If we were Barney Frank and we were asked what we might’ve done differently in retrospect, a few obvious things would come to mind. Like, maybe, we’d regret standing athwart the regulation of Fannie Mae (FNM) and Freddie Mac (FRE). You know, stuff like that.
Alas, the powerful Congressman was asked about this in a recent interview with GQ. Here’s what he said:
When you look back at decisions you made regarding banking and regulation, what would you do differently?
I would have pressed harder for regulation of hedge funds and other things. We tried. But the whole Senate was against us. And, uh, we did try hard on subprime. We got shut down. I guess regulating hedge funds, derivatives, I backed off too easy because of the opposition. I don’t think we would have succeeded, but we should have pushed harder.
Now, the subprime and derivatives stuff was fine, though the fact that he backed off so easily suggests he didn’t think it was much of a problem. But still, what’s with the relentless focus on hedge funds? They’re politically popular targets, and the fact that they’re unregulated makes it easy to say that they should be, but they’re not the root of the problem, and they never needed a bailout.
As for his readon history, he says it’s all Bush’s fault, not Clinton’s at all:
How much does Bill Clinton deserve blame for—
Oh, very little. The bad loans, subprime loans, are the cause of this. [Pulls out a chart.] This is a chart as to what percentage of overall loans were subprime loans that went bad. Of the loans that went bad, what percentage were subprime loans? Look at that chart. Look when it starts to spike. [It starts to spike in 2003.] And here, this one too. [He pulls out another chart.] Loans in foreclosure by type. They’re all together, and then the subprimes—
Start to spike in 2003.
We gotta make our argument to the Republicans. Many of us wanted to build affordable rental housing for low-income people. They said, “Oh, rental housing is not good; it’s bad for people’s spirits. We want them to become homeowners.” So the Bush administration pushed hard to make people homeowners, and that was the result.
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