Debunk Help Please

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print

Apparently this article is making the rounds as fact that Bush Admin wanted more regulatory control and the Democrats balk. Was there a sinister motive by the Bush Admin?

:shrug:

A Department of Homeland Security for finances?

Uh-oh!

We're on some kind of mind meld here CRS

:hi:

The linked article in the OP was from September 2003

But had we listened to John Snow in September 2003, we may not be where we are today, in September 2008. Worthless (or worth much less than originally thought) mortgages were the catalyst for the entire meltdown. The provisions mentioned certainly would have helped stem the flow of red ink:

1) The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies.
2) It would exercise authority over any new lines of business
3) It would determine whether the two are adequately managing the risks of their ballooning portfolios.

As we can all see now, Fannie Mae and Freddie Mac did not adequately manage the risks in their portfolios.

"Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said."

Re: Debunk, lets not bend over backward to 'prove' that EVERYTHING reps do has ALWAYS been bad; real waste of energy.

http://www.house.gov/apps/list/press/financialsvcs_dem/press090808.shtml

“The truth is when President Bush took office, and the Republicans controlled both houses of Congress, he did not make any progress on comprehensive legislation to reform the regulation of the Government Sponsored Enterprises. It was not until 2005, when the House, on a bipartisan basis, and over the President’s objections finally passed a reform bill. It died in the Senate in part because the White House’s failure to make it a priority.

“In 2006, when the Democrats regained control of Congress, House Democrats made it one of our highest priorities, and passed a bill in May 2007. Finally, a full year later, as the financial crisis worsened, the Senate passed and the President signed GSE reform.

“It is unfortunate that ideologues in the White House who opposed common sense regulation did not join Congress early enough to help prevent the financial firestorm that now threatens the entire economy.”


His defense rings pretty hollow, though, when scrutinized. Barney Frank threatened to filibuster the plan unless it contained a provision to divert 3.0% - 3.5% of Fannie & Freddie profits to provide housing assistance to low income borrowers. Why hold up such an important piece of legislation for that reason? The housing assistance could have been attached as a rider to an Iraq War funding bill to assure passage if it was really that important.

Really think he/they was/were killing the good to make way for the perfect?

However, the lobbying muscle of Fannie & Freddie was well known throughout Washington. The other options for blocking the legislation would cast Frank and others in a much less favorable light, probably to the point of nefarious or shady implications. I don't think Barney Frank is either one of those things. Whatever the reason, he was wrong on this issue, and it has turned out to be more costly than anyone could've imagined at the time.

The Wall Street Journal ran an editorial about Frank and Fannie/Freddie on Sept 9. No doubt it is partisan, but he has undoubtedly been one of Fannie/Freddie's most vociferous defenders.

Here's the WSJ editorial:

http://online.wsj.com/article/SB122091796187012529.html?mod=googlenews_wsj

And here's Frank's reply to same:

http://online.wsj.com/article/SB122162063022546651.html?mod=article-outset-box


Decide for yourself. I have to wonder why Frank made no mention of the regulatory overhaul that was originally proposed in September 2003 (the one in the OP of this thread).

What a pleasure to have info sufficient to understand not only the issues, but also the players and their points of view.

anything about it.

Democrats couldn't of blocked it by themselves.

So no, not debunked.

Edit to add: That would be like someone asking if the Democrats wanted to cut off Iraq War funding in 2007 and someone said "Democrats had the House & Senate in 2007 and didn't cut off funding so no, they didn't want to cut off funding."