BY NACIA LEE BLOM – More than four years after the housing market crash and ensuing economic meltdown of 2008, Hawaii residents are still struggling to keep their homes above water and find jobs. This collapse was spurred in part by the unchecked operations of mortgage giants Fannie Mae and Freddie Mac, whose risky loans were a major factor of the sub-prime mortgage crisis that sunk our country into the greatest recession in the modern era.
Congressman Barney Frank, whose job it was to oversee Fannie Mae and Freddie Mac prior to their meltdown, stood on the House floor and on July 27, 2005 openly stated: “you are not going to see the collapse that you see when people talk about a bubble.”
Well, at best Frank was ignorant to their risky operations, but at worst he was trying to justify his own lax oversight of the finance entities.
See Congressman Frank make these bold and ill-advised statements here.
Now, in 2012 with the economic recovery still at the forefront of our minds, I am appalled to see that Hawaii Congresswoman Mazie Hirono invited Barney Frank, the man who told us in 2005 that the housing market was not going to collapse, to come to Maui and raise money from Hawaii residents.
Less than one year ago, Congress formally recognized that “the failures of Fannie Mae and Freddie Mac helped precipitate the deepest economic decline since World War II.”[1] Despite this collapse, Fannie and Freddie executives were being paid multimillion dollar compensation packages that Congress found were “nearly 15 times greater than the annual compensation of the President of the United States.”[2] Congress successfully voted to limit these lavish compensation packages, but not without a fight from Rep. Frank, who voted against limiting Fannie Mae and Freddie Mac executives’ pay![3]
Unfortunately, this is nothing new. This is the same Barney Frank who in 2003, as a member of the House Financial Services Committee, stated: “Fannie Mae and Freddie Mac — are not facing any kind of financial crisis.
“The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”This is the same Barney Frank who wanted to gamble our money on risky loans:
“I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing.”
Even former President Clinton now blames Barney Frank’s like-minded Democrats, for planting the seeds of today’s economic crisis as he stated in an ABC interview: “I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac.”
The collapse of our housing market was the lynch-pin that set off a national economic collapse that spread around the world. For someone who was so willfully ignorant of how his actions were precipitating such an enormous catastrophe, it is truly astounding that Mazie Hirono would invite him to Hawaii to ask local residents for money on her behalf.
As a representative of our state, Congresswoman Hirono should know better than to have Cong. Frank as her “special guest.” After his lax oversight and empty reassurances put so many of our neighbors out of their homes and help create our national fiscal crisis, Barney “you are not going to see the collapse” Frank is not the kind colleague anyone should be proud to host at a fundraiser.
Nacia Lee Blom is the Executive Director of the Hawaii Republican Party