Thursday, March 5, 2009
Congressman Barney Frank Wants to Prosecute the People Who Caused the Meltdown - Has No Specific Targets in Mind
The chairman of the U.S. House Financial Services Committee - Barney Frank - wants to prosecute those who caused the financial meltdown, although he has no targets in mind.
I'd like to provide a list of where Congressman Frank might start:
- Of course, there is Madoff and Stanford, the guys who ran multi-billion dollar Ponzi schemes
- And there are the senior military officials who stole approximately $125 billion dollars out of money earmarked as Iraq reconstruction funds
- And there are the rating agencies, which committed massive fraud
- And there are the Treasury department officials who allowed banks to "cook their books"
In reality, the list could go on and on.
Indeed, while it might not be criminal, Frank himself bears some responsibility for the crisis. He has thrown trillions of dollars of hard-earned taxpayer money down the drain, in concert with Bernanke, Geithner, Dodd, Pelosi and the gang. Mish slams Frank on that count.
But there's something above and beyond that:
Frankly, boneheads on both the left and the right caused the meltdown.
Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, when the Bush administration proposed much tighter regulation of the two companies, Frank was adamant that "these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis." When the White House warned of "systemic risk for our financial system" unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing.
Now that the bubble has burst and the "systemic risk" is apparent to all, Frank blithely declares: "The private sector got us into this mess." Well, give the congressman points for gall. Wall Street and private lenders have plenty to answer for, but it was Washington and the political class that derailed this train. If Frank is looking for a culprit to blame, he can find one suspect in the nearest mirror.