Barney Frank Sounds Realistic For Once

Reading Hank Paulson's book about the financial crisis gave me some insight into the behind the scenes (as in out of range of cameras) effectiveness of Barney Frank as a legislator. If Paulson is to be believed, Frank was quite influential and helpful in averting a worldwide financial melt-down.

But he's always been a shill for Fannie Mae and Freddie Mac, two organizations long ago gone astray.

But there's hope, apparently. Frank made some comments yesterday that the investor class is taking very seriously--specifically, that investors (either in debt of equity) in Fannie Mae and Freddie Mac SHOULD NOT see these investments as equivalent to buying T-bills. In essence, he's telling investors he's not prepared to back up (without reservation) these organizations should they again go belly up (for the record, I think they are already there).

This is a good sign, and Frank is sending a good signal. The quicker these institutions are killed or spun off the better. Frank bringing additional reality to how they are perceived is helpful, as is his assertion that federalizing them further is not advisable.