Wall Street Journal Editorial Board Stifles Dissenting Opinion

Washington, DC - House Financial Services Committee Chairman Frank released the following statement today regarding the refusal of the Wall Street Journal editorial board to publish his response to an inaccurate editorial in a timely manner:

On Sept 9th, the Wall Street Journal ran an editorial criticizing my record with regard to Fannie Mae and Freddie Mac. The editorial was factually inaccurate. I subsequently drafted a response correcting the numerous errors and engaging the ideological issues where the Journal editorial staff and I have long standing differences of opinion. I submitted my response to the Journal that afternoon. They subsequently said they would run my response in its entirety as a letter to the editor. A full week has passed and they have run nothing.

I am not surprised to find myself in disagreement with the Wall Street Journal on what the government's role should be in helping to build affordable housing, but I am very surprised and deeply disappointed that they would present my view in an intellectually dishonest way and then refuse to allow me the chance to correct their distortions in a timely manner.

The Journal's actions indicate a narrowness of vision and a refusal to entertain contrary opinions that amount to censorship. More importantly, they rob their readers and the broader public of the opportunity to form their own views about issues that currently roil our financial; market place and the resolution of which will have a profound effect on our economic future.

Chairman Frank's response is printed in full below:

Letter to the editor of the Wall Street Journal from Rep. Barney Frank, September 9, 2008:

The Journal's recent misleading and inaccurate editorial on my relationship with Fannie Mae and Freddie Mac leaves out one central fact, and it does so in a very revealing fashion.

At the bottom of the first column of the editorial, the Journal begins by saying that "by early 2007, Mr. Frank was in charge of the House Financial Services Committee, arguing that he had long favored some kind of reform." A reader unfamiliar with the facts would have no idea that I did not simply argue in favor of reform, but presided over passage of a very tough reform bill.

When the Democrats obtained the majority in the 2006 Election, and I became Chair of the Committee, I made a very strong reform bill one of our highest priorities and worked closely with Secretary Paulson to break the logjam that hindered the bill in the past. As a result, the Financial Services Committee, which organized under the Democrats on January 31, 2007, passed the bill restructuring the regulation of Fannie and Freddie -- specifically including all the increased powers that the Bush administration requested -- on March 28, 2007 and the full House followed -- by a vote of 313 to 104 in early May. The House passed these important reforms in May of 2007 -- only four months after we became the majority. It is true that the bill was held up for over a year by inaction in the Senate, but that is not surprising given the difficulty the Senate has moving controversial legislation on any subject.

Additionally, when we were considering the stimulus package in early 2008, I proposed to Secretary Paulson that in addition to raising the jumbo loan limits for Fannie Mae and Freddie Mac, we include the GSE reform that the House had passed. He did not agree, fearing that it might slow things down.

In fact, my reform efforts had begun when we were still in the minority. In 2005, I joined Michael Oxley, then Chairman of the House Financial Services, in supporting legislation to increase the regulation of Fannie and Freddie that passed the House by a vote of 330 to 90. When former Congressman Richard Baker proposed to examine the compensation structure of Fannie's and Freddie's top executives, and some Members of Congress tried to block him, I explicitly spoke out in support of his right to do that and our right, as a Congress, to examine the GSE's compensation practices.

There is another glaring distortion in the editorial, driven by the Journal's opposition to our efforts to help build affordable rental housing. The editorial laments the fact that as part of the ultimate package I received my "biggest payoff" in the Affordable Housing Trust Fund. While that is true, I am struck by the Journal's absolute inability to understand that some of us think that the plight of people who do not have adequate rental housing ought to be addressed. The bizarre belief that adequate housing means homeownership and not rental housing was one of the push factors in the subprime crisis. That is apparently the basis for assuming that the only reason we would support an affordable housing program - along with such as the non-partisan groups as Catholic and Lutheran Churches, Habitat for Humanity, and Enterprise Community Partners -- was so that we could personally profit from this politically. The truth is that the way this fund will be created, Members of Congress will have no say over its disbursements. To the right-wing ideologues who write the Journal's editorials, funding to build affordable residential housing is "loot." Fortunately, that is a distinctly minority opinion in the Congress and in much of the country.

I acknowledge differences between myself and the Journal as to whether or not we should be trying to build affordable rental housing and as to whether or not some public role in housing finance is worth supporting. But the Journal's assertion that support for those two entities meant opposition to reform is entirely wrong, and it is presented in one of the most dishonest pieces of journalism I have seen. The Journal's error concerning what happened when the Democrats took over the majority early in 2007 is a classic example of ideological bias. It is important to repeat that the editorial omits the key point, that it was exactly in that period that the House Financial Services Committee, that I chair, passed and helped pass through the House a bill that embodied the reforms asked for by the Bush administration, and that was the basis for Secretary Paulson's and Director Lockhart's recent actions. Your readers deserve the whole story. The Journal's original letter can be found here.

Comments

[OneTop]

A lot like Fox news isn't it ..... gee I wonder why?

[MidwestBlue]

I like Barney Frank. He's one of the good ones and isn't afraid to stand up for what's right, and the last I heard, he opposes offshore drilling.
I just have a question, Rep. Frank: what the H*LL does Congress think it's doing tonight, voting for offshore drilling? What the H*LL gives Congress the right to screw around with our environment? No amount of lobbyist or oil money is worth this immoral and despicable choice the Democrats made.
With a few exceptions, I can't stand the sight of any members of Congress.

[hawks8]

Everyone likes to blame those in charge. You had oversight, take some responsibility. Why was there no warning of what was coming. I believe a few questions have to be answered in the worst financial collapse in our lifetime. Dems & Reps have their share of blame here.

[CaptainStormfield]

I see that Republican surrogates are trying to float the suggestion that the Dems forced Fannie and Freddie to loan money to "red lined" or "marginal" credit borrowers. Get out your decoder rings agents.

Larry King today.

[larry278]

Relax, Barney, nobody has ever taken the words of the WSJ's editorial board seriously, neither the former owners of the WSJ, Mr Murdoch nor the WSJ's users. The fate of the WSJ's editorial board is entirely in Mr Murdoch's hands now. Mr Murdoch is turning the WSJ into a general interest paper in order to make the WSJ more profitable. When Mr Murdoch finds that the words & opinions of the WSJ's editorial board drive away users of the WSJ, he will dispense with the services of the WSJ's present editorial board. Mr Murdoch & his advisors will then decide who will sit on the WSJ's editorial board, their role in creating the words of editorials or if an editorial board of any sort is to be used at all by the WSJ. Mr Murdoch is out to make money from all of his enterprises. If the WSJ's editorial board isn't really bringing in money for WSJ, they are dead, wood. Mr Murdoch uses dead wood for kindling.

[olephart]

The WSJ provides two useful services. It is an excellent source of data for those who can interpret, analyze and put it to use. Its editorial pages provide an excellent wrap for food wastes particularly cantaloupe rinds.

[HWBII]

As a dog owner might I point out it's also excellent on walks.

[racom]

Personally I think it could be improved. Just leave the ink off the pages, no stain when you wipe with it!!!

[nobamanation]

Looks like Bush and the Repubs did try to prevent this back in 2003:

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=1

"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"

"Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats"

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts

Stolen from optech007 on http://www.huffingtonpost.com/robert-l-borosage/a-debate-worthy-of-a-grea_b_126746.html#postComment

[racom]

Your name says it all. None the less I will add that any change in oversight proposed by the Bush administration has to be suspect. We all know the de-regulation policy and position of the republicans, so when they are proposing any change, it looks much like the fox guarding the hen house. Plus Frank had a valid point while working to keep the mortgage market open for the lower income group.
One other add on,
http://www.huffingtonpost.com/nathan-gardels/stiglitz-the-fall-of-wall_b_126911.html

[CatfishAndGrits]

Bush actually wanting "rules". Riiiiiight.

If my memory serves me, Bush was trying to make Freddie and Fannie more privatized. And as for this "new" agency, we don't need one. We have the SEC (Security Exchange Commission), which is suppose to monitor banking AND INVESTMENT practices. This new oversight agency was nothing more than a new entity to be lobbied. It would not have solved the problem.

[joebaggadonuts]

Murdoch runs the show, don't expect truth. We don't expect it, but I know that it sucks to see the printing of such garbage instead of the whole truth by the formerly most respected financial press in this once greatest nation on earth.

[HWBII]

It's a pity that trees have to die to print this excrement they put out. Maybe we can spare one or two more to ask them TO PRINT BARNEY FRANK'S RESPONSE. Intellectual dishonesty is a hallmark of the right, e.g. Michelle Malkin, Ann Coulter, Rush Limbaugh, Bill Kristol, etc., etc.

[Rickityrick]

Barney Frank is America's Senator. One of the last honest men in Washington.

[racom]

I think that would be Bernie Sanders, Barney Frank is a congressman.

[Danny]

Both Bernie and Barney are keepers!

[HWBII]

As a transplanted native of Massachusetts I can't agree with you more. I love Barney Frank.

[HWBII]

P.S. My only consolation is that Henry Waxman is my representative.

[woodywest]

"America's Senator" ? No thanks, you can keep him for yourself. It is bad enough here in Iowa to be cursed with Senator Harkin's lifetime term.

[themodernleader]

How could two organizations given special interest rates be allowed to spend 160 million of so dollars to lobby? The very act of lobbying by such organizations is corruption. Such sums suggest large pay offs.

[LiberalandLovingIt]

Thank you Congressman Frank - Keep up the good work!

[tompoe]

It's time Frank and everyone else realizes the corporate media is not going to reach the audience that matters. Better, he focus on using HuffPost and other sites to get his message out. Once out on the Internet, the corporate media can pick up the message and pass it along. The WSJ needs to die a slow, painful corporate media death.

[TooLooze]

WSJ has been wrong about everything for at least the last decade. It is not surprising that they would blame the Senator for everything bad, nor is it surprising that they would not run his letter or a retraction of their original article. The media will not pick up on this except to repeat WSJ falsehoods.

I don't understand why the other Democratic Senators and Representatives are not screaming about this. This is why we keep losing elections. Senator Frank is a decent and honorable person who is not being supported by his peers.

[Amazed42]

Thank You Congressman Frank for letting the normal citizen know and understand that you are an honest and hardworking member of the government looking out for the little guy, and thank you for setting the record straight as to who asked for the changes that were made and brought us to this point in the financial markets....

Once again thank you very much for your honesty and hardwork..

[leftLibertarian]

No taxpayer bailout for Fannie and Freddie. Let the chips fall as they may.