This weekend, the Washington Post published the follow up piece to the Nov 5th Big Lie column. I supplemented that with a run of charts to illustrate the facts I cited.

The pushback continues from the usual sources. We can group folks repeating the faux arguments into 3 distinct categories. Some of these reveal disturbing trends:

1) The Cognitive Dissidents (my term for a those politically dissenting from reality); their brains simply will not allow them to see what disagrees with their ideology. This is a very real and unfortunate part of human nature;

2) The Political Manipulators, who cynically know what they peddle is nonsense, but nonetheless push the stuff because it is effective. These folks are more committed to their ideology than the good of the nation, and as such earn my disdain.

3) The Innumerates, the people who truly disrespect a legitimate process of looking at the data and making intelligent assessments. These innumerates — mathematical illiterates — seem to revel in their own ignorance; it si embarrassing.

The denying of reality has been an issue, from Galileo to Columbus to modern times. Reality always triumphs eventually, but there are very real costs to it occurring later versus sooner . . .


Still popular in WaPo Business Section!

Category: Markets, Politics, Psychology, UnScience

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

31 Responses to “Dissecting the Big Lie (Update)”

  1. Moss says:

    Call them out where possible.. name names. Better yet challenge them to provide the facts that would refute your conclusions.

  2. ilsm says:

    The “Big Lie” is only a part of the 1% agitprop.

    The 99% buys it or the police state comes forward.

  3. Arequipa01 says:

    Re Innumerates:


    2) (for a little context):

    “Jerry O’Donnell, our colleague at the Census Bureau who I mentioned earlier, tells of a workshop for Congressional staff where they examined the Consolidated Federal Funds Report. Their response was something on the order of “You’re kidding! We had no idea this was available.” Consistent and reliable data serve as part of the infrastructure of 21st Century government, and I fear that this component of infrastructure may suffer a spiral into the dilapidation which afflicts highways, bridges, and airports across the country.”

    The Boomer generation has run the bus into a ditch.

  4. DrungoHazewood says:

    I used to be on the other side, but had to concede that I was being a bonehead. I’m still a bonehead, but you gotta start somewhere.

  5. flocktard says:

    Barry, thank you for doing 1000% more in three weeks than what I tried to accomplish in three years.

    The theory of the “Big Lie” – invented by none other than Hitler and propounded in his book Mein Kampf- is to tell a story so fantastic, and repeat it so often, people will simply come to accept it. Cynically, Hitler blamed the Jews for this technique, while deploying it himself to portray them as the cause of Germany’s defeat.

    Today, similarly minded people are doing the same thing Hitler did- they use Fannie and Freddie as scapegoats to deflect from the genuine causes of the crisis. Who are these people? And what shall we call this pathology? Anti-GSEism? Fannie hatred?

    What should be done next is call out the liars- find out who is paying stooges like Ed Pinto to disseminate these stories.

    Ask Mort Zuckerman, who should at least be expected to know SOMETHING about real estate, why he lambastes the GSEs while his own properties went through the same boom and bust cycle as residential did. (I find it amazing how a man like Zuckerman can just buy his way into the national conversation- no better versed in public affairs than many a barstool drunk, he seems to be of the opinion that his views carry weight because he owns a lot of office space. Is that a prerequisite to better insight?)

    We have to counterpoint the brownshirts at Investors Business Daily when they think the entire US economy can be sundered on the basis of a memo written in 1994.

    In other words, folks, the one who controls the narrative of the past, will control the policies of the future. We owe no less to our fellow citizens to tell them the real truth.

  6. InterestedObserver says:

    In part, I tend to think a lot of the issue, on all fronts, is due to a complete lack of critical thinking.

    I agree with all the data and analysis that’s appeared on this site. To me, it’s persuasive. However, let’s keep in mind that it’s an uncontrolled challenge-response scenario that we’re looking at. Challenge issued (be it the repeal of Glass-Steagall, issues related to CRA, you name it). We then have the response generated in society as a whole. The problem is that there are a whole lot of other contemporaneous challenges and responses occurring at the same time. Implicitly, the gives anyone the opportunity to pick and choose what they focus on for both the challenge and the response and suggest causality based on factors that could be completely disconnected with one another. Sure, that’s intellectually dishonest, but there are times when that dishonesty is either not apparent or not apparent enough to be clear.

    That’s why some of the details raised prominently here are so critical: For example

    a. The global nature of the housing bubble (by the same token, can we learn from countries that avoided the blight – what worked there? I assume it’s probably what worked here in the past)
    b. The default rate for CRA/subprime loans. It’s hard to make the case that something like CRA was the primary cause when the subprime loans seem to have a higher default rate.
    c. Physical locale of the boom/bust

    and so on. These details chip away at the plausibility of the lie as an isolated assertion by placing it in a framework through which a more global consistency check is possible. Of course, who wants to do consistency checks, they’re nuance.

    In politics that’s not terribly surprising since changing your mind based on new data or a more comprehensive read of the data seems to get you a toxic label of flip-flopper from the get go.

  7. jmay says:

    Thank you for fighting the good fight, Barry. It is important, and truly appreciated.

  8. jaymaster says:

    This series will make a fine outline for “Dissecting the Big Lie Take Two: The Myth of Anthropogenic Global Warming”. The parallels are striking.

    But both stories require a 4th group. I would call them “The Profiteers”. Basically, folks who make money and/or avoid prosecution for past questionable profits by propagating the myths.

    In your story, that group would include the sleazy mortgage originators, and the big banks that set up MERS and the various bundling/securitization schemes. It’s very convenient for them to point their fingers at any potential cause other than themselves. In other words,“The government made me do it!”

    For the Global Warming crowd, it would be the researchers and bureaucrats who make their living (and then some, as in the recent case of NASA’s James Hanson and his $1.6 million “tax oopsy”).

  9. paulie46 says:

    “I used to be on the other side, but had to concede that I was being a bonehead.”

    You give me hope. I was a bonehead for 62 years. Now I try not to be.

  10. sakhalinsk says:

    Barry – I find myself, after reading this blog for many years, moved to post a comment.

    THANK YOU. I mean it. We all do.

    Finally, someone is elegantly taking the herditariate (I’m not sure that works, but…) to task for their fact-free, agenda-distorting commentary. It’s a great piece, and adds to a continually great, fact-filled, blog.

    For those of us across the other side of the pond in the UK though, you’ll know that many of the memes still need fighting. Check out some of the commentary regarding today’s highly dubious “copying of the Fannie and Freddie idea”, if that’s what it is, just to keep the housing ball rolling you understand….

    From the Telegraph
    “Cameron must have a skeleton in his closet… surely? It’s the only explanation for the extraordinary grip exerted on him by the house building industry, which has just persuaded him to embark on the most harebrained scheme of his political career: the recreation, in Britain, of President Clinton’s Community Reinvestment Act and of Freddie Mac and Fannie Mae.”

    From City AM (?!)
    “Have we all forgotten the sub-prime crisis in the US? Over there, politicians concerned that many poor people couldn’t afford homes forced and bribed lenders to lower credit standards and extend mortgages to those who couldn’t afford them. In the short-term, this boosted home-ownership; but it all ended in tears.”

    I don’t like the schemes, but it’s not for those reasons…

  11. DrungoHazewood says:

    It is really hard to change people’s minds when they don’t want to change. I want to understand what’s going on because that’s to only chance I have to survive this shitstorm. I have so far to go I’d better get to gettin’.

  12. paulie46 says:

    I don’t care what the truth is, I just want to know what is the truth.

  13. DrungoHazewood says:


  14. riverrat says:

    jaymaster, you have it exactly backwards.

    Those who deny that the true causes of the housing/financial crisis are analogous to those who deny the reality of human-caused climate change. Both groups either can’t seem to grasp the evidence and facts, or choose to ignore them.

    Might be time for you to go look up the word “evidence” in the dictionary, and review how the scientific method works, then take an objective look at what the evidence regarding climate change says.

  15. stewa43210 says:

    BARRY RITHOLTZ FOR PRESIDENT!!!! (not joking!)

  16. ToNYC says:

    “It is difficult to get a man to understand something when his job depends on not understanding it.”
    - Upton Sinclair

    “It is very difficult to awaken someone who is only pretending to be asleep.”
    Bishop Desmond Tutu

  17. mrlbroker says:

    It is always difficult to deal with people who say “I believe therefore it is true.” Regardless of the facts. the math, the science and the history, what they believe is unshakeable.

  18. MorticiaA says:

    Run-of-the-mill media long ago ditched real journalism in favor of being a mouthpiece for the corporations who own them (own in every sense of the word). MSM belongs in Category #2 above.

    It is because of this that I frequent TBP and other online sources who participate in critical thinking and then discuss facts rather than dogma. I have no time or patience for the rest of them.

    Thanks, Barry. Keep up the good work.

  19. Raleighwood says:

    Cynically worrying about the effectiveness of their ideology


    Deceitfully working towards the obfuscation of their illegal activities

  20. plantseeds says:

    If the 64% in the US that voted in the last presidential election (assuming they actually care) took the time to read through your bullet points within, “What caused the financial crisis? The Big Lie goes viral.”
    How many would actually understand derivatives, yield, high-yield mortgage-backed securities, AAA ratings on junk securities, unlimited leverage ??!?!?! What in gods name is he talking about!
    It’s a lot easier just to have someone tell “me”who to blame, and “we’re” good!
    Pass the remote, give me my angry bird, check me in on Facebook, and follow me on Twitter.

  21. alnval says:

    Good for you. Things are coming to a head. The theme that it is OK to tolerate unfairness in our social system occurs and is being observed in more and more publicly accessible venues. And fairness as the connecting link among the seemingly disparate examples of public unrest and distress is becoming too clear, obvious and widespread for the issue of fairness to continue to be successfully denied.

    The denial of this reality on broad macro issues like climate change that affect 7 billion people is one thing. How do you wrap your mind around that idea anyway? The denial, however, of the patently unfair lawlessness that has been plaguing the domestic mortgage market and that has put your neighbor’s house under water is quite another. For too many of us the law is no longer about ensuring equity for all but about who can best manipulate the system to defeat impartial justice.

    Fortunately, when they’re aroused the electorate appears to still have enough political clout to impact these kinds of problems. Witness the recent electoral events in Ohio, Arizona and Mississippi where the majority pushed back against the unfair autocratic decisions of a political minority.

    Witness also the You Tube images of police unfairly pepper spraying students or the beating by police of OWS protestors. These images are too powerful emotionally to be dismissed as irrelevant. Unfortunately we don’t have a Walter Cronkite who can make the case to the nation. As a result, we’ll see more of these images before the issue finally gets resolved.

    Joseph Stieglitz summarizes the problem and the challenges we face in addressing it as he reflects on its global implications:

    “On one level, today’s protesters are asking for little: a chance to use their skills, the right to decent work at decent pay, a fairer economy and society. Their hope is evolutionary, not revolutionary. But, on another level, they are asking for a great deal: a democracy where people, not dollars, matter, and a market economy that delivers on what it is supposed to do.”

  22. JimRino says:

    I agree with flocktard.
    There’s many in Philadelphia Irish bars that are far more eloquent and have such a high intelligence quotient, that I wonder how Limbaugh keeps his job!

    I can only assume, after a while, that he paid to be misinformed.

  23. JimRino says:

    alnval makes a good point.
    Brian Williams of NBC has been especially disappointed in his cowardliness to avoid these issues, but especially Global Warming.

    Leadership, this time, won’t come from the Main Stream Media.

    It’s almost as if the news were the product,
    and the Koch Brothers have paid for it’s content.

  24. EMichael says:

    Sadly, journalism today basically consists of “he said, she said”.

    BR has plainly stated what happened in this crisis. Strangely enough, he used the 5 W’s of journalism. If you read it and cannot find any factual errors, you need an IQ in double digits to be confused about what happened.

    Meanwhile, I can point you to several articles in the WP in the last day or two that consist solely of “HSSS” journalism.

    And lord knows if I find myself in a stituation where Fox News is on; or read the WSJ; or talk with one of those who thinks global warming is a hoax; or those who think tax cuts increase revenue ;and a rising tide raises all boats(but I repeat myself), I know I am talking with someone who only reads, listens or watches HSSS journalism.

  25. philipat says:

    Why not get Dylan to set up a debate? That would help get the Big Lie further exposed?

  26. dsawy says:

    Want to find out how innumerate the US electorate is?

    Go stand on a street corner and ask people “How many millions in a trillion?” and note the answers.

  27. victor says:

    BR: are the hired guns a subgroup of #2? I think they deserve to be highlighted.

    BR, for the second time, I’ll ask you this hypothetical question but the way you’ll answer it (if at all) will be interesting I think to all of us. Here we go: if the US were to follow the practice of the Roman Republic and appointed via elections a DICTATOR, magistratus extraordinarius for one year to deal with a pressing problem of the Republic such as in our case the Financial Services “Industry” (including WS) would you throw your name in the hat?… fully aware of the risk for a redux of what happened on the Idus Martiae if people get to love you too much?


    BR: LOL Yes, for the good of the republic — I would accept the term of dictator magistratus extraordinarius for 12 months.

    Truth be told, it would take less than 1 month if you could rule by fiat. the remaining 11 months would be to show that it was working and not have the dictates reversed.

  28. [...] his blog, Barry Ritholtz puts the truth-deniers into three [...]

  29. stadtgeist says:

    Mr. Ritholtz,
    I thoroughly enjoyed reading your two WP articles on the subject of the Big Lie and I appreciate all the free research and analysis you and the many other contributors have shared with the readers. When I was in the service, I was fortunate enough to be stationed overseas, which really broadened my horizons. Simply by stepping back and placing current/recent events into an international context discredits many elements of the Big Lie. After I read Mayor Bloomberg’s comments, I decided to do a little digging and found the “Clicks and mortar” interactive tool on the Economist’s website which measures housing prices & rents across twenty different countries. It supplements the data in the McKinsey study graphic you presented and does a great job of showing that Congressman Frank is much more powerful than I could have possibly imagined.

  30. EMichael says:

    “does a great job of showing that Congressman Frank is much more powerful than I could have possibly imagined”

    In what way?

    And when?

  31. flocktard says:

    @ EMichael:

    It was a joke. Check out BR’s graph on the housing asset bubble for color on this:

    Obviously, Barney Frank could not have inspired a housing bubble in Holland, nor could CRA.