By Carter Clews
Keen observers of the political-financial complex have long observed that Rep. Barney Frank (D-MA) should be in jail. He is, after all, one of the one two powerful members of the House and Senate banking committees (the other being Chris Dodd (D-CN), who should also be sporting an orange perp suit) who formed the Dynamic Duo that aided and abetted the massive Fannie Mae/Freddie Mac mortgage scam.
In light of Mr. Frank’s latest machinations, however, said keen observers are no longer suggesting that he belongs in jail. Now, they believe he belongs in a mental institution.
Frank, many will recall, is the Congressman who, sitting high atop his perch as Fannie’s and Freddie’s hand-picked hand-puppet on the House banking committee angrily blocked any and all attempts to bring the corrupt organizations under even a modicum of desperately needed oversight. In September of 2003, when the ogre George Bush warned Congress that the corrupt practices of Barney’s partners in crime were about to precipitate a financial disaster, Frank famously retorted to the New York Times:
“These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Not so coincidentally, at the very time Barney Franks made this patently outrageous statement, he had received some $40,100 from Fannie and Freddie in campaign contributions. In fact, Frank is ranked 16th on a list that includes both houses of Congress and fifth among his colleagues in the House in receiving Fannie and Freddie largess.
And, remember: this all came at a time when Frank was one of the primary members of the House responsible for overseeing the two corrupt entities. Unfortunately for America, the monkey was in charge of the zoo, for as Karl Rove told Hannity & Colmes in September of 2008, “I got to tell you, for five years, I was part of an effort at the White House to fight this and our biggest opponents on the Hill who blocked this every step of the way were people like Chris Dodd and Barney Frank.”
In short, Barney Frank epitomized the appallingly corrupt practice known as “pay to play.” Were he in the private sector, it would constitute taking a bribe. And that’s why keen observers have long contended that Barney Frank ought to be shackled to the wall in a Sing Sing cell.
Until this week.
Frank has raised anew the critical issue of whether the criminally insane should be incarcerated in conventional jails, or relegated to mental institutions. The issue surfaced when it was disclosed earlier this week that Frank—still thoroughly unrepentant for having helped mastermind the Fannie Mae/Freddie Mack trillion-dollar mortgage scam—recently sent a letter to the current heads of the two still-underegulated institutions urging them to set new, lower standards for condo buyers.
That’s right, the man who helped undermine the financial system by pushing to lower capital requirements for Fannie Mae (from 10 percent to 2.5 percent) … the man who fought tooth and nail to prevent any sort of regulation to curb Fannie Mae’s MBS portfolio from 2000-2007 (while its portfolio grew from $1.5 trillion to $5 trillion) … the man who personally vilified George W. Bush for even suggesting that Fannie and Freddie may be heading for disaster (and dragging the nation down with them)—this very man now wants to further corrupt Fannie Mae’s lending standards by forcing it to hand out more unsecured loans.
Here’s how the astonished editors at Wall Street Journal put it:
“You read that right. After two years of telling us how lax lending standards drove up the market and led to loans that should never have been made, Mr. Frank wants Fannie and Freddie to take more risk in condo developments with high percentages of unsold units, high delinquency rates or high concentrations of ownership within the development.
“Fannie and Freddie have restricted loans to condo buyers in these situations because they represent a red flag that the developments — many of which were planned and built at the height of the housing bubble — may face financial trouble down the road. But never mind all that. Messrs. Frank and Weiner think, in all their wisdom and years of experience underwriting mortgages, that the new rules ‘may be too onerous’…
“Fannie and Freddie have already lost tens of billions of dollars betting on the mortgage market — with that bill being handed to taxpayers. They face still more losses going forward, because in the wake of their nationalization last year their new “mission” has become to do whatever it takes to prop up the housing market. The last thing they need is lawmakers like Mr. Frank, who did so much to lay the groundwork for their collapse, telling them to play faster and looser with their lending standards.”
Albert Einstein once defined insanity as “doing the same thing over and over again and expecting a different result.”
Welcome to your padded cell, Mr. Frank.
Carter Clews is the Executive Editor of ALG News Bureau.
