Wednesday, October 13, 2010

Barney Frank, Then and Now, CD Edition

Greg Mankiw has a great post about Barney Frank's changing views over time on affordable housing and the role of the GSEs.

Frank's current position was summarized during a radio debate this week when Republican challenger Sean Bielat claimed that "Frank contributed to the downfall and subsequent recession by supporting lenient lending standards for prospective home buyers.  He has long been an advocate for extending homeownership, even to those who couldn’t afford it, regardless of the cost to the American people."
The Boston Globe reported on the debate:

"Frank, a leading liberal who has represented the state’s Fourth Congressional District for nearly 30 years and became chairman of the House Financial Services Committee in 2007, said he and other Democrats fought to curb predatory lending practices before the recession but were thwarted by Republicans. He said he had supported efforts to help low-income families rent homes, rather than buy them.

Low-income home ownership has been a mistake, and I have been a consistent critic of it,’’ said Frank, 70. Republicans, he said, were principally responsible for failing to reform Fannie Mae and Freddie Mac, the mortgage giants the government seized in September 2008."

Greg Mankiw links to a NY Times article that presents a much different Barney Frank in 2003. Here's another example from that era that illustrates just how much Barney Frank's views on affordable housing and GSEs have changed, based on this letter to President Bush in 2004, co-signed by Barney Frank, Nancy Peolosi and 74 other Congressional Democrats: 

"We urge you to reconsider your Administration's criticisms of the housing-related government sponsored enterprises (the GSEs) and instead work with Congress to strengthen the mission and oversight of the GSEs. We write as members of the House of Representatives who continually press the GSEs to do more in affordable housing. 

We have been concerned that the Administration's legislative proposal regarding the GSEs would weaken affordable housing performance by the GSEs, by emphasizing only safety and soundness. While the GSEs' affordable housing mission is not in any way incompatible with their safety and soundness, an exclusive focus on safety and soundness is likely to come, in practice, at the expense of affordable housing.

We also ask you to support our efforts to push the GSEs to do more affordable housing. Specifically, join us in advocating for more innovative loan products and programs for people who desire to buy manufactured housing, similar products to preserve as affordable and rehabilitate aging affordable housing, and more meaningful GSE affordable housing goals from HUD."


At 10/13/2010 8:15 AM, Blogger juandos said...

Barney Frank had help...

At 10/13/2010 8:53 AM, Blogger juandos said...

Gee! The month of October so far has been a very trying time for Barney Frank...

At 10/13/2010 10:01 AM, Blogger sethstorm said...

Mankiw, the guy that got canned for his candor on offshoring? While not housing, he certainly was out of touch. He still is.

At 10/13/2010 11:00 AM, Blogger Hydra said...

Where is the inconsistency between wanting to reduce predatory lending and wanting more oversight of the GSE's?

At 10/13/2010 11:23 AM, Blogger Benjamin Cole said...

Kinda like Meg Whitman, R-Party candidate for Cal. governor, who says we need to cut back on public pensions, go to defined benefits.


But no cuts for public safety union employees, after they backed her for Governor.


Public safety employees have the fattest and most expensive pneions, and promise to bankrupt the state and the City of Los Angeles.

Taxpayers often have to provide full pension and medical benefits for public employees retiring in the 40s...even when they take second jobs, again often on the public dime.

At 10/13/2010 1:13 PM, Blogger morganovich said...


he was not asking for more oversight back in 2006, he was asking for less. frank and dodd were the ones who head off attempts by bush and mccain to reform the GSE's.

read the rest of the posting.

barney has long championed using freddy and fannie to make loans to the poor to help them buy houses.

he met every attempt to reign it in or establish risk guidelines with a full class warfare assault and vilification all while being one of their top 3 recipients of donations.

he is just flat out lying now about what his positions and roles were.

At 10/13/2010 7:52 PM, Blogger Kelly D. Miller said...

I second what Morganovich said.

At 10/14/2010 6:15 AM, Blogger juandos said...

Barney Frank, beyond asinine...

At 10/14/2010 10:56 AM, Blogger John Thacker said...

Where is the inconsistency between wanting to reduce predatory lending and wanting more oversight of the GSE's?

Pushing more affordable housing (and stressing that the GSEs should not "emphasiz[e] only safety and soundness") is the other side of the same coin as lending to people who maybe can't afford it. You can't take one without the other. You can disagree about the relative size of how many extra bad loans you'll make by extending affordable loans, and you can disagree about the rightness of the policy. But you have to admit that there are tradeoffs.

Sure, he wanted more oversight of the GSEs in one sense... but he wanted more oversight in order to push them to extend homeownership to people who otherwise couldn't afford it. NOT to push people towards renting, as he's claiming.


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