Barney Frank Calls Out Wall Street Journal for Grossly Mis-Stating Facts

by Deb Cupples |   The Huffington Post reprinted a letter to the Wall Street Journal's editorial board by House  Financial Services Committee chairman Barney Frank (D-MA), which points out an error-filled editorial about Rep. Frank.  Parts of the letter are below.

"Editor:

"I am used to having my views severely distorted by the Wall Street Journal Editorial Board - in contrast to the accurate representation that its reporters present. But the opening of the editorial on December 3rd doesn't distort - it gets the truth absolutely backwards. In short, the Journal's assertion that I have 'spent [my] career encouraging mortgage loans to people who can't repay them,' is not only entirely inaccurate; it blames me for policies that the Journal has itself defended.

"I have consistently argued that the push for homeownership that existed in the Clinton administration, but was significantly upgraded in the Bush administration, made the mistake of assuming that virtually all people could be homeowners. In contrast, I argued that the majority of low-income people should be aided by policies that promoted affordable rental housing.

"For example, on February 18, 2002, at a hearing on the budget I said 'I am in favor of trying to help lower-income people get the advantages of homeownership...but almost by definition, the large majority of poor people are going to need rental housing.' On March 6, 2004, the National Journal reported that 'When the FHA's plan to insure subprime loans was included in a Senate-passed appropriations bill, Frank...a staunch supporter of low-income housing, wrote a highly critical letter urging that the measure not be included ... Not only had the House committee not examined ...the proposal he said then, but the measure also offered no protection against lenders inappropriately steering people towards these high-cost loans. Nor did it offer safeguards to ensure that participants 'were fully suitable for homeownership.'

"That same year, when the Bush administration insisted that Fannie Mae and Freddie Mac raise the percentage of below-median income homeowner mortgages they bought, I was correctly quoted in a Bloomberg article on June 17th as saying that this would 'do some harm,' and the writer noted that 'Frank's comments echo concerns...that the new goals will undermine profits and put new homeowners into dwellings they can't afford."

"It was a consistent series of statements like that on my part, and efforts to act on them --although these were often unsuccessful when I was in the minority -- that led frequent Republican economic appointee and Wall Street Journal contributor Larry Lindsey to write in April of this year that "Barney Frank is the only politician I know who has argued that we needed tighter rules that intentionally produce fewer homeowners and more renters. Politicians usually believe that homeownership rates should - must - go ever higher."

"In fact, I was one of the supporters in 1994 of the legislation that directed the Federal Reserve to restrict inappropriate mortgages at the subprime level, and I also lamented Alan Greenspan's refusal to implement this - a refusal which he in a forthright manner acknowledged recently was a grave error. When he refused to do this, I and others in Congress, mostly but not only Democrats, pushed for legislation to restrict subprime mortgages....

"...[W]hen the Democrats achieved a majority in 2007, and I became Chairman of the Financial Services Committee, the first major piece of legislation the committee approved was a bill adopting the regulatory upgrade for Fannie and Freddie that had been strongly advocated by the Bush administration, but which it had been unable to get the Republican Congress to pass. Next, we moved on to anti-predatory lending legislation and succeeded later in 2007 in passing a bill that, had it been law earlier - when we were in the minority and unable to enact it - would have prevented most of the bad loans." (HuffPo)

If everything that Rep. Frank says is true, then the Wall Street Journal's editorial board either 1) didn't bother doing fact-checking or 2) deliberately lied about Frank's official actions in Congress with respect subprime loans.

Neither would be good for the WSJ's crediblity.  If true, it wouldn't be surprising, given that Rupert Murdock owns the Wall Street Journal.  Look at how the folks who work for Murdock over at Fox conduct themselves: editorials mis-labeled as unbiased news and riddled with factual errors.

At least, that's my overall impression of how Fox conducts itself. 

WSJ readers should be outraged.  Given that many WSJ readers rely on the WSJ for information on which they base their investment decisions, those readers will likely have to go elsewhere for their news or risk losing money.

Memeorandum has commentary.

Comments

[david mangan]

If everything that Rep. Frank says is true gives this corrupt degenerate a lot of credibility.....

And it's Rupert Murdoc[h]...

[Charles II]

David, you paint with a very broad brush. Barney Frank has been one of the better people in Congress.

As for the Wall Street Journal editorial page, it would be more surprising if it ever told the truth. The change to ownership by Murdoch was a blow to the news side, but it may actually have been a slight benefit to the editorial side, if only because he would be unlikely to promote such barking madness as claiming that Vince Foster was murdered *after* Ken Starr had said he had not.