Tuesday, October 07, 2008

Anti-racism - the last refuge of a scoundrel

The current financial mess may be an orphan, but not for lack of fathers. One man present at its conception was Massachusetts representative Barney Frank, who as a member of the House Financial Services Committee pressed Fannie Mae and Freddie Mac to increase its mortgage lending to high risk borrowers. Rather than admit to his role in the unfolding debacle, Frank has charged critics of his actions with, you guessed it, racism:
BOSTON (AP) - Rep. Barney Frank said Monday that Republican criticism of Democrats over the nation's housing crisis is a veiled attack on the poor that's racially motivated.
The Massachusetts Democrat, chairman of the House Financial Services Committee, said the GOP is appealing to its base by blaming the country's mortgage foreclosure problem on efforts to expand affordable housing through the Community Reinvestment Act.

He said that blame is misplaced, because those loans are issued by regulated institutions, while far more foreclosures were triggered by high-cost loans made by unregulated entities.

"They get to take things out on poor people," Frank said at a mortgage foreclosure symposium in Boston. "Let's be honest: The fact that some of the poor people are black doesn't hurt them either, from their standpoint. This is an effort, I believe, to appeal to a kind of anger in people."

Frank also dismissed charges the Democrats failed on their own or blocked Republican efforts to rein in the mortgage companies Fannie Mae and Freddie Mac. The federal government recently took control of both entities.

House Minority Leader John Boehner of Ohio called Frank's remarks "a lame, desperate attempt to divert Americans' attention away from the Democratic party's obstruction of reforms that would have reined in Fannie Mae and Freddie Mac and helped our nation avoid this economic crisis."

"Congressman Frank should retract his ridiculous statements and start taking responsibility for the role he and other top Democrats played in putting Main Street Americans in this mess," Boehner said.

Frank said Republicans controlled Congress for 12 years and passed no regulation, while Democrats passed a Bush administration Fannie and Freddie regulation package since gaining control of the House and Senate in January 1997.

Frank doesn't mention that an earlier attempt by the Bush administration to rein in Fannie and Freedie with tougher regulations following an accounting scandal were blocked by congressional Democrats, and softer rules were enacted in return for an emphasis by the mortgage giants to increase lending to lower income and minority borrowers.

The sad irony is that in an effort to make life easier for low income households, such government sanctioned altruistic business practices have made life harder for them by feeding the lending frenzy that led to the real estate downturn, and to the current financial crisis which has fueled unemployment. As the adage goes, no good deed will go unpunished.


Blogger Harry Eagar said...

Yeah, that would explain why Iceland's banks leveraged themselves to 12 times GDP.

You guys are never going to believe me, but this is a free market failure.

There were plenty of other stupid things going on, but Frank is right. The poor were not deluding the rich.

October 07, 2008 11:20 AM  
Blogger Duck said...


No one is saying that the poor deluded the rich. The rich, aka Frank and his fellow social engineers, deluded themselves. They deluded the poor as well, and encouraged them to take loans that many of them were ill suited to take. This experiment in progressive reality denying has been a Lucy and the football moment for the poor, who played Charlie Brown to the government's Lucy.

October 07, 2008 3:53 PM  
Blogger Harry Eagar said...

Actually, they are. You should read the anti-ACORN hysteria in the rightwing blogs.

October 08, 2008 11:03 AM  
Blogger Duck said...

Don't confuse "the poor" with those who exploit their plight to accumulate power and influence. Conflating ACORN and the poor is a bit like mistaking a tapeworm for an intestine.

October 08, 2008 11:54 AM  

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