Frank: Criticism of Congress is now racist, too

posted at 9:00 pm on October 6, 2008 by Ed Morrissey

Barney Frank’s latest defense of Congress over the financial meltdown could be predicted based on the success of Barack Obama’s campaign in using the same defense.  According to Rep. Frank, any attempt to pin the blame for the collapse of Fannie Mae and Freddie Mac on the activities of both, as well as Congressional policy that fueled it, is now officially racist.  Frank says conservatives want to blame minorities for the collapse:

Frank charged that conservatives aim to shift blame for the market meltdown away from Wall Street and toward minority-lending laws like the federal Community Reinvestment Act.

“The bizarre notion that the Community Reinvestment Act . . . somehow is the cause of the whole problem, (conservatives) don’t mind that,” the lawmaker said. “They’re aware that the affordable-housing goals of Fannie Mae and Freddie Mac (and) the Community Reinvestment Act (aim to help) poor people. And let’s be honest, the fact that some poor people are black doesn’t hurt either from their standpoint.”

Let’s keep score.  Criticizing Obama means we’re racists.  Criticizing Congress means we’re racists.  Getting angry at Congress for pushing Fannie Mae and Freddie Mac into buying bad loans and infecting the entire financial system with essentially fraudulent paper — at a cost of up to $700 billion in taxpayer money and potentially trillions in lost investments — means we’re racists.

The CRA was only a small part of the cause of the collapse.  It affected loans only at the margins.  The Clinton administration opted for more aggressive enforcement, and “community organizers” like ACORN used that to file nuisance complaints that could keep banks from merging and acquiring other banks.  That may have pushed lenders into lowering standards on a handful of loans, but only to enough of an extent to avoid government sanctions.

In that sense, the CRA is a bit of a red herring.  The real cause of the collapse was the Congressional push for Fannie and Freddie to support subprime lending by purchasing the paper from lenders, which is related to the same policies that generated the CRA but isn’t the CRA itself.  Lenders make money one of two ways: keeping the paper themselves and getting the interest over the term of the loan, or selling the paper to someone else for a guaranteed short-term profit.  When Fannie and Freddie began buying all of this paper, they created a huge demand for subprime loans — and lenders responded by offering easy money to almost anyone who applied.  They threw out income requirements and equity thresholds (such as down payments) and generated tremendous short-term profits for themselves … while Fannie and Freddie assumed all the long-term risk.

Had the risk remained at Fannie and Freddie, the problem would never have gone beyond their collapse.  Unfortunately, Congress also pushed the GSEs to securitize the debt in order to spread the risk.  Investors considered those mortgage-backed securities a safe bet, backed by the US government.  That’s the direct cause of the financial collapse, along with the collapse of housing prices that resulted from the sudden deflation of demand.

Congress — and specifically Frank himself — had plenty of warning that this would happen.  The anger generated from that information has nothing to do with racism, and everything to do with the breach of trust between Congress and its constituents.  Frank, Chris Dodd, and others like Lacy Clay and Maxine Waters tried the racist meme out on regulators who tried to warn Congress of the pending collapse.  They have to smear their critics.  They certainly can’t admit that Congress failed spectacularly.   Racism is the last refuge of scoundrels in 2008, and not surprisingly, we find most of those scoundrels in the Democratic Party.


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Comments

SpecialK(y) I also notice that the Barack Gold Boot Youth have yanked their initial video….

if it is/was such a wholesome activity that does no harm to THE ONE why owuld they do that?

sven10077 on October 7, 2008 at 7:25 AM

Bill O’Reilly is 100% correct about Barney Frank. The goof is a dirty yellow coward who has now proved to the world that there is absolutely no low he will not strive to stoop to, including making it look like criticism as to what happened to Freddie and Fannie Mac is racism. There is not one single decent bone in this clown’s body, so why is he still in the position of power that he is currently stinking up all over the place? Frank is a complete disgrace in the purest sense of the word!

pilamaye on October 7, 2008 at 7:28 AM

sven10077 on October 7, 2008 at 7:23 AM

Like Obama you manage to dodge the central questions.

Epic post? What are you auditioning for? Only Obama uses the word epic when referring to himself. Are you beginning to see the light now? And you think Obama will bring in the black helos to catch you writing an epic post?

Get some air and go into the real world a couple of times a week. You’ve lost perspective.

Bradky on October 7, 2008 at 7:29 AM

Racist? Everybody I know who has been a part of the Sub Prime mess as a recipient of a sub prime loan is white. I still think the whole concept was damn-foolish. I, myself, tasted an adjustable rate mortgage before the real sub-prime thing came up. It took very little thinking to figure out it was, long term, a very bad idea. So when I refinanced I got a full 30 year fixed rate mortgage. “It ain’t gonna happen to me.”

herself on October 7, 2008 at 7:30 AM

On a second point note that with the irregularities on the part of Frank, Waters, and others and especially Dodd the Democrats MUST win. If they don’t it means their careers are busted. And in some cases they visit club fed for corruption. If Obama wins, they get pardons as needed.

herself on October 7, 2008 at 7:32 AM

Like Obama you manage to dodge the central questions.

Epic post? What are you auditioning for? Only Obama uses the word epic when referring to himself. Are you beginning to see the light now? And you think Obama will bring in the black helos to catch you writing an epic post?

Get some air and go into the real world a couple of times a week. You’ve lost perspective.

Bradky on October 7, 2008 at 7:29 AM

I work a job or two depending on the season and am taking a locksmithing course….

I happen to have a schedule thanks to the loving graces of the US Army that has me sleeping in two three hour splits. I don’t drink, don’t smoke and am home raising a child when not on the clock during the school day. I am seriously touched you are so concerned about my economic and mental well-being. As a “concerned Christian conservative who has heretofore always voted GOP but just can’t bring yourself to vote for McCain” I am certain you have an overwhelming sense of mercy thumping around in there…..

as far as “Epic” well I had people from 4 boards compliment it but again do go on.

I used to think little sandboxes like this could make a difference.

sven10077 on October 7, 2008 at 7:37 AM

FDR’s policies were very much responsible for the length of the GD.

Prior to the GD no US downturn had lasted more than three years, and NEVER in US history had a “depression within a depression” occured.

Economies are NOT “car motors” subject to a wrench turn here and a minor tweak there….

One of the myths about the “cause”(as if one thing caused it)of the GD is that it was out of control capitalism and the collapse of the stock market over the course of two weeks in October. People who subscribe to this view are ignoring the contraction of money, idiotic overregulation of banks, and increasing of tariffs, and they are WILLFULLY ignorant of the true interventionist nature of Hoover. Hoover has been trasformed by the mythmakers who worship FDR into this cowering icon of laissez-faire and NOTHING could be further from the truth.

The so-called “progressive” movement was sheltered in its infancy by another Roosevelt in another party and Hoover was a TR type Republican. Hoover was the true father of “Alphabet Soup and the new deal” as evidenced by his establishment of the Reconstruction finance Corporation during his admin-hardly the act of either a laissez-faire believer or a ‘lazy do-nothing President’.

The RFC extended loans to smaller town banks and was kept on as a cornerstone of FDR’s admin. The problem is that the RFC was used as a political tool as much as a recovery based one. Jesse Holman Jones was notorious for using RFC assets to extend loans to “persons of interest” in regions and then inform them of what types of legislation would affect the RFC.

Hoover was anything BUT a laissez-faire man. He was responsible for the WW1 version of the “Marshall plan” whereby we aided Belgium through his Commission for the Relief of Belgium. He also arranged for the transport of 120,000 or so Americans back from Europe.

He had seen the Wilsonian war measures not as an indicator of the sacrifices the economy must make during wartime, but as a harbinger of a “better way to do things”. Hoover had intimate dealings and knowledge of the various war boards including(but not limited to) the War Finance Corporation, the War Industries Board, and the war trade Board. Hoover along with many who served in Wilson’s wartime administration were the ultimate believers in the power of the US government towork miracles in the time of emergency.(a shaky proposition given the low percentage of national industrial base that was required to do our part in WW1)

Hoover was also a huge believer in the “high wages can get us out of ANY downturn” school of thought that was prevalent at the time. The fact that this doctrine is now considered akin to a Grimm’s fairy tale makes it hard to grasp how much sway the notion had at that time. For all the Unionite bluff and bluster about “Henry Ford the demon” he was the original proponent of this school of thought in heavy industry always paying at least 75% higher than the prevailing wage and often paying double. The trouble was that these higher wages resulted in higher costs for the product…..(do a google and see how long you could buy a new model-t for under 500 bucks)

Several noteworthy economists of the era(and not Chiteng brand historian ones either) defended this notion. Hoover was not the master orator Roosevelt was, but he was far from the crippled foal the FDR legions portray. He called several conferences of industrial leaders and encouraged them to maintain high wages. Hoover believed that the massive money contraction policies of the Fed would and should hit profits rather than wages, and he told this to Henry Ford, Alfred Sloan, and others.

The problem was that Hoover’s efforts to maintain wages above the market was a disaster-as John T. Flynn noted in the Jan 1933 issue of Harpers, “prices must come down to bring goods closer to the size of available income…..income itself must be freed for purchasing by the extinguishments of excessive debts. Whether we like it or not, this is what takes place. Any attempts to hold up prices or save the weaker debtors necessarily prolongs the depression.” The inherent fallacy of the purchasing power school is that it doesn’t increase total purchasing power-it merely concentrates it in the employee base. The employees have more money to spend but the business and investors have less. All the policy accomplishes is an alteration in the distribution of revenue, not in the total purchasing power of an economy.

Hoover was also the Godfather of governmental spending as a panacea to boost the economy out of a downturn. He urged Gubenatorial and Municipal governments to engage in as many public works projects as he could. The governor of New York pledged his support-his name Was franklin delano roosevelt.(the funny thing is not a lot came of this because the majority of state and city budgets had other duties but the point here is that Hoover was hardly the “lapdog of the wealthy” people like to remember him as-also public works require folks with construction skills not unskilled laborers who were the hardest hit sector)

Hoover seldom met a farm subsidy he didn’t like, but the root of the matter was that too many farmers were tilling too many acres and the traiff warfare the politicos of both sides engaged in in that day meant that we had no ability to shunt excess production. This happened because of alteration to the European market made by WW1-Russia was not in the farming business and the wheat had to be made up by the US, Oz and Canada. This market condition was given a bodyblow as European production came back online as the recovery from WW1 progressed, the result of many European nations erecting massive tariffs to “protect our domestic farmers” was that their markets were now effectively closed to the overproduction of the nations that had fed them during the war.

Farmers are a powerful lobby and they exerted pressure for subsidization to avoid as many cutbacks as possible. They continued to be burdened with overproduction and low price structure throughout the 20s. In 1926 Coolidge agreed to have the US purchase excess cotton in order to maintain the high price of cotton-the guy who did it for him? hissecretary of commerce Herbert Hoover. By 1930 Congress was was authorizing the Federal Farm Board to increase subsidiztion by about 100 million-hardly the act of a laissez-faire champion of unfettered capitalism.

In 1929 Hoover asked for higher Tariffs on agricultural tariffs and the House way and means men listened. Of course it was becoming increasingly evident that you couldn’t isolate such high tariffs to one sector of the economy. EVERY sector wanted higher tariffs on their products.(now why is this ah yes it allows the artificial boosting of higher prices for inferior product) As a lobbyist for Big Silk said in his testimony, “I have never felt that it was a consistent position for one man to try and advocate duties for his own products and object for duties for another person.” by the time the hearings were over the record had 20,000 pages of testimony.

The result of this was the famed Smoot-Hawley Tariff which raised import duties an average of about 60% on more than 25,000 agri commodities and manufactured goods-happy days are here again! The US stock market took a plunge the day after it was signed on June the 18th(remember Black Tuesday and Thursday were a half year old but the market had recovered to 85% of peak at the time) It seems that 60 countries decided that Smoot-Hawley was two steps shy of an act of war and retaliated by targeting those goods that they felt would impact America hardest, and that was not the reciprocal goods of the tariff but other products thus damaging random and disparate businesses here in the US.(a panic set in)

Nothing like pissing off neighbors who are in debt to you and denying them a market to attain the wealth they needed to make the payments on their war debt eh?

We decided that Canada needed to take a hit in EVERY major export they had. Halibut, Potatoes, cattle, wheat, and lumber. Hoover managed to deliver body blows to every province in Canada, but why stop there let’s screw the English too(who at that time were the ultimate champions of free trade and free markets not us). The British unleashed the Import duties Act(of 1932) that was their first general tariff in 100 years, and part II specifically penalized nations with penalties on British goods by a 100% duty(like the US).

Thing was….the stupidity that led to the worldwide implosion of economies was largely a bipartisan effort…..

If you’d like I could go on, but Chittles although outgunned will hardly be impressed….

see all my knowledge is “just there to pad my bias” after all…..

http://www.madcowssteakhouse.com/viewtopic.php?p=177870&highlight=smoothawley#177870

sven10077 on October 7, 2008 at 7:38 AM

sven10077 on October 7, 2008 at 7:25 AM

Dummy! because the teacher who got fired for posting it probably was asked to pull it.

Not everything is a vast left wing conspiracy…. saaaay isn’t that is your second cup of coffee. Careful a third cup is not healthy.

Bradky on October 7, 2008 at 7:39 AM

On a second point note that with the irregularities on the part of Frank, Waters, and others and especially Dodd the Democrats MUST win. If they don’t it means their careers are busted. And in some cases they visit club fed for corruption. If Obama wins, they get pardons as needed.

herself on October 7, 2008 at 7:32 AM

Bingo…

They usually gin up between 2-5% in fraud unless I miss my guess….look for 5-8% this go around….

any investigations will, of course, be “racist”….

sven10077 on October 7, 2008 at 7:41 AM

I think HA has a manifesto tax on 10,000 word pieces.

Bradky on October 7, 2008 at 7:41 AM

Dummy! because the teacher who got fired for posting it probably was asked to pull it.

Not everything is a vast left wing conspiracy…. saaaay isn’t that is your second cup of coffee. Careful a third cup is not healthy.

Bradky on October 7, 2008 at 7:39 AM

Brad darling that the teacher(unnamed) was “fired” should be immaterial if it was “such a healthy thing for the campaign”….

Fact is Barry’s backers got caught with their hands in the cookie jar again just like fraudulent sub 200 buck donors. I never said there was a dark conspiracy I am mocking your Machts Nichts decorum on political indoctrination as part of a school curriculum. Considering the donks spend their time decrying non-partisan civics classes in some locales their use of kids in campaign material is pretty funny.

I drink Milk with Hershey’s lite syrup for breakfast….

am also about ready to hit the treadmill after I take lad to school and then dropping by my shop.

You have any other helpful advice while you either march proudly into worker’s paradise or put your blinders back on?

sven10077 on October 7, 2008 at 7:45 AM

I think HA has a manifesto tax on 10,000 word pieces.

Bradky on October 7, 2008 at 7:41 AM

I suspect you and I have differeing definitions of “manifesto”, and while you may be satisfied with “Hoover was t3h suckz, FDR roxxorz” I tend to think the subject demands a little more analysis given a large part of our current mess can be traced directly back to the dying embers of FDR’s activism on the economy.

sven10077 on October 7, 2008 at 7:47 AM

Well, what else does this dim-witted, syphilitic, ugly little corrupt pervert have?

Frank can’t say that he knows what he’s doing. Everyone knows that’s not the case.

He can blame it on the idiot Democrat leadership for putting a fecal matter encrusted little troll like him in charge of something he knows nothing at all about. That would bring heat from above.

So he relies on the ol’ shopworn excuse of racism.

Although in his case, it’s trollism.

NoDonkey on October 7, 2008 at 8:21 AM

I wasn’t really paying much attention to FOX this a.m. but thought I heard that there is some poll out that indicates a majority of Americans believe that we could get a more effective Congress by just pulling names out of a phone book. Makes sense to me.

sdd on October 7, 2008 at 8:41 AM

So as Rome burns Frank is fiddling around with the fiddler. Apparently his boyfriend (Herb Moses?) was an executive with Fannie Mae. Which opens up the definition of receiving “favors”.

These back door politics have to stop…

right2bright on October 7, 2008 at 8:44 AM

Democratic Senate + Democratic House + Democratic President = Massive coverup of bailout causes.

Star20 on October 7, 2008 at 8:44 AM

Criticizing Obama means we’re racists. Criticizing Congress means we’re racists. Getting angry at Congress for pushing Fannie Mae and Freddie Mac into buying bad loans and infecting the entire financial system with essentially fraudulent paper — at a cost of up to $700 billion in taxpayer money and potentially trillions in lost investments — means we’re racists.

Welcome to the new reality. If Obama wins, we will melt down into a leftist dictatorship because to criticize him (and now, apparently, the Dem congress) is racist, and there are only too many in the MSM who will be willing to destroy lives by pinning the racist label on anyone and everyone who dares question the One.

We have dark days ahead of us. I’m convinced of that now.

crazy_legs on October 7, 2008 at 8:45 AM

Great Barney.

We’re in a monetary crisis of epoch proportion, and all you can think about is your fat, socialist, committee chairing ass.

Face it Frank. You’ve got your dirty little fingers all over this mess, so much that even the MSM will not be able to save you.

So you turn to the only refuge that the Left knows when their back is against the wall–using black America in the most sinister, self serving way.

Do you think this current crisis is helping blacks, Barney? Admit it, you love this crisis, because you can run out there and pretend you’re helping them again.

You truly are a detestable human being.

Saltysam on October 7, 2008 at 8:54 AM

CRA pushed banks to loan to less qualified people on suspect income and identity documentation. The same rules were applied to speculators buying 2, 3, or more investment houses. Ergo, CRA caused this problem.

Vashta.Nerada on October 7, 2008 at 9:20 AM

The whole case against Barney Frank and the Democrats laid bare in these posts are ABOSOLUTELY true, but will never be put forth to the American people. Basically all of the damning evidence I’ve personally read since the “collapse” of our economy has been wasted venting on conservative blogs (some of it has been shown on FOX NEWS).

The MSM is covering for the Dems by generally saying responsibility lies with both parties but also implying that Republicans are mostly responsible as they are the party of deregulation. Total, complete, indisputable LIE!!

So what do we do? We retreat to our blogs and preach to the choir. We must find a way to break through the wall of protection thrown up by the MSM and popular culture and start getting the real facts directly in the hands of people who don’t view blogs or stay up late watching cable news. I’m just saying most people are casual followers of the issues and the only facts they are getting goes through a dem-friendly filter. For some reason McCain-Palin refuse to bring it up even in the debates. I guess we will see tonight.

Goodeye_Closed on October 7, 2008 at 9:30 AM

Impeach Barney Frank and Chris Dodd, and while we’re at it, let’s throw Hussein Obama into the mix. Two whites and a half white doesn’t seem racist to me…..

adamsmith on October 7, 2008 at 9:38 AM

Is it called Fannie because…well…that’s where Barney enjoys it?

sabbott on October 7, 2008 at 9:41 AM

Sorry, that was clearly racist of me…

sabbott on October 7, 2008 at 9:42 AM

Racism is the last refuge of scoundrels in 2008, and not surprisingly, we find most of those scoundrels in the Democratic Party.

I agree with the first part of the sentence, but I know I’ve seen more than once the argument that permitting women the choice to have an abortion is racist because black women chose to have abortions.

thuja on October 7, 2008 at 10:28 AM

When Barney Frank was asked who his biggest supporters and donors were he remarked “I don’t know, I don’t have eyes in the back of my head”…

right2bright on October 7, 2008 at 10:29 AM

Criticism of Congress is now racist not allowed

I thought you all knew better…unless a Republican is being criticised

NoFanofLibs on October 7, 2008 at 11:03 AM

I swear to God that if the people do not rise up to condemn this action by Obama’s team and now Congress, I fear the people are zombie’s. I hope they vote AGIANST “crying wolf”

Mercy4Me on October 7, 2008 at 11:38 AM

“They’re aware that the affordable-housing goals of Fannie Mae and Freddie Mac (and) the Community Reinvestment Act (aim to help) poor people. And let’s be honest, the fact that some poor people are black doesn’t hurt either from their standpoint.”

Gee, I honestly never equated “poor people” with “black people” and I grew up in a town that’s about 35 miles from Capitol Hill. Maybe Barney should get out of the Boston suburbs — or quit hanging around Dupont Circle — and experience a dose of reality.

Putz.

Y-not on October 7, 2008 at 11:49 AM

Off topic: from that picture and others I’ve seen it looks like Mr. Frank’s lips have been completely worn away. What happened to that poor guy?

DarkCurrent on October 7, 2008 at 11:59 AM

Off topic: from that picture and others I’ve seen it looks like Mr. Frank’s lips have been completely worn away. What happened to that poor guy?

DarkCurrent on October 7, 2008 at 11:59 AM

In the interest of decorum, I hate to speculate. Probably the peddlers of soft porn at Ace of Spades have a theory! ;-)

Y-not on October 7, 2008 at 12:16 PM

I still find his photo disturbing – Pleeeese remove it -my eyes! my eyes!

Fuquay Steve on October 7, 2008 at 5:12 PM

Off topic: from that picture and others I’ve seen it looks like Mr. Frank’s lips have been completely worn away. What happened to that poor guy?

DarkCurrent on October 7, 2008 at 11:59 AM

So many avenues…so little time…

sabbott on October 7, 2008 at 7:26 PM