Barney Frank

A Commentary on the Financial Crises of 2008By Cameron Shorey

Political Career

• Graduate of Harvard University in 1962

• chief assistant in Kevin White’s campaign for Mayor of Boston in 1968

• Won seat in Massachusetts State Legislature in 1972

• Won seat in U.S. Congress in 1987

Committee of Financial Services

2002 – Frank was ranking minority member of committee in charge of monitoring the

Federal Reserve and other financial entities including Fannie Mae and Freddie Mac.

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As two chartered, government-sponsored enterprises (GSE), the original mission of Fannie Mae and Freddie Mac was to make mortgages more affordable in the U.S.

However, government backing gave Fannie Mae, Freddie Mac a monopoly on secondary mortgages and government implied a guarantee to keep the firms buoyant

Many politicians and economists saw trouble looming in the current structure, but in 2003 Frank assured the world that the GSE’s were “fundamentally sound financially and withstand some of the disastrous scenarios”

Housing BubbleWith support from congress, especially Barney Frank, Fannie Mae and Freddie Mac among other large firms were able to increase in size and risk with their mortgages creating a housing bubble

Frank supported home ownership and dismissed the claims that there was a housing bubble of any kind

Audio quote (MSNBC):http://www.youtube.com/watch?v=w-YtqVIKTTE&feature=related

But didn’t we just hear Frank say that it was his committee that would continue to push for housing?

in 2010 Frank blames the Bush administration for the needed bailout of Fannie Mae by encouraging home ownership…

Collapse

Yes, we did. Interview with Larry King compared to speech on C-SPAN:

http://www.youtube.com/watch?v=2UZ9l_AxKjA&feature=related

It would appear as though Fannie Mae and Freddie Mac were not so “fundamentally sound” as Frank had previously asserted.

Dodd-Frank

In response to the “Great Recession,” the Dodd-Frank Wall Street Reform and Consumer Protection Act is being written in an effort to bring more regulation to the financial environment. Ironically, Barney Frank is one of the authors.

Can we trust Barney Frank?

• His failed responsibility to oversee Fannie Mae and Freddie Mac played a huge part in the financial crises

• He is hypocritical with his stance on economics• Lastly, he divulges false information to the media

“I think it’s perfectly reasonable for people to be angry, but let’s be clear who put the fix in. The fix was put in by the federal government. If you want to put people in jail, I’ll second what [Rep. Michele Bachmann (R-MN)] said. Start with Barney Frank and Chris Dodd and let’s look at the politicians who created the environment.” - Newt Gingrich

Newt Gingrichs’ comment on Wall Street protesters and Barney Frank…

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