The Wall Street Journal’s editorialists are pleased today:
Barney to Fannie: Drop Dead
Wonder of wonders, miracle of miracles.
Barney Frank has been all over the airwaves this week with a clear and—we never thought we’d say this—perfectly sound message about Fannie Mae and Freddie Mac: “They should be abolished.”
Well, praise be. Two years ago next month, then Treasury Secretary Hank Paulson put the two government-sponsored mortgage-finance giants into conservatorship, and Congressman Frank declared himself pleased that there was a good chance, according to government bean-counters, that the rescue wouldn’t cost taxpayers a dime. Also at the time, Mr. Frank scoffed at the Bush Administration’s view that Fan and Fred should be wound down, saying it would never happen. One and a half trillion dimes ($149 billion) later, Mr. Frank appears to have seen the light.
Recall that in 2007 Mr. Frank had complained that the reason Fannie and Freddie hadn’t been reformed earlier was “the insistence of some economic conservative fundamentalists in the Bush Administration who, to be honest, don’t think there should be a Fannie Mae or a Freddie Mac.” Welcome aboard, Barney.
In another sign that he’s an avid reader of these columns, Mr. Frank even told Fox Business, “If we want to subsidize housing then we could do it upfront and let the budget be clear about that.” That is certainly a more honest way to subsidize housing and makes us think we don’t write in vain.
This is nice, but Captain Ed at Hot Air says we shouldn’t forget the history. He is of course correct (bold is mine):
That’s … a sea change for Frank. While he nearly dislocates his shoulder attempting to pat his own back by claiming that he has said this all along, it’s simply not true. Frank, in his role on the House Financial Services Committee, played a huge part in creating and maintaining the government intervention that severely distorted the lending markets. Whether or not he ever uttered a comment along the way about overdoing home ownership, Frank’s actions helped to create and maintain those policies, and he defended them repeatedly over the last twelve years.
… Just last year, Frank and his allies were busily claiming that the free market caused the collapse, and that only government intervention could restore American prosperity. Eighteen months into the Obama administration, Frank now wants to sound like a born-again acolyte of Adam Smith, or at least as close as Frank can approximate such a pose.
My theory: Barney “I Really Like the Free Market” Frank is frightened that Sean Bielat actually has a shot at pulling off the supposedly unthinkable — taking his congressional seat.
Here’s more from Bielat (bold is mine):
… Now, amid a heavily anti-incumbent election year, Frank has suddenly changed his tune on Fannie and Freddie, telling Fox News the companies should be “abolished”. Massachusetts voters should not be fooled by Frank’s election year conversion. He risked every hard working American’s economic well-being when he endorsed and protected Fannie and Freddie’s loaning practices.
“It’s pure election-year politics,” said Bielat, a Marine and successful businessman. “The voters are on to Congressman Frank. He is scared and knows Fannie and Freddie are a huge albatross around his neck going into November. Sub-prime mortgages were a primary reason our economy collapsed and why so many people are out of work. Nobody pushed harder to increase Fannie and Freddie’s stake in sub-prime mortgages than Barney Frank.”
This is Barney’s big, fat, fear-driven political ploy. No one in his district should even think about buying what he’s selling.
Other than the apparent need for an on-board grammarian (“loaning policies”?), Bielat looks like the real deal.
Impossible? Yeah, that’s what they said about Scott Brown.
The larger message is that this may be the first true “no incumbent in the president’s party is safe” election since the 1974 post-Watergate ballot box massacre. Pass the popcorn.
UPDATE, August 20: Robert Snider at Pajamas Media analyzes the situation, and find a Bielat blockbuster difficult but doable.