Found this video today on The Fox Nation, in which Barney Frank suggests its time to do away with Freddie Mac and Fannie Mae:
Abolition of Freddie Mac and Fannie Mae sound good on the surface. But consider the source, in this case. If you think this avowed Socialist is interested in reducing government’s influence over how ordinary Americans finance their homes, then he’s got some really cheap Florida wetland real estate he’d like to show you, too.
Barney Frank would impale himself on the Washington Monument before he’d let that kind of power and control slip from the hands of the federal bureaucracy. It just ain’t gonna happen, sports fans.
I wrote about yesterday’s mortgage market summit here. Just to recap:
Here we are in 2010, with the consequences of credit market-meddling still being felt, and instead of walking back the CRA and the results-oriented process of forcing banks to load to bad (i.e., subprime) borrowers, they’re talking about more bailouts of Freddie Mac and Fannie Mae. I haven’t even touched on the rank corruption found within those two organizations, but you can see why I’m not very confident that meaningful reform is in the cards.
What needs to happen is a gradual pullback of Freddie Mac and Fannie Mae’s participation in private sector loan creation. Let banks make credit decisions based on the perceived risk of default, and make people learn to work, save and earn the American Dream. Home ownership is a privilege not a right, and its a privilege that’s earned. It does not come as a benefit of government largesse. The proposals being floated for retooling the mortgage market system do nothing to restore the natural order, and simply kick an $11 trillion can down the road.
Frank’s comments to Cavuto are either an Alinksyesque scare tactic, designed to frighten people into thinking federally guaranteed loans are going away and thus generate support for a bailout or mortgage forgiveness plan, or he has some other scheme that would replace Fannie and Freddie with even more social engineering and punishment for self-restraint and fiscal responsibility. One of those two scnenarios will come true. The other one—abolition—will not.
The day Barney Frank supports getting rid of these two GSO’s is the day the Mayan Calendar warned you about.
Gimme some feedback in the comments.