Congressman Barney Frank (D-MA) and House Speaker Nancy Pelosi (D-CA), continued the political farce in Washington regarding the financial industry troubles by doing what politicians do best in a crisis: pointing their fingers at anyone but themselves. They allege that the mortgage market collapse, financial industry blow up and yesterday's AIG bailout announcement, are all indicative of "bad" Republican policies, and years of Bush White House failure to properly supervise and regulate the free markets.
The White House has been shown no real leadership on the issue but Congress has more to answer for than President Bush.
Frank and Pelosi, no fans of free market economics policies, seek to add new layers of "significant government regulation" to industries (a) they already regulate, and (b) whose regulations they have continually tinkered with in an effort to influence the economy to support changing political policies, and not sound economic ones.
Frank failed to mention that he already chairs a financial industry oversight committee where he was supposed to be out in front on sound economic strategies.
Pelosi fails to mention that as House leader, she has a mandate to shepherd legislation through Congress to address the pressing economic issue of our day.
Where have they been for the past two years since their party controlled both houses of Congress?
Both have been negligent in their roles, and both cannot escape responsibility for the mess we are in in the mortgage and financial markets today. Because while we can certainly point to unwise decision on Wall Street, we cannot escape the fact that the genesis for the current situation lies squarely at the feet of Washington politicians.
It was Washington, after all, that coerced the banking industry to relax lending criteria to encourage homeownership to people who had no financial ability to repay a mortgage. They also stood idly by (some taking personal advantage of sweetheart mortgage deals from the bank "villains"), while the markets "fiddled", selling loan packages filled with unverified borrowers as quality paper worldwide, an inevitable result of political pressures on banks that were based on emotion and not on logic or sound economic principals.
In the Barney Frank/Nancy Pelosi world, everything would be just fine as long as Congress could micro-manage the way business works. Their theories embrace everything from the environment, to education, to housing and social programs. The only areas where they are shut out, health insurance and banking, are ripe fruits too juicy to ignore.
Yet what is the track record of a Frank/Pelosi solution of heavy government influence in the free market? Bloated bureaucracies laden down with bureaucrats, failed welfare and assistance programs, billions diverted to "fix" public problems without any true measure of success. And who supervises Congress?
More specifically, one need only look at the failures of Fannie Mae and Freddie Mac, two quasi-government agencies designed to make housing affordable for Americans, to catch a glimpse as to what Congressional interference in financial markets mean. Both of these have been historically weighed down by partisan politics, huge patronage payouts (James Johnson and Jamie Gorelick made almost $130 Million alone in salaries that rival any greedy Wall Street executive), and bad policy decisions, all the while under the direct oversight of Congress.
So when Barney Frank and Nancy Pelosi shill for more government involvement in the free markets, they are peddling the same "we know what's best for you" canard that has been the problem of government for years. It's a shame that not even a 9% approval rating for Congress can move these politicians from their insulated perches of self-denial and hubris.