Barney Frank wants to make sure subprime lenders never go buck wild, lending too much money to poor homebuyers ever again.
The powerful chair of the House Financial Services Committee is set to introduce new financial legislation, all of which seems geared to fighting the last problem, rather than anticipating what the next problem will be.
All this is well and fine, but come on, does Barney Frank really think that the next crisis — and you know we’ll see plenty more — is going to look like the last? Does Frank really anticipate that if things got back to normal, banks would immediately start ignoring homeowner credit risk.
Now of course people will do dumb things and make mistakes, but we’re actually pretty confident that risky subprime lending would be the last thing they go back to, since the lost money has been so severely seared into everyone’s minds.
No, they’ll do something else that feels totally safe, secure and AAA and trip over each other to pile all their chips into it.