It’s a challenging time to be the chairman of the nation’s House Committee on Financial Services. “It can be a little intimidating,” said U.S. Rep. Barney Frank during a meeting with constituents at the Lakeville, Mass., Library over Coffee and doughnuts. But while the economic problems encountered today are as new as the latest BlackBerry, meeting the challenges they pose has historic precedent. “We’re a free market, capitalist society, and that’s the best way to generate wealth,” he said. And the ability to generate wealth evolves over time and can outstrip regulation. The nation’s industrialization in the late 19th century provided huge benefits, but also brought negative side effects. Before there were trusts, there was no need for the anti-trust legislation put forth by Theodore Roosevelt and Woodrow Wilson. The stock market evolved in the 20th century and similarly brought huge financial benefits and abuses, as well, that were addressed by Franklin Roosevelt and the creation of the Security and Exchange Commission. Today’s technology enables money to move around the globe with a mouse click and helped enable financial phenomena such as securitization. In the old days, you trooped to your bank or credit union and had to prove you could come through on a 30-year mortgage to a lender who would be taking the risk that you could deliver. With securitization, loans – credit debt and car loans included – are packaged together and ...
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