Over the past few weeks I've been skeptical of claims by Rep. Barney Frank, chairman of the House Financial Services Committee, that he's been a consistent and leading voice for reform of Fannie Mae and Freddie Mac, the two government-sponsored home-lending giants whose fall is the immediate cause of the current financial turmoil. The Massachusetts Democrat and I went at it here and here and here. Now, finally, Frank acknowledges that he dismissed ample warnings about Fannie and Freddie shenanigans five years ago.
Here's an exchange with CNN's John Roberts yesterday:
ROBERTS: Congressman, you know, a lot—big question that people asking is, how do we get to this point here. And minority leader John Boehner there in the House has pointed fingers at Senator Chris Dodd and you four years ago opposing reform of entities like Fannie Mae and Freddie Mac.
The Wall Street Journal says in the year 2000 when Representative Richard Baker proposed Fannie Mae and Freddie Mac reform you dismissed it. New York Times reports that an administration proposal in 2003 to reform Fannie Mae and Freddie Mac was met by response from you where you said, "I do not believe that we're facing any kind of crisis." Were you responsible for the delay—
FRANK: Of course not. Can I make a point here?
FRANK: In 2000 and 2003, who was in control of Congress? The Republicans—Mr. Boehner. The Democrats were in the minority. And yes, I did not think we were facing a crisis in 2003. But that didn't mean we didn't have to have reforms. Here's the deal. ...
Frank then goes on to his now standard lament that a Republican-controlled Congress failed to produce reform and that it was only under his Democratic stewardship that the siblings were reined in. Leaving aside that the 2007 reforms were hardly the stuff that was needed, Frank shows uncharacteristic modesty. While the White House was unable to push through meaningful reforms five years ago, that's in good part because Frank did his best to thwart them.
Still, while Frank has a lot to answer for concerning Fannie, Freddie, and the larger housing debacle, it would be unfair to attribute the problems to Frank alone. Congressional Republicans neglected to do their duty as well. Just as with Social Security and other entitlements, Congress as a whole consistently fails to avert obvious crises.
I'm not particularly fond of strong executive branches, and the Bush administration has pushed that line further than most. But as the Fannie and Freddie failures demonstrate, Congress hardly makes the case for the resistance.