Tuesday, November 29, 2011

Loved by media, Barney Frank Helped Cause Financial Crisis

Source: http://news.investors.com/Article/593006/201111281824/liberal-frank-leaves-legacy-of-financial-failure.htm


Congress: Establishment media are swooning over the unexpected departure of ultraliberal Barney Frank. But this "champion of the little guy" actually helped cause the mortgage disaster, then kept the system broken.

'Congress will now be a little dumber," was the kind of nonsense we heard from the mainstream liberal media after Frank, D-Mass., former chairman of the House Banking Committee, said no to running for re-election next year.

Formally reprimanded by a heavily Democratic House on a 408-to-18 vote in 1990 for ethics offenses regarding his financial relationship with a male prostitute, Frank has for decades been a fast-talking, acidic presence in House debates.

But he wasn't smart enough to realize that the politically correct poisoning of mortgages would lead to a calamity rivaling the Great Depression. "I, like many others, did not see the crisis coming," Frank said Monday.

He sure didn't. Back in 2003, what did he say when the Bush administration proposed what the New York Times described as "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago," including a new agency to supervise Fannie Mae and Freddie Mac?

Frank said: "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Fannie and Freddie, of course, are those corrupt public-private hybrid monstrosities that gave lots of mortgages to people with horrendous credit ratings.

After 1996's welfare reform, liberals like Frank found other ways to redistribute wealth. Yet even after the politicization of mortgages led to the financial crisis, last year's Dodd-Frank reform kept "too big to fail" and other defects in our federally mismanaged banking system.

Manhattan Institute scholar and "After the Fall" author Nicole Gelinas warned before Dodd-Frank's passage that the law "encourages wild risk-taking — and penalizes prudence" by making well-run banks pay to bail out poorly run ones.

As a result, Gelinas said: "Every firm will take more risks, guaranteeing another crisis down the line, and more taxpayer bailouts."

The media would have us believe this is the departure of a great statesman. But as the 17th House Democrat to announce his departure, Frank becomes just another liberal who realizes his party has little chance of winning in 2012 after the mess they've spent the economy into.

With Frank's district newly re-carved after the 2010 Census, Sean Bielat, the smart ex-Marine who gave him a run for his money in 2010, might just win this time.

Making sense of Barney Frank's departure isn't hard. A once-powerful liberal who loved to make congressional witnesses look dumb, he leaves a legacy of failure that, with time, makes him look dumber and dumber.