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The Spectacle Blog
Say it ain’t so! After doing so much to create the housing bubble and ensuing crash, Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, suggested that there might be a limit to federal subsidies for Fannie Mae and Freddie Mac. That would be quite a change from current policy, which is to continue pouring vast amounts of taxpayer cash into the housing market.
An influential voice on Capitol Hill has unexpectedly called into question the safety of investing in Fannie Mae and Freddie Mac, raising the specter that investors who have lent money to the two firms or bought their mortgage-backed securities could one day suffer losses.
The comments by Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, forced the Treasury Department to issue a statement Friday reaffirming the government’s commitment to the companies, their creditors and their investors.
If investors come to doubt that Fannie Mae and Freddie Mac debt and investments are risk-free, they would demand a higher return — which could ripple across the U.S. housing market and cause mortgage interest rates to rise, depressing demand for homes. The federal government seized Fannie Mae and Freddie Mac a year and a half ago and, since then, has signaled that lending to the companies or buying their investments is just about as safe as putting money into U.S. government debt.
But in an interview Thursday, Frank said, “People who own Fannie and Freddie debt are not in the same legal position as [those who own] Treasury bonds, and I don’t want them to be.”
Frank said he wanted to make it absolutely clear to creditors of and investors in Fannie Mae and Freddie Mac that the companies are not as safe as the U.S. government. As the government considers how to overhaul the mortgage finance giants, he said he would expect “to preserve the right to give people haircuts.”
So horrified was the Obama administration that the Treasury Department issued a statement assuring investors that they could count on the administration’s willingness to rape and pillage taxpayers whenever Fannie and Freddie needed another financial fix. Reported the Associated Press:
While debt from Fannie and Freddie does not carry an explicit government guarantee, the Treasury has taken numerous steps to reassure investors that the government will keep the companies running. Late last year, the Obama administration pledged to cover unlimited losses through 2012 for Freddie and Fannie. So far, the companies have needed $126 billion in taxpayer aid.
“As we said in December, there should be no uncertainty about Treasury’s commitment to support Fannie Mae and Freddie Mac as they continue to play a vital role in the housing market,” Treasury spokeswoman Meg Reilly said in a statement.
Of course, it is hard to believe that a majority of lawmakers would follow Rep. Frank after wasting $126 billion of taxpayer funds already. But he is an influential voice. And his fiscal “born again” experience seems notable.
After all, it was Rep. Frank who last October shrugged his shoulders at the thought of taxpayers taking a bath from Federal Housing Administration guarantees for bad mortgages. Reported the New York Times:
Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that the defaults were, in essence, worth it.
“I don’t think it’s a bad thing that the bad loans occurred,” he said. “It was an effort to keep prices from falling too fast. That’s a policy.”
What’s hundreds of billions of taxpayer dollars wasted if a few constituents are helped, right?
Well, better late than never for a conversion, I suppose. Now if only Rep. Frank can convince the rest of his colleagues as well as the Obama administration!
View all comments (67) | Leave a comment
More Blog Posts by Doug Bandow
http://spectator.org/blog/2010/03/06/rep-barney-frank-a-limit-to-ta
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Pingback| 3.6.10 @ 5:32PM
Rep. Barney Frank: A Limit to Taxpayer Largesse? - Spectator.org » Committee, Fannie, links to this page. Here’s an excerpt:
Floyd Looney| 3.6.10 @ 5:58PM
A campaign to end corporate welfare in all its forms would have support from the grassroots of both parties but also from neither party. I think such a movement needs to be launched now and I think it could grow fast enough to have an effect on the next elections.
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Condor| 3.7.10 @ 12:49AM
Banney fag should start running now before the pitchforks catch up to him...
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Yosemeti Sam| 3.7.10 @ 10:36AM
" Rep. Barney Frank: A Limit to Taxpayer Largesse? ...."
Largesse?
How about GOUGING?
IOW it's taxpayers made to grab the ankles - right
congressman Frankfurter? Something you're
well acquainted with.
Richard Baker| 3.7.10 @ 11:06AM
Barney is trying to save his political white butt come November. Too late, Barney old boy. The country and your district are on to you. Maybe he could re-open the House of Prostitution in his basement that he once said he didn't know was there. Madame Barney, what an image.
Oldefarte| 3.7.10 @ 11:06AM
After recouping my senses after reguritating from the thought of this vile, disgusting, perverted, and corrupt animal; I can only say that he should simply be legally tried, convicted and sent to jail. He, Dodd and other liberals [mostly Democrats] were behind the CRA of 1977 that basically legally allowed banks/financial institutions to be hunting down and attacked by corrupt organizations such as Acorn for not lending money to financially inept loan applicants [and which led to the credit/financial/real estate collapse of today]. Also his male lover/bed mate was an influencial employee at HUD, and together they devised the housing/real estate/banking RAPE of this country. Banks were forced by political pressure to make loans that they never would have made if not for this corrupted pressure. They accompolished over time the disseminating of AFFORDABLE HOMES [what a joke, as they indigents granted loans are now abondoning same in bucket fulls today]. Now these liberal morons are forcing banks to abandon/forego foreclosure procedures upon delinquent/indigent mortgagees; and the American taxpayers are/will have to pay for same [through higher taxes,etc]. It's all about government WELFARE/WEALTH REIDSTRIBUTION---they've gotten over time these indigents installed in houses that they never could afford, and now want to keep them in same [again with taxpayers paying the cost]!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Roy| 3.7.10 @ 3:05PM
After all, why a partial government takeover of the housing market(Fannie/Freddie) when we can have a full government takeover(FHA)?
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MOS was 71331| 3.8.10 @ 10:21AM
Boy, do I despise Barney Frank! That pervert should be in jail, which, from what I've read about activities in many prisons, might be less punishment for him than it would be for heterosexuals.
I remember his response to one constituent who dared to question him about his loan policies: "talking to you is like talking to a table." I just wish the poor woman had responded with another question: "did you pay taxes on your share of the profits from the homosexual prostitution 'escort' service your roommate was running from your rent controlled apartment?"
Margie| 3.8.10 @ 11:07AM
I think a basic requirement for becoming any kind of representative for the country ought to be that you are able to be understood when you speak.
It's embarrassing to listen to Bawney Fwank when he (tries to) speaks.
I mean, my own sister had to go to speech class in elementary school because she said her r's like w's. With a little help she overcame it. What's Bawney's excuse?
Pingback| 3.9.10 @ 9:31AM
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aujam| 5.10.10 @ 7:29AM
I conceive a base responsibility for decent some category of allegoric for the land ought to be that you are healthy to be apprehended when you speak. It's difficult PW0-104 exam to center to Bawney Fwank when he (tries to) speaks. I mean, my possess miss had to go to style collection in easy edifice because she said her r's alike w's. With a lowercase support she overcame it. What's Bawney's excuse? 156-215 exam
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