Poutrage, The GOP and Fannie & Freddie, Redux

“Poutrage”

The New York Times on Sunday produced a list of new words and phrases coined intentionally or unintentionally by Americans in 2010.

One was “poutrage,” which the paper defined phony outrage usually offered up for personal, political, or financial, gain.

I was taught “use a new word three times and it’s yours.”

Did you see all of the GOP “poutrage” when the Senate voted to extend the Bush tax cuts to all tax payers, including the nation’s wealthiest, which was a non-negotiable demand by Republicans.

The “poutrage” was accompanied by more spinning than a top about why it was a bad bill for budget and other reasons (never mind the GOP leadership fashioned it), and you wondered why—if it was so-bad—the R’s would put it over the top with their votes? (Hint, hint, because it, unlike earlier bills, included tax cuts for the rich guys, their core constituency.)

Ludicrous “poutrage” seems to find a ready home in conservative circles.
It’s mine!!

Yay President Obama

And while I am at it, kudos to President Obama for winning this vote and a second one with the Senate repeal of “Don’t Ask Don’t Tell.”
Will Obama enter 2011 poised to discover his “inner lion” and lead the nation and the next Congress onto serious bipartisan policy successes which the American people seek?

Not bad for a kid born in Peru! Opps, I mean……

And So It Begins…Again.

The GOP dials Fannie and Freddie into its crosshairs, and then…”fire, ready, aim!”

This time the four Republican members of the President’s Financial Crisis Inquiry Commission (FIRC) seeking answers to the 2008 financial collapse, decide to front run the group’s planned report, issue their own and—surprise, surprise—blame Fannie and Freddie--and, naturally, the government's support of low income housing—for all of our financial woes and the 2008 meltdown.

This behavior, reflective of previous Republican rushes to judgment, is easy for folks who don’t bother with facts, but crave the sound bite. “Fannie and Freddie” sounds so “inside the Beltway” kinky and nobody knows what they do or did—other than something “bad”—so the Grand Old Party can beat the hell out of them and expect to get away with it.

Why not, the conservative Right has been doing it for years?

Us,Lie?

The party of phony “death squads,” weapons of mass destruction” in Iraq, the imperative to give “tax relief to the rich,” which labels healthcare for those who can't afford it "socialism and un-American," and the believes that bank regulators should be industry cheerleaders not scrutinous, now hopes the public will buy the fantasy that federal affordable housing programs (with the implicit racist suggestion that poor black people should not have help to finance mortgages) caused all of the financial failures and losses of the past three years.

The R’s report’s own words takes a great flight of fancy and fantasy because it nowhere mentions “Wall Street,” “derivative securities,” or financial executive compensation.

These truth-slayers expect the American people to believe that government’s affordable mortgage efforts --and especially low income families securing homeownership needs--was what caused Wall Street to go medieval-crazy and rape and pillage not only the American financial system but those of every other major country in the world.

Puh-leze, Speaker Boehner, Chairman Bachus, and Senator Shelby keep hewing to that hoary line.

I can’t do much but point out your village skewed financial perspective, but maybe some of those Democrats in DC and elsewhere will see the calumny of your position and make you pay politically for this kind of narrow minded scapegoating and whoring

How can anyone seeking to explain what happened to the American people, look at the past several years and refuse to mention Wall Street or derivatives? Did the millions in Street political contributions flowing into Republican coffers last month purchase your honestly and blind the GOP to objectivity and reality? If so, how cheaply you sell out, although I assume that last election’s spending just was a political down payment on 2012.

I’ll repeat it, how can anyone seeking to explain what happened in this nation, not even mention Wall Street and derivatives.

Who is behind this bit of chicanery?

The FIRC Four

Lets see, the four R’s on the Angelides commission include two long time GSE haters, Peter Wallison and Keith Hennessey, two GOP operatives who have spent years inside and outside of Republican administrations trying to “get” Fannie and Freddie. The other two are former GOP congressman Bill Thomas and Doug Holtz-Eakin, former head of the Congressional Budget Office (CBO), when the R’s were in power and who presided over several anti-GSE CBO reports.

Why did they release now their observations, report, views or whatever they call them?

Simple, the FIRC’s final report wasn’t going to pin all of the blame on the former GSEs and the Republican members figured they better get out with their same old story and try to prep the terrain. The dozens of stories that will put F&F in a bad light will dig the whole deeper regarding the truth and might cause the other Commission members to fight other issues rather than the GOP distortions of the Fannie/Freddie history.

Having been abused by their former colleagues, the Commission’s majority just might try and set the record straight regarding how F&F fit into the picture in the years leading up to 2008 and afterwards.

The seeds of the 2008 debacle were sown starting about 6 or seven years ago and reached a crescendo in 2007 when Wall Street firms led by large banks, investment banks, and rating agencies---whose unparalleled greed, in creating, packaging and selling high risk and poorly underwritten subprime mortgage loans”---was the single greatest source of blame in the downward financial spiral which attacked financial institutions all over the world.

Psst. PLS Came From New York!

Fannie and Freddie neither created, guaranteed, distributed nor sold “Private Label Subprime” mortgage securities, but did buy them for their portfolios, succumbing to the same damning fate as dozens of other financial institutions in the United States and other countries.

Let me leave right there, except to say that Democrats are going to have their hands full, unless they do a Pontius Pilot, and ignore the GOP perfidy when it comes time to legislate a new national mortgage finance system,

They may not want to say nice things about Fannie and Freddie, but they can and should rebut—with the ton of available facts—how wrong the GOP view, as reflected in this FIRC “minority” report. (See the debate over just what the sponsors call this document.)

If people want to get an objective and less politically biased view of what started the market’s 2008 disassembly, I recommend the following articles, documents, and one book, which should help those seeking to understand what truly caused the downfall, contrary to what the FIRC Republicans (who deserve to be called the “FIRC Four”) wrote.

Some FIRC FOUR Rebuttals

Let’s start with the book, “All the Devils Are Here,” by Bethany McLean and Joe Nocera. The pair follows their “Enron” book with a solidly researched explanation of what caused the 2008 breakdown and the history leading to it.

Fannie and Freddie hardly escape responsibility in the McLean-Nocera tome, but the authors make crystal clear—in the current best seller and independent article each wrote this week (see list)-- that neither Fannie nor Freddie created subprime financing, was in that segment of the mortgage business when it got started, nor sold the poisonous and failed securities throughout the world.

Shhhhh! All of that belongs to the Street, “which shall go unnamed.”

The next item is the wonderful Harvard student paper written Anna Katherine Barnett-Hart more than a year ago, a young women who later went onto to work on Wall Street, but objectively penned a stunningly accurate paper—as time has shown--for her Harvard honors Economics course.

In sharing her opinion of what happened, the reader won’t find one single reference to Fannie Mae or Freddie Mac.


www.hks.harvard.edu/m-rcbg/students/dunlop/2009-CDOmeltdown.pdf


http://www.ritholtz.com/blog/2010/09/fannie-freddie-acquitted/



mortgage-meltdown.html?s_cid=rss:scott-galupo:government-not-solely-to-blame-for-subprime-mortgage mortgage-meltdown

http://www.slate.com/id/2278243/

http://www.calculatedriskblog.com/2010/12/tanta-on-fannie-freddie-and-bubble.html


http://www.sltrib.com/sltrib/opinion/50896538-82/government-bubble-street-wall.html.csp


http://www.nytimes.com/2010/12/18/business/18nocera.html


These won’t shut down the GOP’s anti-GSE distortion machine, but should give people looking for fair analysis an option to the the Republican bull pucky.

Wishes


Happy holidays and Merry Christmas to all of my friends, family, and readers. Here’s wishing you a healthy and happy New Year. Yes, even some of you GOP rascals!


Maloni, 12-20-10