Fannie, Freddie, Barney

One of the lies being promoted by Fox News, McCain, and the rest of the right wing noise machine is that Barney Frank, in some kind of collusion with Fanny Mae and Freddy Mac, created the sub-prime mortgage mess. Like every good lie, there is a crumb of truth surrounded by vast distortion. That crumb of truth is that Fanny and Freddy did jump on the subprime bandwagon but only after it had already exploded. The legislation that permitted that, however, was passed during Republican control of congress. The other crumb of truth is that Fannie and Freddy were cozy with congress, but that coziness that benefitted many members of both parties, but mainly Republicans.

The Republican myth forgets many crucial details, including the fact that the subprime explosion started long before F&F got involved, was dominated by private lenders, that Barney Frank sponsored legislation to regulate F&F (which was killed by Republicans) and that the subprime mess was, is, and will continue to be centered outside F&F.

The current meltdown started with the purely private (and unregulated) investment banks and their problems stem from their own errors and greed, not from F&F.

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