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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Sunday, September 28, 2008

Frankly Jeff, you just don't get it

As a rule, I don't read the Globe's Jeff Jacoby. Too predictable. But there was something about today's headline that made me stop and take notice.

To summarize: this whole financial mess is the fault of Barney Frank and his liberal fellow travelers.

I know knee jerk. Heck, I've been accused of being a knee-jerk liberal although I do stray off the reservation a bit. And like any good opinion monger, I use the facts that bolster my argument while short-shrifting the ones that don't look good.

But Jacoby's total rewrite of history -- going back 30 years while ignoring the last eight -- is just too much to take.

Dear Jeff. Have you ever heard of the "Ownership Society?"

This was George Bush's idea to privatize everything -- from health insurance and Social Security (aren't you glad that turkey didn't fly?) -- with home ownership a linchpin of that effort. Bush's own PR machine trumpeted the fact that home ownership was approaching 70 percent in 2006.

And how did that come about? Not through the Community Reinvestment Act and other dastardly liberal plots to bring socialism to America.

No, it came about through unregulated commerce -- banks floating mortgages to people who had zero resources, packaging those fancy loans into incomprehensible vehicles insured by unfathomable policies.

That recklessness was aided and abetted by a Bush administration that abdicated even minimal regulatory oversight.

Jacoby now tries to paint himself as a lonely voice in the wilderness in 1995 who also railed against Fannie Mae and Freddie Mac while Frank blithely ignored the warning signs. Maybe that's because everyone was too busy listening to Johnnie Mac's lobbyist/campaign manager Rick Davis.

The intellectual dishonesty in this Jacoby column rises far above his usual screeds. But then again, maybe I should cut him some slack. He is after all an affirmative action hire -- the Globe's token conservative. And we know what Jacoby thinks about affirmative action hires.

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Anonymous abi said...

I can always count on Jacoby for a good Sunday laugh, and today he didn't disappoint.

Is he actually trying to peddle the nonsense that the economic mess is not the fault of right-wing ideologues infatuated with the fantasy of deregulation, but of those goddamn deadbeat minorities, who were forced on the poor mortgage industry by the Carter administration?

The pressure to make more loans to minorities (read: to borrowers with weak credit histories) became relentless.

Poor Jeff. He tries so hard to be Limbaugh, but he comes of as just another dittohead.

September 28, 2008 11:02 AM  
Anonymous Anonymous said...

Jeff overstates his case for sure. But he is right about one thing. Barney and his colleagues did indeed push for more and more lending in areas that could not support it. Also, there was a very cozy relationship between FreddieMac and FannyMae and their Congressional oversight committees. Lots of fund-raising and wining and dining of both Republicans and Democrats. Why doesn't some reporter look into that?

September 28, 2008 12:40 PM  
Anonymous Anonymous said...

I'm no fan of Jacoby, or the GOP philosophy in general. But it's just not correct to say that the culture of deregulation had much to do with the underlying causes of our current crisis (ie., the housing slump). Poor regulation -- mostly in the form of loose/non-existent rules governing financial institution leveraging -- did, of course, take a burst real estate bubble and turn it into a global cataclysm. But the whole thing wouldn't have gotten started without the property bubble. And that, in turn, was very much a government creation. I'm referring, of course, to Fannie/Freddie.

The implied taxpayer protection for F&F meant that mortgages the private sector wouldn't write got written. In plain English, it wasn't very necessary to do risk analysis, because government took risk out of the equation. I mean, if the government decided tomorrow morning to insure the losses of stock market investors, you can be sure the stock market would soar. Same thing happened with houses.

We're going to have to think carefully about what kind of regulations we need, and a lot of things are going to come to pass that Republicans aren't going to like. But a few things need to come to pass that Democrats, too, aren't going to like. And one of them is the eventual radical restructuring or reform -- or indeed break up and sale -- of Fannie and Freddie.

September 30, 2008 1:57 AM  
Blogger Outraged Liberal said...

Fair point anon 1:57, but the real estate bubble was fostered by the Bush Ownership Society and the mentality that went with it. As I said, plenty of blame to go around in the face of "irrational exuberance" and the feeling that no one or nothing could stop it.

September 30, 2008 5:12 AM  

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