Statement by Barney Frank in 2003, now leading the charge for reform:

10 September 2003

FRANK: Thank you, Mr. Chairman.

I appreciate hearing from the two Cabinet secretaries, but I just say at the outset that before we move on any legislation, I would hope we would have some additional hearings. And in particular, I think it’s important that the variety of groups in our country who care about housing be invited, because that’s my major focus here, as it’s been during my service on this committee.

I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two government-sponsored enterprises that we’re talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We recently had an accounting problem with Freddie Mac that led to people being dismissed, as appears to be appropriate.

I do not think at this point there is a problem with a threat to the treasury. I’m going to say, we have an interesting example of self-fulfilling prophecy. Some of the critics of Fannie Mae and Freddie Mac say that the problem is is the federal government is obligated to bail-out people who might lose money in connection with them.

I do not believe that we have any such obligation. And as we said that it’s a self-fulfilling prophecy based on people. So let me make it clear: I’m a strong supporter of the role that Fannie Mae and Freddie Mac play in housing. But nobody who invested in them should come looking to me for a nickel, nor anybody else in the federal government.

And if investors take some comfort and want to lend them a little money at less interest rates, because they like this center (ph) affiliation, good, because housing will benefit. But there is no guarantee, there’s no explicit guarantee, there’s no implicit guarantee, there’s no wink-and-nod guarantee. Invest and you’re on your own.

Now, we’ve got a system that I think has worked very well to help housing. The high cost of housing is one of the great social problems in this country. I would rank it second to the inadequacy of our health delivery system as a problem that afflicts many, many Americans. We’ve gotten recent reports about the difficulty here.

Fannie Mae and Freddie Mac have played a very useful role in helping make housing more affordable, both in general, through leveraging the mortgage market, and in particular they have a mission that this Congress has given them, in return for some of the arrangements which were of some benefit to them, to focus on affordable housing. And that’s what I am concerned about here.

I believe that we, as the federal government, have probably done to little, rather than too much, to push them to meet the goals of affordable housing, and they set reasonable goals.

I worry, frankly, that there’s a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. I think that’s a (OFF-MIKE) problem, the federal government doesn’t bail them out.

But the more pressure there is there, then the less I think we see, in terms of affordable housing. I want Fannie Mae and Freddie Mac to continue with its government-sponsored enterprises, with some beneficial arrangements with the federal government, in return for which we get both the general lowering of housing costs and some specific attention to low-income housing.

In particular, I’m concerned right now that there has been and it’s been raised by Fannie Mae, it’s been raised by one of the rating agencies that’s been critical of the federal home loan bank, manufactured housing.

Manufactured housing is a very important housing resource for low and moderate-income people. We talk about increasing home ownership among low and moderate-income people and disproportionately, if you look at the increases in home ownership, it’s come with their ability to get manufactured housing. And I don’t want to see Fannie and Freddie pushed in the direction of being tougher on manufactured housing. And many of us will be in touch with the secretary — Secretary Martinez — to see how we can improve this.

I’ve talked to my colleagues in the Congressional Black Caucus in the blue book. This is a very important and I think somewhat underrated form of housing. Well, I think we now see pressure on it that’s generated in part by exaggerated fears of a financial crisis.

So I’m prepared to look at possibilities here. But I am particular — and this is a major point I want to make — I saw this is in the letter from the home builders — I do not want to see any lessening of our commitment to getting low-income housing. And here’s my concern: If you move the regulator to Treasury and you leave HUD with the mission, I’m not sure that it isn’t mission impossible or at least implausible. What’s going to do, yell at them?

I mean if all of the regulatory authority and all of the clout is over in Treasury, what’s left in HUD? And I notice that the home builders raise that.

So my threshold question is, if you move this regulator to Treasury, if you bifurcate, in terms of the Cabinet departments, the responsibility for the low-income housing mission, including manufactured housing — very important to me, as I said — and other forms of housing, if you bifurcate that, what real strength is there left behind the mission, if most of the regulation and most of the teeth are — if you put all the teeth in Treasury, having HUD gum them into doing more low-income housing doesn’t strike me as the ideal situation.

And that’s why I say, Mr. Chairman, in closing, that as we proceed on this, I would hope we would have a day when groups that are — a range of groups that are concerned with housing could specifically address that. Thank you.

Published in: on September 25, 2008 at 8:45 am  Leave a Comment  

Thinking in three dimensions…

What do I mean by that?

A three dimensional thinker is a thinker who solves problems, understands how things relate to, and react to each other, understands strategy, and the subtle nuances of the world around them.

The reason I am on this topic right now is that, in the world of politics, three dimensional thinking has become a rare beast. George Bush (either of them) doesn’t exhibit any signs of it, John Kerry didn’t give any hint that he was capable of it, Al Gore, Bob Dole, Michael Dukakis, Walter Mondale… None of them ever gave a glimmer of 3D thinking.  Bill Clinton and Ronald Regan did.

Why am I concerned with three dimensional thinking and presidential politics? Because until recently I haven’t seen any indications that either of the current presidential candidates were able to see all the nuances of the things they do.

Before I go on let me make you aware of a couple of things; I have voted both republican and democrat at times, I consider myself independent, I feel (and have for many years) totally disenfranchised from both major parties, and I was so unhappy with the crop (or crap if you’d like) of candidates this year that I was on the verge of tossing my hands in the air and not voting at all.

Barack Obama (Hussein, if you like) claims to espouse change, yet his entire platform is the same leftist, democrat ideals that they’ve used for 40+ years (now THAT’S recycling!). The only thing that is ‘changed’ about the democrat rhetoric is that it’s coming from an African American candidate. That’s historic, yes, but it isn’t change.

John McCain is a tottering old gray-hair who wouldn’t stop carping about what was going on on the other side of the planet and focus on what’s happening here at home for more than thirty seconds (just long enough for a sound bite). How typically republican of him. Everything is foreign affairs for republicans because bitch-slapping some third-world dictator or euro-trash prime-minister is what they excel at.

Obama’s VP pick, Joe Biden, was another example of business as usual. Biden is an old guard democrat who is entrenched in the Washington political machine. In selecting Biden, Obama was sending a tacit message to Washington: “Don’t worry, I’m not really going to screw with our great bureaucracy, I just want to get elected.” Change, indeed.

McCain’s pick was baffling… Who the hell is Sarah Palin? So I began digging through the internet, reading her records (public, of course), learning about her history, and slowly coming to appreciate McCain’s choice. For an hour or two I bet I knew more about Palin’s record then the media did. Then after the media backlash, the RNC speeches, the reaction from the left, and the changes McCain made to his campaign I began to see the three dimensional brilliance of the choice of Sarah Palin as VP.

For those of you on the left, please keep an open mind here.

The day after a historic speech by Barack Obama (a great speech, I give credit where it’s due), what were the 24 hour news media outlets talking about? A little known governor of Alaska. Obama doesn’t even consider Hillary for VP and pisses off her supporters. McCain shows the nation that he’s willing to do what Obama isn’t. Obama is making history so McCain decides to make a little history himself. Obama takes the safe and easy choice for VP, making the world yawn. McCain grabs a total outsider, who just happens to be a woman, and makes the nation sit up and pay attention. If Obama drops Biden in favor of Clinton he will be exposed as a panderer.

And that was just the first day after she was announced.

McCain knew (and so did Palin) that she would be crucified by the media and the left and they played it up beautifully! Now, thanks to their hysteria based attacks, she is nearly untouchable, surrounded by not only the republican base but the moderates and independents who were/are disgusted by the way the media treated her. MSNBC has been exposed as a liberal mouth piece, The National Organization for Women’s leftist agenda is now out in the open, Obama’s message of change has been totally usurped, and McCain can finally woo the centrists in this country instead of constantly having to stroke the party base. All because of Sarah Palin.

That’s great strategy.

And what is the ONE thing that the media and the rest of the left can complain about?


They are all parroting ‘one heart beat away’ message in hopes that no one actually looks at her record. Here is where the real three dimensional thinking can be seen:

Sarah Palin has been in elected office longer than Barack Obama. Palin has been in charge of a military force, Obama hasn’t. Plain has dealt with (and balanced) a BILLION dollar budget, Obama hasn’t. Plain has fought against her own party a number of times, Obama hasn’t.

So if, with a resume’ bigger than Barack Obama’s, Sarah Palin isn’t qualified to be Vice President, how can Barack Obama be qualified to be president? He can’t be. So who else is running for president? John McCain. Do you see the brilliance of it? Obama’s campaign, the democrat party, and the liberal media are, in effect, campaigning for JOHN MCCAIN! By banging on the experience drum they leave the voter with no other conclusion but that McCain is the only presidential candidate with enough experience.

Three-dimensional thinking!

In choosing Sarah Palin, John McCain has demonstrated a great strategic and tactical mind. I, for one, am fascinated to see what will happen next.

Published in: on September 7, 2008 at 5:08 pm  Comments (1)