Not many politicians had seen the mortgage crisis coming, at least not to my knowledge. And almost no one -- except a friend of mine, Bill Ackman- - had envisioned the disaster that would emerge in its wake. Oh yes, there was also one politician, Congressman Barney Frank, who saw it all, as far as I can tell. That is, what I can tell now.
Lawrence Lindsay, who was President Bush's chief economic adviser from 2001 to 2002, published a piece Wednesday in the WSJ, titled "The KISS Rule for Markets," in which he explains why excess ruled and what is needed to keep it and avarice from ruining the economy again. In this article he asserts about Barney: "In fact, Rep. Barney Frank (a Democrat from Massachusetts) is the only politician I know who has argued that America needed tighter rules that intentionally fewer homeowners and more renters. Politicians usually believe that homeownership rates should -- must -- go ever higher. The rarity of Mr. Frank's contrarian thinking is a reminder that when markets are committing excesses, we certainly should not expect Washington to act as a check on them."