THANK GOD ! Barney Frank makes it all clear now. I'm sure Chris Dodd agrees
with him. he he he

cm


"Frank Boettcher" wrote in message
...
On Sat, 04 Oct 2008 02:19:34 GMT, "Lew Hodgett"
wrote:

Swingman wrote:

What do you expect after the yes vote for the biggest boondoggle in
this country's history today.

You best hope it works, there doesn't appear to be a 2nd shot.

Think of it as payback for almost 30 years of Reagan's "Trickle Down"
BULL ****.

Lew

Think what you want, don't confuse yourself with any facts.

from the boston globe- as liberal as it gets



*
'THE PRIVATE SECTOR got us into this mess. The government has to get
us
out of it."
Discuss
COMMENTS (355)

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 we "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.

Jeff Jacoby can be reached at .
© Copyright 2008 Globe Newspaper Company.
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