In the Arena

Barney Frank for Senate?

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I’ve known Barney for more than 40 years and he’s been a terrific public servant, with one exception: his non-oversight of FNMA (Fannie-Mae) as House Banking Committee chair. That should eliminate him from consideration as even a temporary Senator.

Barney is smart and clever, and very funny. He has fought the good fight on issue after issue. But he went AWOL when it came to Fannie-Mae and Freddie-Mac, the two semi-sorta-but-really-not-non-governmental mortgage banks whose cheesy practices led to the raft of ridiculous and crooked mortgage lending that, in turn, led to the Wall Street speculation that led, in turn, to the Great Recession.

Frank’s initial rationale was a good one: home ownership is a good thing. As many Americans should own homes as is economically reasonable–but not every American. As Gretchen Morgensen and Joshua Rosner write in Reckless Endangerment, Fanny and Freddie began pushing the limits in the late 1990s, backing sub-prime mortgages, mortgages without downpayments, mortgages without any research at all into whether individuals could reasonably pay for the houses that they were trying to buy. Its executives pulled massive salaries and bonuses–and made massive campaign contributions.

Both Barney and Chris Dodd, his Senate counterpart, enjoyed the largesse and looked the other way–and worse. Frank secured a job at Fannie-Mae for his partner. Dodd received a sweetheart loan from the mega-sleazy Angelo Mozilo, the scoundrel in charge of Countrywide Mortgages. Neither of them took the massive Fannie and Freddie housing abuses seriously enough to investigate. Even if we want to be kind, that kind of negligence argues against any further Congressional service for Frank–not even the temporary appointment to the Senate to replace John Kerry until a special election can be held. Indeed, the Dodd-Frank era of federal oversight–including the actions of new ranking Democratic member of the House Financial Services Committee, Maxine Waters– should be the subject of a Congressional inquiry.

Democrats have a special responsibility to rigorously police the government programs they favor. In the midst of a long and thoughtful career as a politician, Barney Frank sadly neglected this duty–and helped caused an economic calamity that wiped out the life savings of millions of people he claimed to represent. He shouldn’t be rewarded for that with a Senate seat; quite the opposite, he needs to find a way to make amends.