Howard County Maryland Blog

Local Politics and Current Events

Barney Frank Responds

Posted by David Keelan on Tuesday, October 7, 2008

And what does the Congressman have to say about accusations that the Democrats contributed as much to the current financial crisis as everyone else on Wall Street and the other end of Pennsylvania Avenue did?

Republicans are racists.

Other than that it is a good defense for a sound bite. Then again, Barney knows the ropes.

BOSTON (AP) – Rep. Barney Frank said Monday that Republican criticism of Democrats over the nation’s housing crisis is a veiled attack on the poor that’s racially motivated.

The Massachusetts Democrat, chairman of the House Financial Services Committee, said the GOP is appealing to its base by blaming the country’s mortgage foreclosure problem on efforts to expand affordable housing through the Community Reinvestment Act.

He said that blame is misplaced, because those loans are issued by regulated institutions, while far more foreclosures were triggered by high-cost loans made by unregulated entities.

“They get to take things out on poor people,” Frank said at a mortgage foreclosure symposium in Boston. “Let’s be honest: The fact that some of the poor people are black doesn’t hurt them either, from their standpoint. This is an effort, I believe, to appeal to a kind of anger in people.”

Frank also dismissed charges the Democrats failed on their own or blocked Republican efforts to rein in the mortgage companies Fannie Mae and Freddie Mac. The federal government recently took control of both entities.

House Minority Leader John Boehner of Ohio called Frank’s remarks “a lame, desperate attempt to divert Americans’ attention away from the Democratic party’s obstruction of reforms that would have reined in Fannie Mae and Freddie Mac and helped our nation avoid this economic crisis.”

“Congressman Frank should retract his ridiculous statements and start taking responsibility for the role he and other top Democrats played in putting Main Street Americans in this mess,” Boehner said.

Frank said Republicans controlled Congress for 12 years and passed no regulation, while Democrats passed a Bush administration Fannie and Freddie regulation package since gaining control of the House and Senate in January 1997.

“If I could have stopped a Republican bill during the Bush years, I would have started with the war in Iraq. Then I would have gone to the Patriot Act. Then I would have gone on to the hundreds of millions in tax cuts,” said Frank, to applause from the audience.

The longtime congressman is being challenged this fall by both Republican and independent candidates. He has been criticized in his liberal district for being one of the leaders of congressional efforts last week to win approval of a $700 billion Wall Street bailout plan.

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5 Responses to “Barney Frank Responds”

  1. Titor said

    Its time to FIGHT! Strike back against these media weapons of mass distortion!

  2. General Zod said

    Republicans are not racists. They just don’t care. There is a difference.

  3. David W. Keelan said

    Zod,

    You are sooo wrong.

    You are sooo insulting that you probably don’t even care.

    Your comment reveals an unwillingness to look at the basis of differences between republicans and democrats. It is contrary to your usual insightful commentary, and the curiosity that you typically exhibit.

    Democrats do not care any more or any less than anyone else.

  4. cynthia vaillancourt said

    I suspect this election will clarify that both parties have their share of “racists” … people who don’t think of themselves as racist, or even have conscious discriminatory thoughts, but when it comes right down to it, they just won’t be able to bring themselves to vote for a half black man… or they can’t quite picture Michelle Obama as first lady. I’m not talking about folks who would have voted republican anyway … but people who would rather not vote for John McCain for whatever reason but still won’t vote for Obama.

    cv

  5. Geneal Zod said

    Sometimes the truth hurts. The current Republican Party represents big business. They hide behind behind divisive issues such as abortion, guns and religion because when it comes down to it they are not for the middle class that is how they have managed to win since the mid 90’s. If you look at the big picture it’s red states that typically benefit from social programs not the blue ones. People who consider themselves Republican typically vote against their interest because they have been brainwashed by the RNC.

    http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis

    As for the CRA.

    “The evidence strongly suggests the latter. First, consider timing. CRA was enacted in 1977. The sub-prime lending at the heart of the current crisis exploded a full quarter century later. In the mid-1990s, new CRA regulations and a wave of mergers led to a flurry of CRA activity, but, as noted by the New America Foundation’s Ellen Seidman (and by Harvard’s Joint Center), that activity “largely came to an end by 2001.” In late 2004, the Bush administration announced plans to sharply weaken CRA regulations, pulling small and mid-sized banks out from under the law’s toughest standards. Yet sub-prime lending continued, and even intensified — at the very time when activity under CRA had slowed and the law had weakened.

    Second, it is hard to blame CRA for the mortgage meltdown when CRA doesn’t even apply to most of the loans that are behind it. As the University of Michigan’s Michael Barr points out, half of sub-prime loans came from those mortgage companies beyond the reach of CRA. A further 25 to 30 percent came from bank subsidiaries and affiliates, which come under CRA to varying degrees but not as fully as banks themselves. (With affiliates, banks can choose whether to count the loans.) Perhaps one in four sub-prime loans were made by the institutions fully governed by CRA.

    Most important, the lenders subject to CRA have engaged in less, not more, of the most dangerous lending. Janet Yellen, president of the San Francisco Federal Reserve, offers the killer statistic: Independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts. With this in mind, Yellen specifically rejects the “tendency to conflate the current problems in the sub-prime market with CRA-motivated lending.? CRA, Yellen says, “has increased the volume of responsible lending to low- and moderate-income households.””

    Now lets turn the conversation to Phil Gramm and some leading Democrats including Bill Clinton. I’m sure you have heard of the Gramm-Leach-Bliley Act and the Glass-Steagel Act.

    http://www.newsreview.com/reno/Content?oid=868401
    “President Clinton and his fellow Democrats did not agree. At the signing ceremony, Clinton said, “Today I am pleased to sign into law S. 900, the Gramm-Leach-Bliley Act. … Removal of barriers to competition will enhance the stability of our financial services system. Financial services firms will be able to diversify their product offerings and thus their sources of revenue.”

    Also at that ceremony, Republican Sen. Gramm of Texas, the principal sponsor of S. 900, issued a statement: “In the 1930s, at the trough of the Depression, when Glass-Steagall became law, it was believed that government was the answer. It was believed that stability and growth came from government overriding the functioning of free markets. We are here today to repeal Glass-Steagall because we have learned that government is not the answer.””

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