Tucker Carlson claimed that the mortgage crisis "emanated from Fannie Mae and Freddie Mac," and asserted that one of the "reasons this crisis began ... was federal pressure to increase homeownership, and Barney Frank was in an oversight position during that process and didn't do a lot to stop it." In fact, Frank did not become chairman of the House Financial Services Committee until 2007, and it was not until Democrats gained a majority in Congress that legislation strengthening oversight of Fannie and Freddie passed.
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During the March 19 edition of MSNBC's Morning Joe, former MSNBC host Tucker Carlson claimed that the "crisis in mortgages ... emanated from Fannie Mae and Freddie Mac," and then asserted: "[T]here are a lot of reasons this crisis began, but one of them was federal pressure to increase homeownership, and [Rep.] Barney Frank [D-MA] was in an oversight position during that process and didn't do a lot to stop it." In fact, Frank was not chairman of the House Financial Services Committee until 2007; prior to that, Republicans controlled both houses of Congress and failed to pass oversight legislation. Indeed, it wasn't until Democrats gained a majority in Congress that legislation strengthening oversight of Fannie and Freddie passed.
As Media Matters for America has repeatedly noted, in early 2007, as the new chairman of the House Financial Services Committee, Frank sponsored H.R. 1427, a bill to create the Federal Housing Finance Agency (FHFA), granting that agency "general supervisory and regulatory authority over" Fannie and Freddie and directing it to reform the companies' business practices and regulate their exposure to credit and market risk. The FHFA was eventually created after Congress incorporated provisions that House Speaker Nancy Pelosi (D-CA) said were "similar" to those of H.R. 1427 into the Housing and Economic Recovery Act of 2008, which former President Bush signed into law on July 30, 2008.
Moreover, before taking over as chairman of the House Financial Services Committee, Frank worked with then-committee chairman Michael Oxley (R-OH) on the Federal Housing Finance Reform Act of 2005, which would have established the FHFA to replace the Office of Federal Housing Enterprise Oversight as overseer of the activities of Fannie and Freddie. After voting for the bill in committee, Frank voted against final passage of the bill on the House floor, stating that he was doing so because an amendment added to the bill on the House floor imposed restrictions on the kinds of nonprofit organizations that could receive funding under the bill.
Frank himself wrote in a March 18 Huffington Post article: "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." Frank continued:
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.'
Fannie and Freddie got into subprime junk and helped fuel the housing bubble, but they were trailing the irrational exuberance of the private sector. They lost market share in the years 2002-2007, as the volume of private issue mortgage backed securities exploded. In short, while Fannie and Freddie were completely irresponsible in their lending practices, the claim that they were responsible for the financial disaster is absurd on its face -- kind of like the claim that the earth is flat.
From the March 19 edition of MSNBC's Morning Joe:
CARLSON: This all began, or partly began, with the crisis in mortgages. And that emanated from Fannie Mae and Freddie Mac, right here in what -- right near where I'm sitting right now. And those were overseen by the federal government. I mean, there are a lot of reasons this crisis began, but one of them was federal pressure to increase homeownership, and Barney Frank was in an oversight position during that process and didn't do a lot to stop it -- lending to --
JOE SCARBOROUGH (co-host): Well, and --
CARLSON: -- people --
MIKA BRZEZINSKI: Yeah.
CARLSON: -- who couldn't pay it back.
SCARBOROUGH: Let's play --
BRZEZINSKI: Play --
SCARBOROUGH: -- a couple --
BRZEZINSKI: Absolutely. Let's show it.
SCARBOROUGH: Let's show a couple of clips.