IS BARNEY FRANK AS BAD AS KEN LAY?

Most of you probably don't know who Rep. Barney Frank (Mass-D) is, but you should. Representative Frank heads one of the most powerful committees in the U.S. House of Representatives. He is the Chairman of the House Financial Services Committee. This committee oversees the entire U.S. financial services industry, including the securities, insurance, banking, and housing industries. The Committee also oversees the work of the Federal Reserve, the United States Department of the Treasury, and the U.S. Securities and Exchange Commission. In short, our entire finances that are now in utter chaos.

However, I'm not blaming him for the disaster that lays at our feet. What I am blaming him for is his sunny assessment of our finances even as it was crumbling like the Roman Empire.

First, let me make one thing abundantly clear. I put the majority of the blame for our financial mess on the Republicans. In fact, I would say this is about 70% the fault of the Republicans and 30% the fault of the Democrats. The reason I say this is because throughout the lead-up to this mess, it was the Republicans that controlled Congress the vast majority of the time. Looking back through the past 7 Congresses (Congress changes every two years), the Reps controlled the House for 12 of the past 14 years! They also controlled the Senate for 10 of those 14 years and had the Presidency for the past eight. With that kind of control it's hard to believe this wouldn't be mostly your fault even if you just left it alone. During those years I believe a deal was struck between the Reps and the Dems that caused this whole mess. The deal went like this; The Democrats wanted more loans for their constituents, (I.E. minorities, poor whites and inner cites that were decaying) and the Republicans wanted deregulation of the financial sector. Since the problem was that no banks wanted to be passing out loans for high risk cities and people, the Republicans found the solution. Deregulate the industry, they give out sub-prime loans and in return they get to bundle the loans and sell them on the open market (something that wasn't allowed before). The Rep constituents get to make profit and farm-out the risk, the Dem constituents get the loans that they couldn't (and probably shouldn't) have gotten before.

Now, here's were the Democrats get their blame.

Once the Democrats found themselves back in the driving seat of Congress, do they start shouting from the highest hills that our finances are a mess? No. Barney Frank gets put into a position that oversees the entire financial services industry, and what does he do? Does he immediately sound the warning bell that all is not right in our financial house? No. Instead he does exactly what Ken Lay, the CEO of Enron, did to his stockholders...he lied. He said that Freddie Mac and Fannie Mae were sound even as the bricks were falling off the buildings. He knew that there would be political capital to pay by the Dems if Fannie and Freddie were exposed as unsound, so he hid that fact from the people, the press, and most importantly, from the people who owned Freddie and Fannie stock.

When we pulled out the torches and pitchforks and went hunting Ken Lay after the Enron fiasco, the luckless stockholders had lost over $60 billion dollars and a whole business went down the tubes. The reason we went after Ken Lay and his cohorts with such zeal is because of the innocent investors that lost their savings. Ken Lay's lies cost people their livelihoods. Now, compare that to what Barney Frank's lies have cost us. It's hard to put an exact figure on the amount lost, but here's what we do know. Fannie and Freddie hold a combined stake of over a trillion in mortgages. Their stock has fallen by 90% over the past year, costing investors tens of billions if not hundreds. We the taxpayers are on the hook for an estimated $200 billion and they're still asking for more.

But, before you go blaming only the Democrats for Freddie and Fannie, take a look at how they spread out their lobbying dollars.

The bottom line on all this is that while Ken Lay got what he deserved for his lying and treachery, Barney Frank has walked completely away from his role in the collapse of a giant industry that controlled nearly half of all our mortgages and contributed (if not caused) the current situation we're in. For him to stay in a position with that magnatude of power when he's already demonstrated that he can't be trusted to tell the truth is criminal. I'm calling for a full "what he knew and when he knew it" investigation into Rep. Frank and his office. Is Barney Frank as bad as Ken Lay? No. He's far worse, and he's on our payroll. H.C.