April 17, 2009
Categories: Economy

Barney takes on The Journal

The Wall Street Journal editorial board took its whacks at Barney Frank (D-Mass.) this morning — and the House Financial Services chairman returned fire in a phone interview with POLITICO.

The editorial lambasted Frank's proposal to provide FDIC-type insurance for some types of municipal bonds to help reduce the financing costs for governments incurred after major bond rating firms downgraded them as a group.

The editorial began with:

"Barney Frank's track record as a financial analyst is, shall we say, mixed. The House Financial Services Chairman said for years that a collapse of Fannie Mae and Freddie Mac would pose zero risk to taxpayers. For most people, a mistake of that magnitude would trigger introspection, if not humility. But not the sage of Massachusetts. He's cooking up another fantastic subsidy — and like the last one, he swears taxpayers won't feel a thing. In his words, 'it would cost the federal government zero.' Uh oh."

Frank shot back, arguing that the piece suggested he was talking about insuring all bonds, when he intends to cover only some issues:

"It’s a typically dishonest Wall Street Journal editorial," he said. "The Wall Street Journal, with its conservative bent, doesn't like any public sector spending whatsoever. ... They are a right-wing voice and they have attacked me in the past and will continue to attack me in the future."

While I had him on the phone, I threw out a question about Texas Gov. Rick Perry's suggestion that his state might secede over Democrats' tax policies.

"I won't comment on him for the same reason I won't comment on Elvis sightings," he replied.