You Say Obstruction, I Say Due Process
Hedge fund manager William Frey found it unfair that Congress sought to change the terms of mortgages held by his firm. Thus he spoke up, got quoted in the New York Times, and noted that he planned to challenge the relevant law. This is how things work in a democracy, as Radley Balko points out in the post that drew my attention to this somewhat dated matter.
What happened next ought to cost six House Democrats their jobs. Rep. Barney Frank, Rep. Paul Kanjorski, Rep. Maxine Waters, Rep. Luis Gutierrez, Rep. Carolyn Maloney, and Rep. Melvin Watt sent Mr. Frey a thuggish letter so transparent in its attempt to intimidate him that it serves as an object lesson in the perils of an economic system run according to Congressional conceptions of fairness. All this holds whatever you think of the specific legislation’s merit, on which I take no position here.
The letter:
Dear Mr. Frey:
We were outraged to read in today’s New York Times that you are actively opposing our efforts to achieve a diminution in foreclosures by voluntary efforts. Your decision is a serious threat to our efforts to respond to the current economic crisis, and we strongly urge you to reverse it. Given the importance of this to the economy and to what it means for future regulatory efforts, we have set a hearing for November 12, and we invite you to now testify. We believe it is essential for our policymaking function for you to appear at such a hearing, and if this can not be arranged on a voluntary basis, then we will purse further steps.
For the hedge fund industry, which has flourished for much of the past decade, to take steps so actively in opposition to what is currently in the national economic interest is deeply troubling and will clearly have serious implications for the rules by which we operate in the future if this posture of obstruction of our efforts is maintained.
We very much hope you will be able to tell us very soon that you have reversed your position of trying to obstruct the operation of the bill that was overwhelmingly passed by Congress and signed by the President this summer, and we hope you will also affirm your presence at the hearing on November 12.
Among other reasons, this letter is outrageous insofar as it implies that when a bill is passed by Congress and signed by the president, a citizen is acting outrageously by challenging it in court, or expressing disagreement to a newspaper reporter. Imagine if after the passage of the Patriot Act, six Republican Congressmen would’ve written the head of a human rights NGO, threatening to drag them before Congress in a public hearing designed to embarrass or inconvenience them because they dared to oppose a bill “overwhelmingly passed by Congress and signed by the president.” What these Democrats are doing, utterly shamelessly, is every bit as bad.
I also like this line: “Given the importance of this to the economy and to what it means for future regulatory efforts, we have set a hearing for November 12” – it’s so important that we’ll start talking about it in 6 months.
— Randy · May 20, 09:35 PM · #
I see now that it was all done last October/November. My mistake.
— Randy · May 20, 09:48 PM · #
Imagine if after the passage of the Patriot Act, six Republican Congressmen would’ve written the head of a human rights NGO, threatening to drag them before Congress in a public hearing designed to embarrass or inconvenience them because they dared to oppose a bill “overwhelmingly passed by Congress and signed by the president.” What these Democrats are doing, utterly shamelessly, is every bit as bad.
Ummm… no.
— Freddie · May 21, 03:49 PM · #
As Freddie points out, dissent against Bush was patriotic, but dissent from Obama’s policies is treason and must be treated as such. I wasn’t convinced before, but who can argue with “Ummmm . . . no”?
Side note: Why does “ummmm . . . no” connote that the listener is stupid, but “d’ur . . . no” connote that the speaker is stupid?
Doesn’t “ummm,” as it is normally used, mean that Freddie can’t think of anything substantive to say? Instead, we have an interesting reversal, where Freddie is saying that you are so self-evidently stupid that no substantive response is possible.
— J Mann · May 21, 03:54 PM · #
While I can appreciate the Democrats’ point of view, I have to say, as a procedural equality kind of guy, I’m with Conor: Due process is how things get done. Either your laws and policies are good enough to withstand scrutiny or they’re not. Either they follow or modify existing laws to permit their implementation, or you didn’t do your homework and they don’t. If your new legislation or policy can’t withstand scrutiny, it’s bad.
— James F. Elliott · May 21, 04:12 PM · #
Ummmmm….. yes. What is at issue is whether a citizen, feeling his rights are being violated, has the right to seek protection from the courts. Another branch of government seems to be trying to intimidate the citizen away from that protection. That’s as draconian as anything in any real or imagined Patriot Act, it’s inappropriate, and it’s profoundly illiberal. Which, said by me, adds nothing to the original post: but anyone who thinks the post is obviously wrong, is a twit.
— Sanjay · May 21, 04:39 PM · #
but who can argue with “Ummmm . . . no”?
Wait, you’re mischaracterizing his argument — he used only three Ms, not four. Of course it sounds silly with four Ms.
— kenB · May 21, 05:36 PM · #
Doing this to a hedge fund guy is much worse than the hypothetical subpoena to an NGO head. For an NGO, the publicity would have been a dream come true. Nadine Strossen probably would have paid the GOP to do it to her. For a hedge fund, this is a nightmare, because you will worry that current and potential investors will be afraid that you are going to be blackballed. (For a fairer hypothetical, you could use an airline CEO that objected to the Patriot Act.)
— tom · May 21, 06:57 PM · #
Well, OK, tom compounds a terrible “argument” with a terrible rebuttal. The hedge fund guy after all has his own backing, too. I don’t know which is worse. I know both cases are lousy.
— Sanjay · May 21, 07:38 PM · #
Maybe Freddie was resisting the imperative.
Conor: “Imagine so and so.”
Freddie: “I will not.”
— Sargent · May 21, 08:24 PM · #
Strangely enough, I imagine that six members of Congress found it unfair that people like William Frey were able to take actions that effectively sabotaged the entire US economy and suffer absolutely no consequences whatsoever.
You know, but of course it’s the poor hedge fund managers who are put upon, not the millions and millions of Americans who suddenly found themselves jobless and homeless as a result of what were basically corporate casinos in the guise of banks.
— Chet · May 21, 09:56 PM · #
<i>I imagine that six members of Congress found it unfair that people like William Frey were able to take actions that effectively sabotaged the entire US economy and suffer absolutely no consequences whatsoever.
</i>
If only there were some elected body a couple of years back that could have passed laws to prohibit whatever it is that they find unfair. If only . . .
— Adam Greenwood · May 21, 10:02 PM · #
Strangely enough, I imagine that six members of Congress found it unfair that people like William Frey were able to take actions that effectively sabotaged the entire US economy and suffer absolutely no consequences whatsoever.
You know, but of course it’s the poor hedge fund managers who are put upon, not the millions and millions of Americans who suddenly found themselves jobless and homeless as a result of what were basically corporate casinos in the guise of banks._
Congress, as the previous poster pointed out, has always been a position to restrict behaviour they find objectionable through regulatory or legislative avenues.
Moreover, do you have any evidence whatsoever that William Frey was responsible in any way whatsoever for the financial crisis? Most hedge funds remained solvent throughout the crisis and were not as heavily exposed to bad debt as the major banks were. Hedge fund managers certainly do not deserve to be uniquely demonised, threatened by elected members of Congress and have both their opinions and their right to legal recourse rejected.
— Peracles · May 22, 02:33 PM · #
I believe the relevant part of the statement is “…Congress sought to change the terms of mortgages…”
When lenders can’t trust that Congress will keep from meddling in “done deals” for the express point of reducing their profits, they will be very hesitant to loan out money. Duh. Take a look around.
You want commerce? Then the law has to be the law; a contract has to be a contract. Period. Business has to be able to reasonably predict its costs and profits in order to function. If business can’t function, the economy tanks.
— A_Nonny_Mouse · May 25, 03:35 AM · #