crisis. That is to say, because Fannie and Freddie are political creatures, Mr. Frank believed they would do his bidding.

And this is exactly what Mr. Frank attempted to prove when the housing market started to go south. He encouraged the companies to guarantee more “affordable” mortgages, thus abetting their disastrous plunge into subprime and Alt-A loans. He also pushed for, and got, an increase in the conforming-loan limits to allow Fan and Fred to securitize and guarantee larger mortgages. And he pressured regulators to ease up on their capital requirements — which now means taxpayers will have to make up that capital shortfall.I guess that’s what Obama means when he talks about failed policies of the last eight years that got us into this mess.

Thanks a million, Massachusetts! Has sending Barney Frank to Washington lo these many years been some pathetic attempt to make Ted Kennedy and John Kerry seem semi-competent in comparison? I’d suggest Frank be ridden out of town on a rail if I was absolutely sure he wouldn’t enjoy it. They say you get the government you deserve. What did America do to deserve this?

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