Barney Frank, Savior of Homeowners - The American Spectator | USA News and Politics
Barney Frank, Savior of Homeowners

Washington is just so … so … so Washington!  The Left is falling all over itself positioning itself as defender of homeowners against evildoers seeking to foreclose on houses the buyers can no longer pay for.  Never mind that many our current economic problems derive from the artificial bubble that has burst, and only a painful price adjustment downward is going to allow the economy to return to steady and solid growth. 

Moreover, many people purchased homes they could never afford, and have no claim to pick the pockets of the rest of us.  Especially the pockets of those of  who were careful in how much house they bought, as well as potential homebuyers, who held off buying what they couldn’t afford.  In this case lower prices reward the thrifty and responsible.  Further, lower prices will turn more people into homeowners.

The worst poseur today is Rep. Barney Frank chairman of the House Financial Services Committee.  He is seen by the Left as the bulwark against even the Obama administration-to-be in ensuring a bail-out of as many irresponsible people as possible.  Explains Harry Meyerson in the Washington Post:

Yet even after their recklessness propelled their nation into an economic crisis, America’s bankers remain the coddled children of Bush-Paulson economic policy and might just remain so under the Obama administration. Last Friday, the panel that Congress appointed to oversee the Treasury’s Troubled Assets Relief Program (TARP), which administers the $350 billion bailout to banks, reported that the Treasury has not monitored what the banks have done with the funds they received and that despite the language in the bailout legislation “to maximize assistance for homeowners” none of the bailout has been put to that purpose.

Indeed, if the Treasury had set out to design a system to demonstrate once and for all that trickle-down economics doesn’t work, it could not have done better than TARP. Treasury Secretary Henry Paulson has thrown money at the banks, which resolutely refuse to lend it to businesses and homeowners, no matter how creditworthy they may be.

That’s why a bill that Barney Frank is promoting in the House, which would direct banks that choose to take bailout funds to start lending to creditworthy borrowers and designate no less than $40 billion for mortgage relief, is necessary if Congress is to authorize the Treasury to spend another $350 billion on TARP. Over in the Senate, the Democrats seem inclined to think that the need for such legislation is obviated by President-elect Obama‘s promise to administer the TARP in the ways that Frank’s bill would mandate.

If Obama’s appointees inspired sufficient trust that they would be willing to take on the banks, such legislation would be unnecessary. Unfortunately, they don’t.

Of course, this is the same Barney Frank who worked so hard to turn Fannie Mae and Freddie Mac into political slush funds while assuring the world that they were safe and sound.  Oops!  But in Washington people just go from failures to bigger and better things.  Rep. Frank is a prime example, having a big hand in the “rescue” of the American economy which he did so much to sabotage.

Doug Bandow
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Doug Bandow is a Senior Fellow at the Cato Institute.
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