Barney Frank's Conflicting Words on Housing
Representative Barney Frank, the House's point person on financial reform, said on "Power Lunch" this week that he never supported the expansion of home ownership:
One of my biggest differences with the Bush and even with the Clinton administration was that they overdid that. I have always been critical of this effort to equate a decent home with homeownership. We should have done more to get affordable rental housing. My efforts have been towards affordable rental housing. I was very much in disagreement with this push into home ownership. I think the federal government should not be artificially doing that. (See video)
Compare that to what he said back in 2005:
This is a very important resolution, particularly at this time. Because we have, I think, an excessive degree of concern right now about home ownership and its role in the economy. Obviously, speculation is never a good thing. But those who argue now that housing prices are now at the point of a bubble seem to me to be missing a very important point.
Unlike previous examples we have had, where substantial excessive inflation of prices later caused some problems, we are talking here about an entity, home ownership. Homes, where there is not the degree of leverage that we've seen elsewhere. This is not the dotcom situation, where you had problems when people invested in a business plan where there was no reality. People building fiber optic cable for which there was no need.
Homes that are occupied may see ebb and flow of price at a certain percentage level, but you're not going to see the collapse that you see when people talk about a bubble. So those of us on our committee will continue to push for home ownership. (See video)
These conflicting statements raise the following question: Why should we believe Congress gets financial regulation right this time around when a guy who is unanimously lauded as extremely smart (whether you like him or not) can be so wrong about housing? And so revisionist of where he stood on the expansion of home ownership?
I would add the following. I never asked him about past policies. I asked him about what the future policy should be, and yet, he couldn't help himself. He felt the need to go backward and defend himself again.
A spokesman for Frank told me the Congressman's 2005 remarks were part of a longer statement on the House floor during debate of a Republican initiative known as National Homeowner Month. (Read full transcript here). The spokesman also said Frank supported homeownership as part of "comprehensive housing policy" and worked with the GOP to pass Fannie Mae and Freddie Mac reforms and anti-predatory lending legislation.
Watch the full interview here.