Trying too hard to make a point
The New York Times devoted 5000 words to the piece, White House Philosophy Stoked Mortgage Bonfire. Though it speaks darkly of “dismissed warnings”, signals that were “misdiagnosed,” crises “looming” in 2006, and the like, its final judgment is rather weak: “the story of how we got here is partly one of Mr. Bush’s own making.” Let’s take a look at the context of that last phrase:
There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk. But the story of how we got here is partly one of Mr. Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.
It is surely possible to see the Times “waging politics” against the outgoing administration. The Times dramatically understates the roles of the “plenty of culprits” in its choice to emphasize the actions or inactions of the Bush administration. Without the explosion in securitization, for example, the problem could never have gotten this large and out of control. Watch the video below (especially after 3:00) and behold some of the nonsense that became a commonplace during this decade:
It is certainly true that government bears a significant share of the blame for the current mess. But this was perhaps the greatest financial boondoggle in US history, and so many had reasons to minimize the negatives while raking in the cash. Everyone went for a lovely ride down the river, and everyone was so surprised by the rapids and the waterfall. An honest telling of the story will be a blockbuster.
Final point: the NYT fails to report that the Bush “White House Philosophy” that “Stoked the Mortgage Bonfire” does not appear to be notably different from its Democratic predecessor.
December 25th, 2008 at 11:02 pm
In a very long article discussing NEARLY every aspect of the Mortgage Follies, the NYT never once mentioned that the Democrats in the Clinton Administration passed a law that made it illegal to refuse mortgages to ethnic minorities merely because they could not repay the borrowed money. In the interest of equality, the privelege was subsequently extended to everyone, regardless. So the most important point, from which everything else followed, was not mentioned in the article. Everything that followed (the packaged mortgages as investments [also begun during Clinton's Admin], the investment ratings breakdown, the sale of bad paper worldwide) was the direct result of Democrats defying simple accounting rules and common sense in service to their Marxist agenda.
The NYT certainly did not bother to mention that Obama was a principle activist in Chicago that led to the adoption of the funny mortgage laws that enabled the Mortgage Follies. As a young lawyer, Obama sued to gain ACORN members the rights to mortgages for which they were otherxise unqualified. How do you think Obama got his wonderful community activist reputation, anyway?
Way, way down in the story, the NYT got around to mentioning that, ‘oh, by the way, President Bush and Republicans in Congress tried repeatedly to reform the process, particularly in Fannie Mae and Freddie Mac, but their efforts were blocked by Democrats in the Congress’.
“But this was perhaps the greatest financial boondoggle in US history … ”
Absolutely not, not even close. Social Security is the greatest financial boondoggle in history. Had we maintained Reagan-level growth, we MIGHT have been able to pay off SS obligations. Every single president since Eisenhower has said that Social Security has to be reformed. Democrats in Congress deliberately refused to work with President Bush to deal with Social Security.
The dot.com Bubba Bubble, falsely confused by Democrats with economic growth, was, like any other economic bubble, guaranteed to pop. NASDAQ fell by $2-1/2 trillion DURING CLINTON’S LAST YEAR IN OFFICE, and continued to fall in the first months of the Bush Administration until NASDAQ had lost 80% of its value, for a total loss of $4 trillion in NASDAQ. The DOW and other markets lost even more in the Bubba Recession.
LBJ’s War on Poverty cost $6 trillion over a thirty-year period, and the only effect was the near total destruction of Black family life in the United States.
The Mortgage Follies come in a distant fourth when accounting for Democratic Party mishandling of the economy. The mortgage problem could have been solved for about $1 trillion if the markets had held up. But the prospect of a Marxist president caused investors to panic; no investor was willing to leave his assets exposed to Marxist inefficiency, incompetence, or confiscation. The $1 trillion mortgage problem morphed into a worldwide markets crash, $30 trillion and counting.
Have a Happy Christmas.