Posts filed under “Bailout Nation”
I was disappointed to read your comments about my “Big Lie” column. You seem to have completely misread who I was blaming and what the Big Lie actually is.
Only one of two explanations suffice: Either I did a poor job communicating what the issue was, or you purposefully mischaracterized what I wrote.
On the possibility it’s the former and not the latter, allow me this further explanation.
The quote that I critiqued was Mayor Bloomberg’s whopper that the crisis was caused by Congress forcing banks to make ill advised loans to unqualified people. That statement is demonstrably false, and it is what I wrote in the WP. Not, as you described, that government was blameless.
Indeed, beyond the Post column, I have pointed a finger at Washington DC repeatedly. From the very early stages of the collapse, I have stated DC was a significant contributor. Indeed, early in the crisis, I described the government as “Uncle Sam the enabler.” (A Memo Found in the Street, Barron’s September 29 2008).
In the Big Picture blog, I made a list of the top blamees (Who is to Blame, 1-25, June 2009) It is dominated by government players, including the Fed, Congress, SEC, various Senators and Presidents, two FOMC chairs, the OCC, OTS, Treasury Secretaries, as well as private bankers and organizations.
And in Bailout Nation, I clearly detail how Congress did the bidding of Wall Street to allow special exemptions, waivers, and new legislation that contributed to the credit crisis, housing boom and bust, and Great Recession.
Your cartoonish argument is reductio ad absurdum – nowhere in the WP article do I remotely suggest the “big lie” was that Washington, DC played no role. But I do call out the nonsense Bloomberg was peddling, and you are pushing, that banks and Wall Street were merely innocent bystanders in all of this, and somehow were forced into these bad loans.
I would love to see any evidence you can muster that government forced banks to stop verifying employment and income, mandated no credit checks, eliminated debt servicing review, forced 120% LTV lending, or somehow pushed 2/28 ARM mortgages.
Less silly, please.
P.S. The print edition of the article, as well as my online edition, has 12 points numbered, not bulleted. That’s either a font or a browser issue on your end.
As William James noted, “a great many people think they are thinking when they are merely rearranging their prejudices.”
UPDATE: November 11, 2011, 11: 45
Tim prints my response, and adds to the discussion here.
The WSJ called out Mitt Romney for repeating the Big Lie in the CNBC Presidential debate: “Markets work. When you have government play its heavy hand, markets blow up and people get hurt,” Mr. Romney said, blaming Democrats for rules that he said force banks to make ill-advised loans. Some conservative academics have said that…Read More
Morgan Stanley in a free fall. Goldman Sachs at multi-year lows. Citigroup looking Ugly. Bank of America off 50% from recent highs. You may be wondering what is going on with the major firms in the financial sector. While each of these firms have different problems — vampire squids to Countrywide acquisitions — they all…Read More
> I continue to be of the mind that the Wall Street Bailouts were misguided, and that a massive Swedish style reorg would have been the best thing for the nation and the economy in the long run. Both Uncle Sam and the Fed would have provided the broad based debtor in possession financing required,…Read More
Yesterday morning’s comments (Random Thoughts: Recent Trading/Market Activity) began with this bullet point: “This entire crisis traces itself back in large part to then FOMC chair Alan Greenspan not allowing markets and the economy to flush themselves clean after the dot com collapse. It seems that nearly every Fed/Government policy action has been a response…Read More
Here is a laugher: Dealbook is reporting that former S.E.C. Chairman Harvey Pitt is now criticizing Dodd-Frank. The giant SEC FAIL of the past decade traces, in no small part, to the great work of Mr. Pitt. As a reminder of Pitt’s sterling ethics and his service to the investing community, I give you this…Read More
I was reading this piece from Michael Hiltzik of the L.A. Times, and I was struck by something intriguing. The debate over the deficit is quite revealing about the speaker: What they choose to omit is every bit as important as what they emphasize. Consider these two short paragraphs: “As Henry Aaron of the Brookings…Read More