I guess this is what lawyers call ‘evidence.’ It’s the equivalent of having a video of John Wilkes Booth sneaking through Ford’s Theater and having him stop to face the camera and slowly state his name and birthdate [5/10/1838]

Tom Bevan puts his focus on a regulator who warned of the coming mess and was attacked for doing so. These are the actual words of Democratic representatives defending Fannie Mae and Obama adviser, Franklin Raines. I double checked the transcript in case someone was manipulating the video to make them appear corrupt or clueless.

Greg Mankiw does a good job of calling out Sen Obama on his interpretation of the financial crisis:

If Senator Obama really wants to transcend partisan politics, as he would sometimes have us believe, he might want to give a slightly more balanced view of the history of how this all started. He also might want to take note that the Bush administration warned about some of these problems five years ago and had its reform efforts stymied by prominent members of Senator Obama’s own party.

Barney Frank is a Democrat, has represented MA’s 4th congressional district since 1981 and is the world’s most famous graduate of the Buddy Hackett School of Broadcasting. In his case, the question I have is not how he missed the Fannie Mae corruption. The question is why anyone expected him to notice it. Barney Frank’s male lover ran a prostitution ring out their home for over a year and he claimed to not have known.

All articles referenced are copied in full at end of post.

—————————————————————————-
Greg Mankiw post
Distorting History

In the debate last night, Barack Obama asked a good question about the present financial crisis but then gave an answer that was, at best, incomplete:

The question, I think, that we have to ask ourselves is, how did we get into this situation in the first place? Two years ago, I warned that, because of the subprime lending mess, because of the lax regulation, that we were potentially going to have a problem and tried to stop some of the abuses in mortgages that were taking place at the time….we’re also going to have to look at, how is it that we shredded so many regulations? We did not set up a 21st-century regulatory framework to deal with these problems. And that in part has to do with an economic philosophy that says that regulation is always bad.The main problem, we are led to believe, was a Republican ideology of unfettered capitalism that led to insufficient government involvement in the financial system.

Senator Obama might want to read this NY Times article from 1999:
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders….Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people.I am not suggesting that the entire crisis should be put in the lap of the Clinton team. There is plenty of blame to go around. Indeed, the problem goes back at least as far as the Johnson administration, which helped set up a housing finance system that was always fundamentally flawed.

If Senator Obama really wants to transcend partisan politics, as he would sometimes have us believe, he might want to give a slightly more balanced view of the history of how this all started. He also might want to take note that the Bush administration warned about some of these problems five years ago and had its reform efforts stymied by prominent members of Senator Obama’s own party.

Update: Here is a related news video.
—————————————————————————
Tom Bevan post
October 2, 2008
The Regulator Speaks

You may have seen a YouTube that’s been zipping around the Internet over the past week featuring clips from a Congressional Hearing on Fannie Mae that took place in late September 2004 (as of this writing it has registered more than one million views). The eight minute and thirty-seven second video attacks Democrats for thwarting oversight of Fannie Mae and shows Republicans voicing support for increased regulation.

One clip in the video offers what looks to be damning proof of Rep. Barney Frank declaring there are “no safety and soundness issues” with Fannie Mae. Another shows Rep. Maxine Waters saying there is “no crisis” and touting the “outstanding leadership of Franklin Raines” – the head of Fannie Mae who was forced out shortly thereafter in disgrace for accounting fraud that took place under his watch. Yet another shows Rep. Lacy Clay calling the hearing a “political lynching of Frank Raines.”

Playing a bit part in the video was Armando Falcon, Jr., the Director of the Office of Federal Housing Enterprise Oversight (OFHEO). Mr. Falcon, who was appointed to the position by Bill Clinton in 1999, went before the committee to present OFHEO’s preliminary findings on accounting irregularities at Fannie Mae.

In the video, Mr. Falcon comes in for some rough treatment at the hands of Rep. Gregory Meeks, who declared he was “pissed off” at Mr. Falcon for submitting his report and said that it called into question Mr. Falcon’s credibility and competence.

I tracked down Mr. Falcon and spoke to him briefly yesterday by phone. I asked him if he’d seen the video (he had) and whether he felt the selective clips in the video presented an accurate representation of what took place that day.

“It was an accurate depiction of how that hearing went,” Mr. Falcon said. “As someone who worked for the Banking Committee for eight years, I was disappointed by the reception I got when I tried to submit the report on the findings for Fannie Mae. They gave me no benefit of the doubt that I might be right.”

I asked Mr. Falcon if the September 2004 hearing was an isolated event, or whether this kind of thing happened on more than one occasion.

“My whole tenure at OFHEO trying to strengthen oversight of Freddie Mac and Fannie Mae – it was always a challenge in dealing with members of Congress who thought these companies could do no wrong,” Mr. Falcon responded.

Clashing with Congress was “symptomatic of the difficulties that came with trying to be a strong regulator,” Mr. Falcon said, adding that those difficulties often came from both sides of the aisle.

I asked Mr. Falcon if there were times when he felt he was “thwarted” by Congress, and whether that would be the proper term to describe the kind of opposition he ran into.

“Yes,” Mr. Falcon said, “there were many instances over the years where that happened.”

But, Mr. Falcon added, there were “some good members of Congress” who were supportive of his agency’s efforts, citing Reps. Maurice Hinchey (D-NY) and Richard Baker (R-LA) as two members in particular who worked on behalf of OFHEO.

“So we had some bipartisan support from some members of Congress,” Mr. Falcon said, “Unfortunately, we also had to deal with some strong opposition.”
——————————————————————————
ABC on Barney Frank Scandal: No Political Hay for GOP, He’s ‘Truly Gifted’
By Tim Graham
October 5, 2006

Congressman Barney Frank’s scandalous tolerance of a gay prostitution business operating out of his house, uncovered by the Washington Times in 1989, drew from ABC nowhere near the dramatic amount of attention ABC gave Mark Foley. On the August 25, 1989 World News Tonight, Sam Donaldson noted it just once in passing, a mere 67 words:

“Massachusetts Representative Barney Frank, an acknowledged homosexual, today confirmed that his Washington apartment had been used as a callboy headquarters by a male prostitute for a year and a half until late 1987. Responding to a story in today’s Washington Times, Frank said he had hired the prostitute out of his own funds as a personal aide and fired him when he found out what was going on.”

There’s no Brian Ross making dramatic accusations of “X-rated” behavior. To his credit, as World News Tonight stayed off the story, Donaldson went into more detail on the August 31 PrimeTime Live, but notice how Donaldson wants some measure of fairness and accountability (even a little noise about Democratic leaders going easy), and Diane Sawyer wants to make excuses:

Barney Frank: “I thought I was going to be a liberal who got involved directly with an individual who needed help, that I had an individual who was going to get help and he took me.”

Donaldson: “Congressman Frank says he was taken. Diane, what do you think? Do you think this is Frank’s private business or should the House of Representatives properly get into it?”

Sawyer: “Well, the House is going to investigate. He called for it. Obviously, if he condoned it, if he said to them – and I find it very hard to believe – ‘Go ahead and run your ring out of my house. Be sure and turn out the lights and empty the ashtrays when you’re done.’ Obviously they’re going to reprimand him and the voters are going to make the final decision. If he didn’t know, it is a different issue.”

Donaldson: “Well, that’s true. And homosexuality is not really the issue there. You put your finger on it. Was his apartment being used as a house of prostitution? I think some may find it very hard to believe that for a year and a half he didn’t know this, he didn’t have any signs of this.”

Sawyer: “But the fact of the matter is if they can’t prove it, somebody in Washington has got to stop and say — ’cause I think the rest of the country has said it a long time — ‘How long are we going to continue to have this persistent, possibly prurient, but certainly punitive interest in people’s private lives? When is it going to stop?'”

Donaldson: “Well, I think people’s private lives, if they’re public officials and they’re running for public office, are things that are up for grabs from the standpoint of the voters having a right to say, ‘Look, the guy wants to do this, it’s fine, but I’m going to vote against him, so I want to know about it.’ You know, the thing that bothered me at first was that the Speaker of the House and some of the other top Democrats in the House seemed not to get excited about Congressman Frank’s problem, not even to the point of investigating. And I think that’s very dangerous for the House to take that attitude and for the Democratic Party to take that attitude.”

Sawyer: “I think of the last eight sex scandals, six have been Democrats, two have been Republicans, but nobody wants to get into that game of statistics. Nobody’s going to win.”

Donaldson: “I think everybody’s human, but it doesn’t matter the party. Everyone should punished equally.”

On September 18, 1989, after weeks of studiously ignoring the issue, World News Tonight ran a tough story by Jim Wooten claiming “Barney Frank’s political future has suddenly become precarious.” The Boston Globe called on him to resign, as did liberal columnist Mark Shields. Democratic strategist Bob Beckel guessed he wouldn’t last much longer. But the only sources in the Wooten story were worried liberals. Wooten concluded: “Representative Frank is generally pretty eager to be on camera, but today he declined all interviews and issued instead a written statement. It said, ‘I will not resign’. That’s fast becoming a minority view among his friends and colleagues in Congress.”

But within a few weeks, on October 27, 1989, ABC was amazingly using Frank as an ethical scold against former Reagan HUD secretary Sam Pierce in the HUD scandal:

Sheilah Kast: “[Pierce] said he would keep doing that until what he called an accusatory atmosphere changed. The subcommittee was not impressed.”

Frank: “The Fifth Amendment does not say that the atmosphere is too tense and therefore I will not testify.”

On July 20, 1990, the House ethics committee absolved Frank of knowing about the prostitution ring, but recommended a reprimand for Frank for fixing Gobie’s 33 parking tickets and wrote a “misleading memo” to secure Gobie’s probation. Reporter Sheilah Kast concluded: “One antigay Republican will try to have Frank expelled. That won’t pass, but the full House is likely to vote next week to reprimand Frank, making it difficult for Republicans to use Frank’s ethics as a national campaign issue. Sheilah Kast, ABC News, on Capitol Hill.”

Six days later, when the House voted to reprimand Frank, Kast once again insisted there was no political hay for Republicans in the Frank scandal: “The House voted two to one against the tougher penalties, most Democrats siding with Frank, most Republicans against him. With Democrats rallying around him, the reprimand is likely to have little impact on Frank’s effectiveness here and almost no impact on his chances for reelection. Sheilah Kast, ABC News, on Capitol Hill.” (This was true, in the end: he won 66 percent of the vote.)

On the February 20, 1992 Prime Time Live, Sawyer promoted Frank’s new book, Speaking Frankly: “Congressman Barney Frank of Massachusetts. A man called one of the truly gifted legislators of our time. By some accounts, able to influence up to 70 percent of Democrats’ votes on his issues, fair housing, defense cuts.” She called him “A public figure fierce about private life, a scrappy intellectual who has made a career out of saying exactly what he thinks.” The first sentence of Sawyer’s segment: “Meet the man who does the most scandalous thing you can do in Washington. He tells the truth.” (So much for that “misleading memo” he wrote to secure Gobie’s probation.)

Sawyer brought up the Gobie story with a heavy dose of empathy: “Frank has said it all happened because he felt trapped in the closet.” She wondered: “Was that the roughest time in politics for you?” When Frank said it showed clumsiness and stupidity, Sawyer interjected: “Loneliness?” Frank replied: “Yeah.”

On December 31, 1992, ABC showed its love for Barney Frank by putting on Frank and his then-lover, Herb Moses, in the middle of a celebrity medley singing “Winter Wonderland,” awarding them this (suddenly political) part of the lyrics: “And pretend that he is Parson Brown. He’ll say are you married, we’ll say ‘no, man’…”

—Tim Graham is Director of Media Analysis at the Media Research Center
———————————————