Wednesday, June 24, 2009
Well, At Least Barney Frank Is Consistent
This from today's Wall Street Journal:
Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to "roll the dice" in the name of affordable housing. That didn't turn out so well, but Mr. Frank has since only accumulated more power. And now he is returning to the scene of the calamity -- with your money. He and New York Representative Anthony Weiner have sent a letter to the heads of Fannie and Freddie exhorting them to lower lending standards for condo buyers.
We're doomed.
Doomed... doomed... doomed...
(And do you think the average American who neither reads the Wall Street Journal nor checks in here at Usually Right is going to hear about this...?)
Well... Congressman Frank is scheduled to appear on O'Reilly tonight so we'll see. Perhaps Fox News will amplify the Journal's warning, but what are the odds that the Mainstream Media will point out the obvious - that history is about to repeat itself with regard to Fannie Mae and Freddie Mac?
God help this once great nation.
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3 comments:
What amazes me sometimes is the lack of understanding of adults about cause and effect which then influences their choice of problem-solution.
Every action has a reaction (for every cause there is an effect)
Condos were overbuilt duing the bubble. When bubble burst, condo supply contributed to driving down housing and rental prices.
In order to reduce supply and restore balance, condos must be sold.
In order to sell condos, buyers have to be incentivized because houses sell before condos and there remains a significant supply of houses.
So the buyers of condos must come from the ranks of non-house buyers (second home buyers and first time home buyers).
You can incentivize both groups by controlling interest rates, creating a tax advantage, or providing subsidies.
If you lower standards, you move stock, but you create a bow wave effect that will come home to roost at some future date when those lower standard buyers are unable to make their mortgage payments.
This is almost Econ 101, but people like Frank don't get it. Of course our reps are hard pressed to be experts in everything but they ought to at least be able to hire decent staffs who can explain it to them.
I'm not so sure that Frank "doesn't get it."
I fear he does.
(*SHRUG*)
This is where human nature - particularly the common character flaw of over-selfishness... gluttony... greed... comes in.
Midcon. Look at it from Frank's perspective - his selfish, self-serving perspective:
What does Frank care about the good of the nation...??? What does he care about what works, what doesn't?
I mean... supporting Left wing economic policies is largely what has gotten Frank where he is today - one of the most powerful members of Congress.
He's 69 years old. The Huns aren't coming to sack Washington next week or next month. No matter how bad the economy gets Frank is going to remain rich and powerful.
(*SHRUG*)
Say what you will of Frank, he's clearly a bright guy, one of the best, most effective debaters in American politics.
Could Frank have risen as far as he has supporting the "right" policies? Not within the Democratic Party. And certainly when you bring his foreign policy views and social views into the mix it's clear he was never going to become a Republican.
So, we're left with either thinking Frank is simply stupid - low IQ stupid - or else he's "crazy" like a fox.
Well... in either case... (*SIGH*)... it's the nation - and folks like you and me - who will pay the freight and suffer the consequences.
God help this once great nation.
BILL
Actually, while I don't agree with the existence of Fannie or Freddie, I have to say what Frank is asking for here is reasonable (from the Examiner.com):
Fannie Mae made the decision in March to no longer guarantee condo mortgages in buildings where less than 70 percent of the units have been sold. Freddie Mac is planning on enforcing similar measures next month.
Frank and Weiner asked the two companies to “make appropriate adjustments” since the 70 percent threshold, up from 51 percent, "may be too onerous."
That said, this amounts to rearranging deck chairs on the Titanic.
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