“In any other area of American life, this track record would get a man run out of town. In Washington, he’s hailed as a sage whose history of willful error will be forgotten faster than taxpayers can write a check for $200 billion.” - The Wall Street Journal on Rep. Barney Frank, Sept. 9, 2008
The only thing more painful than watching 180 billion tax dollars swirl down the AIG drainpipe is listening to Barney Frank bloviate about it.
I don’t know The World’s Most Expensive Legislator personally, but I hear he’s quite a cut-up at cocktail parties. However, as legislator and politician, he is an unmitigated disaster. Frank combines the economic success of AIG, the business ethics of Enron and the personal accountability of Ruth Madoff.
Frank began his career opposing Reaganomics, an opposition that stubbornly resisted 25 years of nearly constant economic growth. In the 1990s, Frank sat on the Banking Committee regulating Fannie Mae, even as his then-partner, Herb Moses, worked as a Fannie exec.
Is it a coincidence that Frank has been a die-hard advocate for expanding Freddie/Fannie at any cost?
Since at least 2002, Frank fought an ever-growing drumbeat of calls to slow down the Fannie Mae/Freddie Mac train wreck.
In 2003, he famously said that Freddie and Fannie were “not in a crisis,” that they were “fundamentally sound financially.” He repeated that expert testimony in 2005, all the while rejecting the argument that the taxpayers were responsible for Freddie and Fannie’s bills.
And in 2007, he actually proposed raising the caps on Fannie/Freddie’s portfolios - exposing taxpayers to even more risk - and then dumping the new money into (drum roll, please) even more subprime mortgages.
Less than a year later, the Fannie/subprime/derivatives catastrophe was upon us. And the cheerleader for all three? Our Barney.
Which is why it so astonishes that anyone takes him seriously as the self-declared watchdog of Wall Street. Please, Barney, just shut up.
Frank is great at blustering his way past reporters and his Econ 101 liberal constituency out in Newton. But watching him yesterday afternoon questioning AIG chief Ed Liddy, Frank was revealed as the picayune partisan he truly is.
Where was the “grilling” of this AIG fat cat we were all promised? Where was the “A-ha!” moment as Frank revealed the private-sector greed and corruption behind the bailout mess?
Nothing. “Pitchfork Barney” curled up like a kitten at Liddy’s feet, purred a few inconsequential comments and then slinked away.
If there’s anyone in Massachusetts with the street cred - make that “cash cred” - to lecture the execs of AIG, it’s Joe Petrucelli of East Bridgewater Savings Bank.
Under his leadership, East Bridgewater has no delinquent loans, no homes in foreclosure and even made a profit during the last quarter. And not one thin dime in bailouts, either.
And what did Petrucelli get for his trouble? Slapped with a citation from the FDIC for not making enough “Community Reinvestment Act” loans - also known as “Barney Frank” loans.
A banker does everything right, and he’s a problem. Barney Frank gets the economics entirely wrong, and he’s the solution?
We taxpayers have a lot bigger problem than AIG.
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