Barney playing hide the Frank with Fannie Mae exec

[Whet]

Barney Frank's live-in boyfriend was a Fannie Mae executive, while Barney was overseeing the agency! Even Bill Clinton blamed Dems for failing to oversee their cash hog.

Link (http://www.foxnews.com/story/0,2933,432501,00.html)

Lawmaker Accused of Fannie Mae Conflict of Interest

Friday , October 03, 2008
By Bill Sammon

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WASHINGTON —
Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s. So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions.
Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.
Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical.
"It’s absolutely a conflict," said Dan Gainor, vice president of the Business & Media Institute. "He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane?
"If this had been his ex-wife and he was Republican, I would bet every penny I have - or at least what’s not in the stock market - that this would be considered germane," added Gainor, a T. Boone Pickens Fellow. "But everybody wants to avoid it because he’s gay. It’s the quintessential double standard."
A top GOP House aide agreed.
"C’mon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?" the aide told FOX News. "No media ever takes note? Imagine what would happen if Frank’s political affiliation was R instead of D? Imagine what the media would say if [GOP former] Chairman [Mike] Oxley’s wife or [GOP presidential nominee John] McCain’s wife was a top exec at Fannie for a decade while they wrote the nation’s housing and banking laws."
Frank’s office did not immediately respond to requests for comment.
Frank met Moses in 1987, the same year he became the first openly gay member of Congress.
"I am the only member of the congressional gay spouse caucus," Moses wrote in the Washington Post in 1991. "On Capitol Hill, Barney always introduces me as his lover."
The two lived together in a Washington home until they broke up in 1998, a few months after Moses ended his seven-year tenure at Fannie Mae, where he was the assistant director of product initiatives. According to National Mortgage News, Moses "helped develop many of Fannie Mae’s affordable housing and home improvement lending programs."
Critics say such programs led to the mortgage meltdown that prompted last month’s government takeover of Fannie Mae and its financial cousin, Freddie Mac. The giant firms are blamed for spreading bad mortgages throughout the private financial sector.
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 year Moses was hired by Fannie, 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. Clinton now blames such Democrats for planting the seeds of today’s economic crisis.
"I think the responsibility that 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," Clinton said recently.

[mdklatt]

If the pubz are so worthless that they can't fix problems in plain sight--McCain has been warning us about this for years after all--even when they control all three branches of government, no way in hell am I going to vote for them.

[Soonerus]

Barney that is ghey...

[Widescreen]

So you won't vote for the people who tried to fix it but will vote for the people who continually blocked the "change" that they claim to be so desperate for. Why people would vote for the dems after their culpability in all this is remarkable. As a country, we're fixing to get what we ask for.

[Curly Bill]

So you won't vote for the people who tried to fix it but will vote for the people who continually blocked the "change" that they claim to be so desperate for. Why people would vote for the dems after their culpability in all this is remarkable. As a country, we're fixing to get what we ask for.

I'm to the point where I almost want to see Brack win, just so I can set back and laugh my *** off for the next four years.

[Curly Bill]

I'm to the point where I almost want to see Brack win, just so I can set back and laugh my *** off for the next four years.

...and I think Brack winning could help my post count immensely on here. :D

[Soonerus]

Brack winning could be the end of the world...

[Curly Bill]

Brack winning could be the end of the world...

I ain't having all that much fun anyway! :D

[Chuck Bao]

Good grief! They were all in bed together at one time or another.



McCain Chief of Staff Previously Lobbied Senator on Behalf of Freddie Mac

Mark Buse, the gay chief of staff for Sen. John McCain, was retained by failed mortgage giant Freddie Mac in 2003 and 2004 to lobby McCain. Buse, then the staff director for the Senate Commerce Committee, was hired by the company to work with the Arizona senator on executive-pay issues, and his firm earned $460,000 in fees for the effort, The Washington Post reports.

In 2003, the Post reports, McCain conducted a Senate hearing at which he decried the so-called golden parachutes that executives often receive when they're dismissed, regardless of their job performance. Soon afterward the president and CEO of Freddie Mac walked away with $6 million in stock options and $24 million in compensation, respectively.

"Senator McCain was talking about limiting executive compensation, and Buse was retained to nip that in the bud," an anonymous lobbyist with knowledge of the situation told the Post.

Buse, who was a member of McCain's staff for 17 years beginning in 1984 before becoming a lobbyist, returned to become his chief of staff this year. He declined to comment to the Post.

McCain campaign spokesman Brian Rogers denied there was any undue influence. "I think the reality is that John McCain takes positions, you know, based on what he believes is in the public interest, period," Rogers told the Post. "If these folks thought they were getting something out of John McCain...it's not based in fact."

[bluedogok]

I could care less about his sexual preference, it's his politics that I don't like and I don't consider myself a Republican anymore. Even the Boston paper is saying he is a big reason why there are problems with the Fannie Mae/Freddie Mac debacle.


The Boston Globe - Frank's fingerprints are all over the financial fiasco (http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_financial_fia sco/?p1=Well_MostPop_Emailed1)
By Jeff Jacoby
Globe Columnist / September 28, 2008

'THE PRIVATE SECTOR got us into this mess. The government has to get us out of it."

That's Barney Frank's story, and he's sticking to it. As the Massachusetts Democrat has explained it in recent days, the current financial crisis is the spawn of the free market run amok, with the political class guilty only of failing to rein the capitalists in. The Wall Street meltdown was caused by "bad decisions that were made by people in the private sector," Frank said; the country is in dire straits today "thanks to a conservative philosophy that says the market knows best." And that philosophy goes "back to Ronald Reagan, when at his inauguration he said, 'Government is not the answer to our problems; government is the problem.' "

In fact, that isn't what Reagan said. His actual words were: "In this present crisis, government is not the solution to our problem; government is the problem." Were he president today, he would be saying much the same thing.

Because while the mortgage crisis convulsing Wall Street has its share of private-sector culprits -- many of whom have been learning lately just how pitiless the private sector’s discipline can be -- they weren't the ones who "got us into this mess." Barney Frank's talking points notwithstanding, mortgage lenders didn't wake up one fine day deciding to junk long-held standards of creditworthiness in order to make ill-advised loans to unqualified borrowers. It would be closer to the truth to say they woke up to find the government twisting their arms and demanding that they do so - or else.

The roots of this crisis go back to the Carter administration. That was when government officials, egged on by left-wing activists, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites.

The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." Lenders responded by loosening their underwriting standards and making increasingly shoddy loans. The two government-chartered mortgage finance firms, Fannie Mae and Freddie Mac, encouraged this "subprime" lending by authorizing ever more "flexible" criteria by which high-risk borrowers could be qualified for home loans, and then buying up the questionable mortgages that ensued.

All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices. A manual issued by the Federal Reserve Bank of Boston advised mortgage lenders to disregard financial common sense. "Lack of credit history should not be seen as a negative factor," the Fed's guidelines instructed. Lenders were directed to accept welfare payments and unemployment benefits as "valid income sources" to qualify for a mortgage. Failure to comply could mean a lawsuit.

As long as housing prices kept rising, the illusion that all this was good public policy could be sustained. But it didn't take a financial whiz to recognize that a day of reckoning would come. "What does it mean when Boston banks start making many more loans to minorities?" I asked in this space in 1995. "Most likely, that they are knowingly approving risky loans in order to get the feds and the activists off their backs . . . When the coming wave of foreclosures rolls through the inner city, which of today's self-congratulating bankers, politicians, and regulators plans to take the credit?"

Frank doesn't. But his fingerprints are all over this fiasco. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis." When the White House warned of "systemic risk for our financial system" unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.

Now that the bubble has burst and the "systemic risk" is apparent to all, Frank blithely declares: "The private sector got us into this mess." Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he can find one suspect in the nearest mirror.

[Chuck Bao]

It looks like I'm on the losing side of this debate. Thanks for posting the Boston Globe article, bluedogok.

I just don't get it, though. Are they saying that the loan defaults are inner city and to minorities? If not, what does redlining have to do with anything?

For some reason, I was thinking that defaults were largely in new housing tracts in suburban areas.

I agree with the philosophy that everyone should have the opportunity to own their home. It doesn't have to be a big house in the suburbs. It could be a small condo or duplex. You buy what you can afford and trade up as you can afford it.

Maybe the expectations of the American dream got ahead of itself or maybe there is a real shortage of affordable housing.

Housing should be affordable. That is one reason that I am so much against the financial bailout. Let housing prices fall to affordable levels.

No matter how many respected journalists want to jump on this blame Washington bandwagon, I still think that the problem was with the originating loan officer and the terms of the loan. Little or no downpayment? ARMs? I just don't see that mandated in any law passed by Congress.

[mdklatt]

I just don't get it, though. Are they saying that the loan defaults are inner city and to minorities?

Of course. We all know it was illegal immigrants and welfare queens using their food stamps to buy condos in Florida and Las Vegas on spec.

[Sooner Eclipse]

Of course. We all know it was illegal immigrants and welfare queens using their food stamps to buy condos in Florida and Las Vegas on spec.

Dude, if you cant admit that government is the root of this problem, then you're hopeless. Your parents sent you to school to learn something, get to work. RR was, and still is right.

[Sooner Eclipse]

It looks like I'm on the losing side of this debate. Thanks for posting the Boston Globe article, bluedogok.

I just don't get it, though. Are they saying that the loan defaults are inner city and to minorities? If not, what does redlining have to do with anything?

For some reason, I was thinking that defaults were largely in new housing tracts in suburban areas.

A lot of it is in suburbia, but you cant just change the rules for one group, they get changed for all. By loosening the rules for poor people who probably shouldn't be buying a home, you allow those that qualify for typical loan to qualify for a gigantic loan they have no business getting.

[bluedogok]

Chuck - In many markets they overbuilt high rise condos in urban areas, which has also greatly led to the downfall as well. It just really depends on the predominant housing type for the market, outside of the northeast suburbia is a big part of it. For Boston much of it has been the ultra high priced condos, I know because we looked at them when we considered moving there.


A lot of it is in suburbia, but you cant just change the rules for one group, they get changed for all. By loosening the rules for poor people who probably shouldn't be buying a home, you allow those that qualify for typical loan to qualify for a gigantic loan they have no business getting.
That is a bunch of it, people buying way more than they should because they could borrow way more than they should. Housing prices have been artificially inflated for a long time because of the money that was available. Much of the new housing developments in suburbia were developed by the mega-builders who had their own mortgage "companies" that sold off the paper, they set the prices for the homes and therefore pretty much what the appraisal was. They also made obscene profits along the way, I know of one that I worked with whose profit margin on a "starter home" in the 200K range was about 45% and up to 55-60% on high end homes. The net was greater on the high end stuff because they used the same labor on either, there used to be "craftsmanship" in high end home but the megabuilders made them nothing more than the same widget with different paint jobs. Those numbers were just for the building division where I knew people who worked for them, I don't know what the mortgage division profit levels were, but I bet it was a real good margin.

This has also had an effect on the existing housing market, someone buying from a megabuilder with loose credit policies (since they had no long term investment) could put someone in a 200K brand new house where someone going through an institution that used time honored practices and conventional loans would only loan that same person on an existing home somewhere in the 125K range. Those people saw the "big, shiny new house for a higher price but with a lower payment (because of exotic financing) and would go bigger because they could.

The fact that things could be easily bought on credit has driven the inflation of everything along the way, cars cost more and you can finance them longer, college has gone up at astronomical rates because the mentality was is you just get more loan money. Easy credit in all forms has fed the boom, as it always does, and a bust follows like it always does. nothing new here, just the same old, same old.

[jkjsooner]

No matter how many respected journalists want to jump on this blame Washington bandwagon, I still think that the problem was with the originating loan officer and the terms of the loan. Little or no downpayment? ARMs? I just don't see that mandated in any law passed by Congress.

Blame the originating loan officer all you want but if that guy can unltimately cause a financial collapse then government has responsibility.

[SCOUT]

The CRA is a good example of why the government mishandles most of what it touches. People like Barney Frank do what will get them elected. Legislating how loans are granted takes away the natural free market checks that help keep things afloat. They are always with good intentions, but the road to hell is paved with those. It is the same trap that socialism/communism proposes. It sounds great, but in practice, it just doesn't work.

My personal hope is that Americans see the mistakes of this crisis and are able to apply it elsewhere. Healthcare is a topic that is top of mind today and I truly hope people see the ineptitude of the government has when it tries to legislate what feels right rather than looking for solutions that will actually work.

[Fugue]

The CRA is a good example of why the government mishandles most of what it touches. People like Barney Frank do what will get them elected. Legislating how loans are granted takes away the natural free market checks that help keep things afloat. They are always with good intentions, but the road to hell is paved with those. It is the same trap that socialism/communism proposes. It sounds great, but in practice, it just doesn't work.

My personal hope is that Americans see the mistakes of this crisis and are able to apply it elsewhere. Healthcare is a topic that is top of mind today and I truly hope people see the ineptitude of the government has when it tries to legislate what feels right rather than looking for solutions that will actually work.


I agree. Socialism/communism don't work because it takes human beings to run them. Time after time we fail at it. I don't see why we'd want to move in the direction of bigger government.

[Chuck Bao]

I agree. Socialism/communism don't work because it takes human beings to run them. Time after time we fail at it. I don't see why we'd want to move in the direction of bigger government.

I don't know if you are following what is happening on Wall Street, but it appears to me that we don't have a choice.

[Fugue]

I don't know if you are following what is happening on Wall Street, but it appears to me that we don't have a choice.

Sure I'm following it. Government had a huge hand in screwing that up.
Name things our federal government handles well?

[Vaevictis]

Name things our federal government handles well?

Highway Systems
Research and Development
Higher Education
Medical Payment Systems

Those are the ones that are obvious to me.

[Vaevictis]

Sure I'm following it. Government had a huge hand in screwing that up.

I'm also interested in hearing someone back this up with an actual analysis instead of just chanting CRA CRA CRA!

[Fugue]

I'm also interested in hearing someone back this up with an actual analysis instead of just chanting CRA CRA CRA!

You're right, they had nothing to do with it. And when they "fixed" it, they came up with the perfect plan. Whew, I'm relieved now.

[Fugue]

Highway Systems
Research and Development
Higher Education
Medical Payment Systems

Those are the ones that are obvious to me.


Yeah, those are some real notches in their belt right there. Each of which could be done better privately.

[Fugue]

The only thing I'd give you would be Fed law enforcement and the military but in both cases I think their success is almost completely driven by the quality of the agent/soldier. Post office works too. Being able to send info acroos the nation for cents is a win.

[Vaevictis]

Yeah, those are some real notches in their belt right there. Each of which could be done better privately.

You're welcome to your opinion. But do remember: it's just an opinion.

[Vaevictis]

You're right, they had nothing to do with it. And when they "fixed" it, they came up with the perfect plan. Whew, I'm relieved now.

I'm not saying that they did or didn't. Just that nobody's shown it.

Most of the CRA claims I've seen make their conclusion on a fundamentally broken understanding of how the CRA works.

[Fugue]

I'm not saying that they did or didn't. Just that nobody's shown it.

Most of the CRA claims I've seen make their conclusion on a fundamentally broken understanding of how the CRA works.

But very simply, the folks who had oversight of this did not do their jobs and this applies to the Administration as well as Congress. I believe that saying the federal government didn't play any part in this failure is intellectually dishonest.

[Fugue]

You're welcome to your opinion. But do remember: it's just an opinion.


Yeah, but mine is right. :D

[StoopTroup]

I ain't having all that much fun anyway! :D

Now that it looks like I'm not making the RRSO...

Might as well sit back and watch the pretty nuclear blasts.

LMAO Bill

[achiro]

Highway Systems
Research and Development
Higher Education
Medical Payment Systems

Those are the ones that are obvious to me.

HAHAHAHA! Back in the day when the highway systems were getting started, maybe. But now? no way
R&D, it's not the gob doing that, they fund PRIVATE industry contractors to do it for them.
Higher Education? Really, you think the fed has anything to do with the quality of HE?

Medical Payment systems? You obviously don't deal with this on a daily basis. Private companies anre heads and shoulders above the fed.

Keep dreamin!

[achiro]

oh and we should add that 3 of the 4 things you listed are mostly handled by private industry that just has fed money thrown at it.

[Vaevictis]

Yeah, but mine is right. :D

With respect to those four areas?

Are you gonna try to argue that the national highway system was better before the Feds got involved?

Are you going to try to argue that private companies do a better job of funding fundamental research?

Are you going to try to argue that if the Federal Government stopped all funding of higher education we'd be better off?

Are you going to try to argue that Medicare's payment overhead of 1-3% is actually worse than private industry's, which sits at 10-15%?

[Vaevictis]

oh and we should add that 3 of the 4 things you listed are mostly handled by private industry that just has fed money thrown at it.

Fair enough. But that doesn't mean private industry alone does research better. A lot of fundamental research (most, probably) wouldn't get done if it was left to private industry to fund. Future revenue streams are too uncertain.

[OklahomaRed]

Research done well? There are millions of dollars thrown down "store front" research at several public universities that is nothing but welfare. Name something useful that has came out of dozens of universities that are on the government ti* in the last 5 years?

[Fugue]

With respect to those four areas?

Are you gonna try to argue that the national highway system was better before the Feds got involved?

Are you going to try to argue that private companies do a better job of funding fundamental research?

Are you going to try to argue that if the Federal Government stopped all funding of higher education we'd be better off?

Are you going to try to argue that Medicare's payment overhead of 1-3% is actually worse than private industry's, which sits at 10-15%?

running it and funding it are 2 different things but in general, when it is funded and run privately with competition it is done better.

[Vaevictis]

running it and funding it are 2 different things but in general, when it is funded and run privately with competition it is done better.

In many cases, I agree with you. Hence, the government 'handles' these things well.

They know that the private sector isn't in a position to fund it, but if funded would do it better than if the government handled it in house. So, they simply fund it.

[Vaevictis]

Name something useful that has came out of dozens of universities that are on the government ti* in the last 5 years?

My own research project, for one. Funded by Oklahoma DOT and Federal match. I developed a device and system that provides a service that the private sector had previously developed and had been providing.

My device does it at 10% of the cost, with far more capability.

[Fugue]

In many cases, I agree with you. Hence, the government 'handles' these things well.

They know that the private sector isn't in a position to fund it, but if funded would do it better than if the government handled it in house. So, they simply fund it.


In those situations they aren't doing anything but shelling out money. And we've seen with this bailout that they suck at that too. How many millions of pork dollars were there?

[Vaevictis]

In those situations they aren't doing anything but shelling out money. And we've seen with this bailout that they suck at that too. How many millions of pork dollars were there?

And that's still more efficient than the private sector which wasn't in a position to do anything at all.

[Vaevictis]

Which, for what it's worth, is primarily where I advocate government intervention.

Contrary to certain people's religious beliefs, there are cases where the free market doesn't function.

[Fugue]

And that's still more efficient than the private sector which wasn't in a position to do anything at all.

Unless they have responsibility in causing the problem.
That's like a relief pitcher blowing the lead so he can't get the win.

[Vaevictis]

Unless they have responsibility in causing the problem.
That's like a pitcher creating his own save opportunity.

Again, I'd like to see something that actually shows that the government is responsible for the current problem.

I have yet to see anything of the sort. I've seen claims and allegations, but little or no supporting evidence.

[OUthunder]

yrfPMa3lONU

[Vaevictis]

Let me clarify the above, however: Do I think that the government has some responsibility? Yes.

I put the current situation more on loan officers being divorced from the riskiness of the people they signed, credit rating agencies doing a bad job in their due diligence, banks loading up on leverage without the ability to unlever when they needed to, and fear of a credit market lockup actually causing one.

[Fugue]

Again, I'd like to see something that actually shows that the government is responsible for the current problem.

I have yet to see anything of the sort. I've seen claims and allegations, but little or no supporting evidence.


You don't think the federal government has played any part in this failure?

[Vaevictis]

You don't think the federal government has played any part in this failure?

I think the difference between you and me is the weights assigned.

I personally feel that the government had some hand in it, but it was minimal.

The fact of the matter is, you basically had a complete utter failure of confidence in the ratings of these securities (this is a private sector issue, as it's the private sector issues the ratings). That made them illiquid. You had banks leveraged up to hell and back (again, a private sector issue, as the government didn't make them leverage up this much). They encountered a situation where they couldn't maintain their position, so they had to start unwinding it. But, the position was illiquid, so they couldn't without accepting a major discount (again, not a government issue -- it's the private sector that buys these things, and if the private sector ain't buying, it ain't buying).

Then, because these assets were a major part of the equity base of many institutions, their potential counter-parties can't evaluate the risk of doing business with them. So, counter-parties simply decline to do business. People start worrying the same will happen to them, so they start hoarding cash. A fear of a credit crunch essentially causes a credit crunch.

From there, it's simple economics taking over.

[Fugue]

I'll agree to that V. I've just lost all confidence in the Feds after watching them perform these last couple of weeks.

[Frozen Sooner]

Well, part of the problem was the GAAP standard for valuation of illiquid performing securities. Someone did a great job explaining it around here in the last couple of weeks, but it had to do with GAAP requiring that illiquid performing securities be marked to 20% of face, which ended up making some banks that had heavily invested in CMOs undercapitalized.

That could legitimately be considered a regulatory problem, as FDIC requires that all accounting be GAAP-standard. I believe part of the bailout bill provides for marking such securities to 80% of face rather than 20%.

[Vaevictis]

Yeah, I'll agree to that, also.

The problem is that these securities wouldn't be illiquid if the ratings agencies hadn't ****ed the dog in the ratings. The problem is that people can't value the things, so they don't want to risk buying them.

If there was a trustable third party that could evaluate these things and bless them with a rating people could believe in, I think all of this would clear up instantly.

[jkjsooner]

Yeah, those are some real notches in their belt right there. Each of which could be done better privately.

Sure, if you want to pay a toll every five minutes. How else would the private sector make money off of the roads?

I don't know where you live so this isn't directed to you. I find it interesting that so many people in rural areas seem to have this "almost zero government" mindset. Without government these rural areas would probably still be without electricity or decent roads considering the population density just doesn't support the investment in these.

[jkjsooner]

You don't think the federal government has played any part in this failure?

I think they played a large role but not in the way you think they did. They simply didn't regulate these financial products adequately. Some (Bush) did it out of a misguided philosophy and others (Frank) did it because they were essentially paid off by the lobbyists.

But the fact is, regulation aside, the private sector simply went nuts and sold us down the river for short term gain. Even responsible/conservative people have and will be hurt by this. By the time it is over they will have been priced out of the real estate market for over a decade. Their tax money must now bail out the financial mess that others created. They may lose their job because of all of this.

As long as others can f' with my life to this extent I want government to regulate them. I believe in free market but we've proven time and time again that some regulation is necessary to control the greed of others.

For about 20 years we have had a system that encourages executives to take ever more risk for short term gain. As long as we have that situation our economy will never again be stable.

[Fugue]

My point wasn't, how they screwed, my point was that they did screw up.

I think i've been using too many commas lately. I need some government oversight of my punctuation use. :P

[Okla-homey]

Frankly, (pardon he pun) I don't care whose hairy sphincter Frank was penetrating. What bugs the craphell outta me is the lack of outrage in the media and elsewhere over the fact that he and his Donk cronies diddled while Fannie burned.

17 times the W White House went to Congress to point out that Fannie was out of control. Frank wouldn't even give them a meeting.

IMHO, that was a breach of his duty and he should resign. But he won't, because its racist to assert these NINJA* home loans were bad policy, foisted on Fannie and Freddie by social experimenters in the Donk Party. And it could result in blowback on BHO when his lead is already quite slim.

*no income, no job, no assets

[bluedogok]

What bugs the craphell outta me is the lack of outrage in the media and elsewhere over the fact that he and his Donk cronies diddled while Fannie burned.
There are people out there bringing it up, the dominant media just ignores it.


Forbes.com - Lessons From A Crisis (http://www.forbes.com/opinions/2008/10/02/lessons-crisis-bailout-oped-cx_pr_1003robinson.html)
Peter Robinson 10.03.08, 12:01 AM ET

One of the curious features of the financial crisis of the past few weeks is that almost every lesson we think it has produced, it hasn't.

Take the lesson that the crisis arose from a failure to tame the rawer practices of capitalism.

"What happened," as U.S. Rep. Barney Frank recently put it, "was they [the Bush administration] did not regulate appropriately. ... totally abstaining from any kind of involvement in the market."

Even the most casual examination of events proves this view wildly incorrect. By purchasing tens of billions of dollars worth of dubious mortgages, you will recall, Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ) created the market for subprime instruments that caused this crisis.

Why did Fannie Mae and Freddie Mac behave so recklessly? Because they came under intense political pressure to do so--often from the chairman of the House Committee on Financial Services, Barney Frank. In the name of "affordable housing"--a term, we now know, that refers to putting people into homes they cannot afford--Frank leaned on Fannie Mae and Freddie Mac repeatedly. Ignoring credit risks, he declared, was their "mission." When analysts questioned Fannie Mae and Freddie Mac's solvency, Frank exclaimed, in effect, "How dare they?"

"The more people exaggerate a threat of safety and soundness," he said. "Then the less I think we see in terms of affordable housing."

The invisible hand of Adam Smith didn't create this mess. That honor belongs to ham-fisted politicians such as Barney Frank.

Or take the notion that we could solve the crisis by turning it over to such gods of finance as Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke.

The first sign that Paulson and Bernanke were mortals--and confused mortals, at that--emerged during the congressional testimony in which they attempted to explain their bailout plan. Paulson earnestly insisted that the Treasury would purchase subprime instruments in auctions, protecting taxpayers by driving the prices of these instruments down. Meanwhile, Bernanke cheerfully explained that the Treasury would instead "buy assets at a price close to the hold-to-maturity price," recapitalizing the banking system by paying top dollar.

Both men made sense. But they were working at obvious cross-purposes. They conveyed the impression that, just as panicked as anyone else, they were making up their policy on the fly.

What happened next proved that they were. A run on money market accounts began. The Treasury Department hurriedly announced that it would provide virtually unlimited insurance for such accounts. That stopped the run--but started another, prompting huge withdrawals from commercial banks, in which, of course, the FDIC insures accounts only up to $100,000.

Next, the Treasury backtracked, placing strict limits on the new money market insurance. This ended the withdrawals from commercial banks--but not before the world had glimpsed in Paulson and Bernanke a couple of unnerved improvisers.

Or, take the lesson that a massive government intervention in the markets is sometimes so obviously correct and urgent, only hayseeds and House Republicans (who a lot of people consider the same) could possibly oppose the bailout. This putative lesson was overturned when opposition to the bailout emerged among people who are inarguably not hayseeds.

Harvard economist Jeffrey Miron issued a thorough denunciation of the plan.

"One has to be at least a little bit skeptical," wrote Miron's Harvard colleague, economist Greg Mankiw, "about the idea that government policymakers gambling with other people's money are better at judging the value of complex financial instruments than are private investors gambling with their own."

"I totally disagree that this needs to be done this week," said Princeton economist and former Fed Vice Chairman Alan Blinder. "It's more important to get it right."

And the list of economists willing to sign an anti-bailout petition continued to grow, topping 200 this week. "For all their recent troubles," proclaim the signers, "America's dynamic and innovative capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short sighted."

Some version of the bailout, it now appears, is certain to pass. The bill will probably be better than it would have been if Congress had permitted itself to be stampeded into voting for the measure that Paulson and Bernanke originally proposed. The ceiling on FDIC deposit insurance will almost certainly be raised, for example, while the SEC’s adjustment this past week of the mark-to-market rule may receive some legislative support.

But what will we have learned? That the government operates with more wisdom and efficiency than free markets? That the time has come, as columnist Harold Myerson recently put it, for a “new order … in which Wall Street plays a diminished role and Washington a larger one?”

Lord, I hope not. That’s the most important lesson of all not to learn.

Peter Robinson, a research fellow at the Hoover Institution and contributor to RobinsonandLong.com, writes a weekly column for Forbes.com.