Sometimes reality takes you back to certain pieces of information and makes you think. I was in my bathroom today, taking a leisurely hot shower, and reading an opinion piece in the Wall Street Journal by staffer Kimberly Strassel. It dated back to Friday March 20th, which is only a sign of the priority I place on the WSJ opinion pages, which to me are rather heavy on flights of inaccurate fancy.
Strassel's piece, labeled "Greed Is Not Good" and featuring a cute little picture of Obama reading Grimm's Needy Bankers (instead of fairy tales) to a bunch of smiling white people while Washington burns in the distance, is the type of writing that only adds to the collective stupidity of those who are inclined to be reflexively disposed to mocking Obama in the first place.
What troubles me is her suggestion that Obama is stoking the populist fires and encouraging the average guy to hate Wall Street and bankers, and at the expense of being able to bail out those industries in a manner that would improve the economic situation for the country as a whole.
Her concerns about rampant populism are well placed, but her attempt at sourcing all of this back to Obama or Democrats is wickedly cynical at best. Since point A in this entire crisis, it has been Republicans who have been railing the loudest about bailing out fat cats, in addition to their general desire to place the entire cause of the situation on lax Freddie and Fannie lending to minorities. We know better than that, but the Republicans and certain libertarians have not exactly hidden their disdain for and mistrust of Treasury, the Federal Reserve, and Obama himself. It's not Democratic governors who are making a mockery of stimulus efforts, or marching lock step in circles of donothingism.
Strassel goes on to say that "Washington does have its grown-ups: Those few Republicans who tried for years to reform Fannie and Freddie, but who also voted for a necessary banking rescue..." She does make a somewhat valid point (about how bailing out bankers IS bailing out America), but the start of the sentence begins with the basic lie that Republicans have taken the lead in reform.
I am reminded again of this piece that ran before the election that points out that private sector loans were the ones in default by a wide margin, and that neither Freddie or Fannie actually wrote loans themselves. This seems to be a hard fact for Republicans to swallow while they ignore their own policies of easy money and lax to nonexistent regulation.
Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.
Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.
Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.
Federal Reserve Board data show that:
- More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
- Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
- Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.
It's all distasteful, and especially from the pen of a writer at the Journal. One would think that the actual facts would be available, or that at least she would attempt to write a different piece that conformed with some set of facts. Instead Kimberley Strassel relies on the high probability that her readers will be to eager to agree, all bliss and ignorance atop the soapbox.
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