NYT’s Brooks: Barney Frank ‘Egregiously Immoral’

Today’s New York Times op-ed page features a David Brooks-as-usual column about Washington business as usual:

[T]he most devastating scandal in recent history involved dozens of the most respected members of the Washington establishment. Their behavior was not out of the ordinary by any means.

For that reason, the Fannie Mae scandal is the most important political scandal since Watergate. It helped sink the American economy. It has cost taxpayers about $153 billion, so far. It indicts patterns of behavior that are considered normal and respectable in Washington.

But two figures stand out in Brooks’ estimation:

Only two of the characters in this tale come off as egregiously immoral. [Fannie Mae CEO James] Johnson made $100 million while supposedly helping the poor. Representative Barney Frank, whose partner at the time worked for Fannie, was arrogantly dismissive when anybody raised doubts about the stability of the whole arrangement.

No response (to our knowledge) from Mr. Hot Fannie. Don’t expect that to last long.

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9 Responses to NYT’s Brooks: Barney Frank ‘Egregiously Immoral’

  1. BP Myers says:

    Mr. Brooks, as usual, provides his own skewed view of history. The facts are that it was the boom in subprime lending that caused the housing debacle. Fannie and Freddie were minor participants in that marketplace.
    From Mclatchy: “Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent . . . During those same three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages.” Fannie and Freddie’s losses pale in comparison to those in the vaunted private sector and Wall Street, though of course we bailed them out too. But when they crashed, they brought the whole housing market down with them. Fannie and Freddie were not even primarily responsible for the recent housing bust, and to say that they were is a lie.

    • Campaign Outsider says:

      I’m not sure Brooks said what you say he said, Brendan.

      Brooks: “Underneath, Fannie was a cancer that helped spread risky behavior and low standards across the housing industry. We all know what happened next.”

      No “primarily responsible – just “helped sink the American economy” (earlier in column).

      Isn’t that fair to say?

      • BP Myers says:

        I take most issue with his statement, “It helped sink the American economy.” Again, if it weren’t for Wall Street predators and fly-by-night mortgage companies, motivated by their own greed to take advantage of lax government regulation and outrageously low interest rates, to dangle the American dream of home ownership in front of many who (they knew or should have known) could not afford it, Fannie Mae and Freddie Mac would have been just fine. It was private sector subprime loans that brought the housing industry down for everybody, sinking Fannie and Freddie along with them. And $153 billion in losses pales in comparison to the combined losses of Countrywide, HSBC, JPMorgan Chase, Wells Fargo, Goldman Sachs, et cetera et cetera. They cost us far more than Fannie and Freddie ever will, but we don’t hear much about their role in it anymore, and certainly not from David Brooks. He uses this column to perpetuate the canard about Fannie and Freddie, only to take shots at Barney Frank (who I’m no fan of either.) And that’s the most intellectually dishonest thing of all.

      • BP Myers says:

        So to answer your question, it is not fair to say. It is the exact opposite. The “cancer” began in the private sector and then spread to Fannie and Freddie. Those two firms had nothing at all to do with the low standards and risky behavior demonstrated by Wall Street and the private sector, giving mortgages to people who couldn’t afford them. It is disingenuous at best and . . . something else . . . at worst, for David Brooks to hold them at all responsible.

  2. Curmudgeon says:

    Brooks’ and the authors of the material Brooks is citing, when discussing Barney, are condemning his arrogant dismissal of any claim that Fanny and Freddy were in trouble.

    Frank also pushed for the lowering of lending standards by both Fanny and Freddy, which, in turn, rippled throughout the rest of the mortgage lending world.

    To suggest that Fanny and Freddy, and Johnson and Barney, did not have a hand in the mess is simply disingenuous political posturing.

  3. Bob Gardner says:

    Plenty of blame to go around. The real estate industry around here dominated the media and did its best to deprive people of affordable housing (eg rentals) –especially rent-controlled apartments, but also apartments coverted to condominiums. The natural free-market psychology of “don’t buy overpriced housing.” was replaced with “buy as much as they’ll let you by any means necessary because prices are always going to go up.”
    Remember back in the 80’s and 90’s all those exposes of people buying big houses with tax subsidized mortgages? The answer is no because there were no such exposes. Instead, people like Bella English, Jorge Quiroga and Gary Chafetz produced lurid reporting on people who had cheap housing. Anyone who wasn’t borrowing the maximum and helping to drive housing prices up wasn’t doing their civic duty .

  4. Michael Pahre says:

    Rep. Barney Frank’s response is old news to this story that is old news.

    I can’t imagine reading a news story about Barney Frank where the reporter writes, “Barney Frank did not respond to a request to comment.” He always responds. Any reporter who can’t get him on the record is lazy.

    • Campaign Outsider says:

      I dunno, Michael. Does it matter that Brooks is a columnist? And what’s the question here – “Rep. Frank, would you dispute that you are egregiously immoral?” Not sure any columnist would make that call.

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