Barney Frank Calls For Bigger Losses at Fannie and Freddie

J.D. Foster / June 26, 2009

Barney Frank, Chairman of the House Financial Services Committee has suggested that Fannie Mae and Freddie Mac, the now bankrupt housing finance giants, should relax their lending standards. This suggestion is farcical. One’s immediate reaction after the laughter has subsided might well be, “will we never learn?”

For many years, analysts of diverse stripes warned that Fannie Mae and Freddie Mac, the housing finance giants, were a disaster waiting to happen. But the financing giants also had giant friends in Congress, and so efforts to rein in Fan and Fred were easily thwarted. Among those congressional defenders was Barney Frank. Fannie and Freddie are now explicit wards of the state, financial markets have been put through the wringer, and taxpayers are out many billions of dollars propping them up. (more…)