Barney Frank, right on prediction markets, wrong on pretty much everything else. O'Reilly is a huge blowhard with a huge head, but I agree that Frank is lying. Here are some quotes from 2003 that contradict his statements above:REP. BARNEY FRANK, D-MASS.: I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under. They're not the best investments these days from the long-term standpoint going back. I think they are in good shape going forward.
They're in a housing market. I do think their prospects going forward are very solid. And in fact, we're going to do some things that are going to improve them.
(END VIDEO CLIP)
O'REILLY: Well, obviously, that statement turned out not to be true.
Joining us now from Washington is Congressman Frank. And we appreciate you coming in, being a standup guy, but shouldn't everybody in the country be angry with you right now?
• Video: Watch 'The Factor' face-off
FRANK: No. You've misrepresented this consistently. I became chairman of the committee on January 31st, 2007. Less than two months later, I did what the Republicans hadn't been able to do in 12 years — get through the committee a very tough regulatory bill. And it passed the House in May.
I've always felt two things about Fannie Mae and Freddie Mac, that they had an important role to play, but that the regulations should be improved.
Now from 1995 to 2006, when the Republicans controlled Congress and we were in the minority, we couldn't get that done. Although in 2005, Mike Oxley, of Sarbanes-Oxley fame, a pretty tough guy on regulation, did try to put a bill through to regulate Fannie Mae. I worked with him on it. As he told The Financial Times, he thought ideological rigidity in the Bush administration stopped that.
But the basic point is that the first time I had any real authority over this was January of 2007. And within two months, we had passed the bill that regulated.
O'REILLY: OK. And that's true, all of that is true.
FRANK: And then also, one other point: The Senate was dragging its feet, as often happens. And in January of 2008, I asked Secretary Paulson to put in the stimulus bill. So, the earliest chance I got to put tough regulation of Fannie Mae and Freddie Mac, we did it.
O'REILLY: All right, that's swell. But you still went out in July and said everything was great. And off that, a lot of people bought stock and lost everything they had.
...O'REILLY: Don't — look, stop the B.S. here. Stop the crap! From August '07 to August '08…
FRANK: You know, here's the problem going on your show...
O'REILLY: …under your tutelage, this industry…
FRANK: Here is the problem going on your show.
O'REILLY: …declined 90 percent. 90 percent.
FRANK: Yes, but…
O'REILLY: Oh, none of this was your fault! Oh, no. People lost millions of dollars. It wasn't your fault. Come on, you coward! Say the truth.
FRANK: What do you mean coward?
O'REILLY: You're a coward. You blame everybody else. You're a coward.
FRANK: Bill, here's the problem with going on your show. You start ranting. And the only way to respond is almost to look as boorish as you. But here's the facts. I specifically said in the quote you just played that I didn't think it was a good investment. I wasn't telling anybody to buy stock. I said it wasn't a good investment.
Secondly, I wasn't presiding idly over this. I was trying to get the regulations adopted. We got them adopted in May.
O'REILLY: Look, bottom line is you're there two years. Bottom line is stock drops 90 percent.
FRANK: Yes.
O'REILLY: In any private industry, you're out.
FRANK: We couldn't get…
O'REILLY: In any private concern, you're out on your butt. But not here in the federal government.
I worry, frankly, that there's a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . . .
I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .
Rep. Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated?
Mr. Raines?
Mr. Raines: No, sir.
Mr. Frank: Mr. Gould?
Mr. Gould: No, sir. . . .
Mr. Frank: OK. Then I am not entirely sure why we are here. . . .
Rep. Frank: I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists.
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