Let's pass over quickly the fact that the White House has no philosophy and never has. A hash of tradition, panic, and sporadic grit does not make up a coherent set of beliefs. That aside, to blame the current mortgage-based economic crisis chiefly on Bush and the Administration is to have the point of view of an ant.
In an unusually long article there is no mention whatsoever of ex-President Clinton beefing up the CRA. When Fannie Mae and its crooked-as-a-dog's hind leg ex-CEO Franklin Raines is discussed it's only to say how pleased he was with his meetings with Bush. Nary a word about how Raines has been cozy with Dodd, Frank, and the Democratic Party for decades. Not a line about Greenspan, at the Fed through Republican and Democratic administrations alike, jerking around interest rates and the money supply for years.
Instead, we get the usual transparent bull about "Hands-Off Regulators." That's a joke. A very bad one. Keynesian Ben Bernanke hands off? Fascist Henry Paulson hands off? The thousands of regulations that have been distorting the housing, and every other, market for generations represent laissez-faire? Nonsense. On flea circus stilts.
The only significant regulatory loosening during the past 10 years was a modification of the Depression-Era Glass-Steagall Act in 1999. The major difference before and after was a repeal of the provision forbidding investment banks and commercial banks to play in the same sandbox. Apart from having nothing to do with causing the crisis, it actually helped, making it legal for Bank of America to buy tottering Merrill Lynch and Countrywide.
If we're to lay any blame at Bush's doorstep for this, remembering his (and Greenspan's) dozen attempts to get Congress to act to rein in Fannie and Freddie, it is only justified in that he did so little to actually push for free markets.
Obviously, to this type of mentality, until the U.S. is a virtual copy of the Soviet Union circa 1921, we will still have unregulated markets. Maybe not even then. Lenin had his NEP, after all.
Bad enough to have the memory and research skills of a gnat. But to have the soul of one, too, is beyond the pale, even for reporters at the New York Times.
3 comments:
The libs have adopted the "tell a lie often enough" tactic on this one and for good reason.
If the truth were actually to get out, the American people would come to understand just how corrosive most liberal ideas are as the following liberal ideas led directly to this crisis.
1) Rich people are rich because they have figured out how to keep poor people poor!
2) Rich people will screw poor people every chance they get!
3) Rich people didn't earn what they have so they don't deserve to keep it!
4) The rich don't DESERVE to be rich and the poor aren't poor through any fault of their own!
5) Home ownership is a RIGHT, not a privilege!
These 5 insidious ideas lead to the following,
1) If it weren't for the rich bankers that want to keep the poor down, the poor would own houses. Since the rich bankers will never loan money to the poor on their own, we must make such loans compulsory.
2) We need to set up government guaranteed loaning institutions to govern these loans to insure the rich aren't trying to pull any fast ones.
3) We need to set up our political cronies to head these institutions so we can make them rich and insure a steady stream of campaign contributions to our re-election coffers.
4) If any banks don't want to play along, we will harass, picket and regulate them out of profitability until they agree to play by our terms.
5) We will resist with all force available to us the notion that there is anything wrong with loaning people who can not repay the loans money and we will accuse those who want to reinstitute loan to value, minimum income requirements, credit scores, etc. of racism, hate mongering and of being puppets for the rich who hate all poor people by which we really mean minorities.
6) When this house of cards comes falling down around our ears as we all know it will, we will all blame the rich, the free market and the Bush administration day in and day out in every media appearance, in every congressional appearance, in every news story at an unprecedented level that will make Leni Riefenstahl smile from the grave.
Any questions?
Having worked for Countrywide for four years, I have some experience in the area. I certainly agree with all you write here, but can add this:
Countrywide didn't have to be forced to enter the sub-prime market. They were salivating about the possibility of increased profits and they earned them through hard work.
Yes, the banks and other lending institutions did line up to make these stupendously stupid loans under the imprimatur of a Federal Program.
Other banks decided that making dumb loans to poor credit risks was a bad idea and resisted the temptation.
Sad that they, along with the rest of us, are left holding the bag for the idiotic government policies, greedy bankers and fellow citizens who feel so DESERVING of homes they can not afford.
Free markets, true free markets, would punish stupid behavior like this and would reward those who make intelligent loans to good credit risks.
The libs feel that such free markets are cruel as they deprive hard working people of the opportunity to own a home. (Which is crap, anyone who works hard, understands and more importantly puts in to practice the lost art of delayed gratification, and saves their money will eventually find themselves in a position where the banks will loan them the money the need to buy a house.)
And therein lays the problem. The government could have continued to require loan to values of 80% or better. They could have continued to require the banks not loan to bad credit risks. In short, they could have stepped in and applied common sense regulations. Their failure to do so and in fact their demand that banks do anything but allowed the greed to take root and flourish.
The only thing worse than the government staying out of the free market all together so that markets punish bad behavior and reward good behavior is a government who thinks it can manipulate the rules to achieve their socialist agendas without there being a negative downside.
This episode is sadly being successfully sold to the American people as a total failure of the free market and not as a failure of liberal politicians. These bail outs only mask the real problem and will ultimately result in a much worse problem than the one we have now.
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