The Right-Wing/Wall Street spin machine attacks the credit crisis.
Friday, October 10, 2008
The banking and housing crisis couldn't be the fault of deregulation - according to the Republicans, it's now the fault of minorities, the poor and the Community Reinvestment Act. (CRA)
John McCain, George Will and the fools of the Wall Street Journal are trying to rescue Reaganism from itself by a concerted effort to refocus the blame away from deregulation.
Slate's Daniel Gross debunks some of these lies in this column.
The CRA doesn't require loans to people who cannot afford them, it requires banks to make loans to people with good credit, who can afford them, but who happen to live in "bad" neighborhoods. In effect, it prohibits certain types of redlining. In fact, the CRA doesn't even apply to the majority of banks who created this mess.
I guess the facts cannot get in the way of a good blame game.
7 comments:
Better than blaming it on a computer screen!
I knew the computers would start shit some day...
But according to McCain and the Wall Street Journal, they were black, poor computers.
You mean "Those one" computers wee at fault?
Both parties have been balming it on deregulation. McCain has blasted Schumer and Frank for fighting against regulation and saying that Fan/Fre were economically sound last summer.
I still don't have a good handle on this, but I have been trying to make sense of this whole situation. As Smitty said, politics is tied up in economics. In some ways, economics is like Sociology and Social Psychology (areas where I do actually know something), in that there are many complex issues that influence how things turn out. It isn't always possible to say A caused F. It is more like A, B, C, D, and E may have cause F, but to what degree each did, there is much debate.
I don't know much about Daniel Gross, except that he doesn't appear to have a background in economics (he has a degree in history), but I would have to say that WSJ is just as credible, if not more credible, when it comes to economic issues than Slate. He also writes for Newsweek, but that magazine has seemed more and more a mouthpiece for the Democratic Party, from what I can tell.
I guess the facts cannot get in the way of a good blame game.
Gross lists some facts, but also gives a lot of opinion and many of his conclusions are based on his opinion. I am not saying he is wrong, but to suggest that the debate is over is not fair.
From what I can tell, there is tons of blame to be spread around. I think it is fair to say that the regulations and laws set up around Fan/Fred have had some influence on what has happened. I think it is fair to say that corporate greed has had some influence. I think it is fair to say that companies made bad loans with the hope that they could pass them off on Fan/Fred.
The problem, IMO, is that this isn't a recent problems. Some of these things have been going on for years. For McCain to blame it on the Schumer, Frank, the Democrats, and the CRA is just not fair. While they were probably part of the problem, so were the Republicans. OTOH, for Obama to say it was just the lack of regulation or the Republicans is not fair. I saw Kerry in an interview a few weeks ago deny that the Democrats had any responsibility in this mess. That is just BS.
I will admit to being nervous. In the beginning, there seemed to be a spirit of bipartisanship, but that seems to have degenerated into the blame game on both sides.
This article suggests that almost all economists suggest caution. I find it sad that there haven't been any hearings on this bailout or any attempts to talk to the experts. In stead, we have a solution from the same people that played a roll in getting us into this mess. John Lott also argues caution.
Here we have a conflict of interest.
Washington Post columnist Sebastian Mallaby says blaming Bush/McCain deregulation is nonsense.
“Both parties have been blaming it on deregulation.”
Kinda. They were blaming it on deregulation, but now it seems the tide is shifting, with the intent to blame the whole mess on the poor.
Were Democrats responsible in this thing? Yep, but probably not in how you think. It wasn’t in giving poor people loans, or in prohibiting redlining or in encouraging banks to loan to those who couldn’t afford it. The Democrats are to blame when they caved into the Republican’s deregulation scheme. The Democrats who voted for the Gramm-Leach-Bliley Act (which repealed part of the Glass-Steagall Act) and Bill Clinton, who signed it into law are to blame. Fortunately a majority of those types of Democrats are retired, or were thrown out of office because they were spineless, Republican-lite, Wall Street Democrats.
Politics IS tied up in economics, which is why the Wall Street Journal is NOT credible in any way shape or form. There are as many economic theories as there are politicians to run for office on them. Most are far from science. This entire problem was based on economics driven by political theory in an effort to end the New Deal Era and get Republican’s elected.
This wasn’t about giving loans to people who were otherwise poor and couldn’t afford a house, it was giving loans to people like me, who have good credit and can afford a house, but they approve me for twice the house I can afford or talk me into some BS type of loan.
Last year my wife and I were living on a legislative aide salary and the wages from a part-time social worker. We were approved for, and encouraged to buy a $350,000 home. Fortunately, we have the sense to realize that was a bad, bad idea, but the banks sure can talk a good game. If I had ran with a $350,000 house, I would have been sending 75% of our paychecks to our house payment. We bought a house that cost less than half that. I would have been to blame for taking on this debt, but how stupid can these banks be to offer them up?
We were also encouraged to look at adjustable rate mortgages and interest only loans. We shot those down too.
Sorry, but the entire Republican platform for the last 30 years has been based on the concept that less government, less taxes and less regulation is always good. Clearly it is complete bullshit.
To hell with the Republicans who pushed it, and the Democrats who caved to it.
Politics IS tied up in economics, which is why the Wall Street Journal is NOT credible in any way shape or form.
But Slate or Newsweek is? I suppose we could sit here for weeks and cherry pick our own economists, but where would that get us.
Sorry, but the entire Republican platform for the last 30 years has been based on the concept that less government, less taxes and less regulation is always good. Clearly it is complete bullshit.
I would say partial bullshit. It is equal bullshit that more government and more regulations will get us out of this mess. I could find a single main stream economist that thought Congress was doing the right thing with the bailout. Most urged caution and said that rushing into a solution may just make things worse. There is also substantial evidence that many New Deal policies just prolonged the Depression and weren't the boon they were supposed to be.
I certainly think there is room for reasonable regulation, but I would say too much is just as bad as not enough.
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