Memory eventually fails us all, but apparently the decline strikes one party far more than the other.
In recent weeks, my friends across the aisle have expended a lot of breath proclaiming that the Democrats caused the present financial crisis by failing to pass legislation to regulate financial services companies in the years 1995 through 2006.
There is only small one problem with this story -- throughout this entire period the Republicans were in complete charge of the House and for the most critical years they controlled the House, the Senate, and the Presidency.
In the House of Representatives, the majority party has almost unlimited power over the minority party. The majority party owns the committee chairmanships; it controls what bills come to a vote; and it is under no obligation to consider the ideas of the beleaguered minority. When the Republicans were in the majority they ruled with an iron first; it is no accident that Tom DeLay was known as "The Hammer."
That is why I find it particularly flattering the Republicans now claim that in the years 1995 to 2006 I personally possessed supernatural powers which enabled me to force mighty Republican leaders to do my bidding. Choose your comic book hero -- I was all of them.
I wish I had the power to force the Republican leadership to do my bidding! If I had had that power, I would have used it to block the impeachment of Bill Clinton, to stop the war in Iraq, to prevent large tax cuts for the extremely wealthy, and to stop government intervention into the private life of Terri Schiavo. Yet that power eluded me, and I was unable to stop those things.
According to the Republicans' misty memories of the period before 2007, I allegedly singlehandedly blocked their determined efforts to regulate Fannie Mae and Freddie Mac, and my supposed intransigence literally caused the worldwide financial crisis.
Fortunately, we have tools to aid memory -- pencil and paper, word processing, transcripts, newspapers, and the Congressional record. And as described in the most reputable published sources, in 2005 I in fact worked together with my Republican colleague Michael Oxley, then Chairman of the Financial Services Committee, to write a bill to increase regulation of Fannie Mae and Freddie Mac. We passed the bill out of committee with an overwhelming majority -- every Democrat voted in favor of the legislation. However, on the House floor the Republican leadership added a poison pill amendment, which would have prevented non-profit institutions with religious affiliations from receiving funds. I voted against the legislation in protest, though I continued to work with Mr. Oxley to encourage the Senate to pass a good bill. But these efforts were defeated because President Bush blocked further consideration of the legislation. In the words of Mr. Oxley, no flaming liberal, the Bush administration gave his efforts 'the one-finger salute.'
The Republicans can claim some supposed successes despite my awesome power. In 1999 they passed the Gramm-Leach-Bliley Act, which overturned a Depression-era law preventing commercial banks from acting like investment banks. In 2000, they passed another bill which loosened regulation of derivative markets. I voted against these bills -- but to no avail.
Under Republican President George W. Bush, many federal agencies turned a blind eye to activities which would later precipitate the global financial meltdown. The Securities and Exchange Commission decided to allow the nation's largest financial institutions to "self-regulate;" the Federal Reserve under Alan Greenspan declined to use its power to regulate subprime mortgages; the Comptroller of the Currency decided to preempt state consumer laws on subprime mortgages.
Meanwhile, President Bush himself demanded that Fannie and Freddie increase the percentage of subprime loans they purchased, supposedly because of his belief in an "ownership society." Incidentally, increased lending to subprime borrowers would also fuel astronomical profits by the financial services industry. I publicly opposed giving mortgages to unqualified borrowers because I believed that some families are better off renting.
Yet somehow none of this was recorded in the Republican collective memory.
Forgotten too is the significant progress that was made after the 2006 elections, when the Republicans in Congress were repudiated by American voters.
Ironically, this is the period in which I and my Democratic colleagues actually did possess the magical power needed to make real change in Washington -- we became the majority party. In March 2007, just two months after I became the Chairman of the Financial Services Committee for the first time, I moved quickly to forge a bill which would regulate Fannie Mae and Freddie Mac. The bill passed the House in May, with all 223 Democrats voting for it, and 103 Republicans voting against it. President Bush later signed that legislation into law.
Later in 2007, I introduced legislation to restrict subprime mortgages. The bill passed the Financial Services Committee and the House, but it did not pass the Senate, where because of the filibuster rule, the Republican minority actually does have the power to hobble the majority. The bill passed the full House with all 227 Democrats and 64 Republicans voting for it, and 127 Republicans voting against.
Ironically, those Republicans who now attack me most viciously and whose memories are the most impaired were among those who voted against both bills.
Republicans also forget -- or do not understand -- that the present financial crisis has many fathers. The failure to pass any meaningful legislation before 2007 allowed unscrupulous actors to gorge themselves at the public's expense. Unregulated mortgage brokers sold subprime loans including the now infamous NINA (No Income No Assets). Major financial institutions packaged bad mortgages into securities and sold them as low-risk investments. Rating agencies gave stellar grades to toxic assets while being paid by the companies who stood to benefit from their actions. Insurance companies like AIG issued Credit Default Swaps which magically turned toxic assets into gold.
The executives of some of those institutions now seek bonuses for their fine work. Perhaps my Republican colleagues should ask for bonuses too.
The true tragedy is that this is more than a game. Millions of Americans are now unemployed and millions of others have lost their homes. Well-run businesses have been shaken to their foundations, and the stock market has taken a plunge not seen since the Great Depression. Many people facing retirement have found their savings have been cut in half.
They say that those who forget history are doomed to repeat it. But the collective amnesia of the Republican Party will not only hurt its members -- it threatens to hurt all of us. Is there a cure for amnesia? We can only hope.
At least the Massachusetts Democrat is consistent. His record is close to perfect as a stalwart opponent of reforming the two companies, going back more than a decade. The first concerted push to rein in Fan and Fred in Congress came as far back as 1992, and Mr. Frank was right there, standing athwart. But things really picked up this decade, and Barney was there at every turn.
http://online.wsj.com/article/SB122091796187012529.html?mod=most_emailed_day
By STEPHEN LABATON
Published: Thursday, September 11, 2003
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LinkedinDiggFacebookMixxMy SpaceYahoo! BuzzPermalink The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html?sec=&spon=&pagewanted=all
There is much work to be done to reverse the travesty of the last 15 years where unbridled greed has lead to the downfall of the American economy. I only hope that we have the courage and intellect to learn the lessons of the past and make the changes needed to ensure a fair and just future.
There was a report that came out about PAC money in the 2008 election cycle which said there was 4.8 billion, that's right, billion dollars spent in operating expenses for those PAC lobby groups with some 500 million or so going directly to candidates or their parties in the form of campaign contributions. Let's step back for a minute and really face it: We don't live in a democratic republic. We live in a corporate form of aristocratic goverment disguised as democracy where bribery is the driving force behind critical legislation decisions.
If you all really wanted to change things, don't just elect a black president and then go back to what you were doing thinking you changed the world. If you really want to send shockwaves through the halls of Capitol Hill, when the mid-term elections come around vote for any third candidate who's making any bit of sense. They couldn't possibly be much worse than what we have now.
You DO remember that little thing known as the Depression which was EXTENDED significantly purely and simply because of Keynesian Economics don't you?
You DO remember that Keynesian Economics has a ZERO PERCENT success rate?
You DO remember that what is currently being practiced by the Democrats is Keynesian Economics?
You DO remember that it was during the Carter administration that the initial changes in how income related to housing costs were changed so that more people could allegedly afford housing?
You DO remember that it was the Clinton Administration that did the "end run" around the Glass-Steagall Act which ultimately led to the repeal of the act in question?
You DO remember that Democrats COULD HAVE prevented the repeal of Glass-Steagall from EVER reaching President Clinton's desk (using those same filibuster rules you complain about the Republicans using) but CHOSE not to?
There is more than enough blame to go around and Democrats, no matter their personal leanings, are NOT the innocents that they would like to pretend to be.
But if you can't quite manage total self-destructive amnesia, the Republicans would just LOVE IT if you would consider all that history a "gray area" in which the consequences of their actions cannot be discerned.
Your article reminded me that I am a product of the "Great Depression," another American downfall created by our illustrious Right. After Wilson left office we had three successive Republican presidents, Harding, Cooledge, and Hoover all of whom had a stacked congress and senate. The "Greedy Ole Party" really shone through during those years and I came close to going to never-never land because of malnutrition. My mother (father split) had to beg for the ends of bread in order to keep us alive.
About sixty five years ago, when I was eleven, I asked my father what the difference was between a Republican and a Democrat. His response was, "Republicans are for the rich and Democrats for the poor." How true his words were and I've seen it myself for 65 yearst after he made his remarks.
Keep on these anti-American buggers!
Barney is a funny guy. It seems he only wants to remember what matters to him as well.
He did not want Fannie and Freddie reigned in. He said they were financially sound. Obviously they were not.
I find your blog post delightful and funny.
Barney first states that the majority party has almost complete control and can do whatever they would like to do but then later talks of the minority republicans filibustering a bill. One would have to wonder if the democrats ever filibustered a bill?
He also talks of the republicans passing a bill for deregulation in 1999 but fails to mention that democrat President, one Bill Clinton, would have had either sign the bill or veto it.
Talk about spinning like a top.
Obama appointed Ron Kirk, Mr. 'NAFTA superhighway through Dallas' to be U.S. trade representative. Great, I guess anyone left in manufacturing better get those community college loans and health care course schedules ready, 'cause my buddy Jorge down in Juarez will work for 80% less wages. Inhumane working conditions in China and third world Asia, who cares? Cheap shoes and camera phones at Wal Mart are sweet!!! This guy even had 10 grand in back taxes 'cause he tried to write three years of Mavericks season tickets off as an entertainment expense, lol!!! The unfortunate truth is: New boss, same as the old boss. Instead of pointing fingers, why don't you Dems grow some balls and own it yourselves first instead of always playing the role of the good guys on the moral high ground?
It's not by accident. They know people no longer challenge facts. They are free to spin, or rewrite history any way they want, no one has the courage to tell them they are lying. Shame on those who let us knowingly be misled. Accountability and shame would stop the spinners.
We could trust them with our future, if we could trust them to be honest about our past.
The GOP talkers say you did it, therefore you did it.
That's how their logic works. We want a thing to be true therefore it is true.