Posted on | December 25, 2011 | 12 Comments
Joe Nocera in the Grey, Undead Lady:
So this is how the Big Lie works.
You begin with a hypothesis that has a certain surface plausibility.
Postmodernism is the ultimate lie, beginning with the notion that there is no Truth. In responding to any modern accusation of deploying a ‘Big Lie’, one should first make the accuser stand and deliver on the question of what they hold to be absolutely True.
You find an ally whose background suggests that he’s an “expert”; out of thin air, he devises “data.” You write articles in sympathetic publications, repeating the data endlessly; in time, some of these publications make your cause their own. Like-minded congressmen pick up your mantra and invite you to testify at hearings.
You’re chosen for an investigative panel related to your topic. When other panel members, after inspecting your evidence, reject your thesis, you claim that they did so for ideological reasons. This, too, is repeated by your allies. Soon, the echo chamber you created drowns out dissenting views; even presidential candidates begin repeating the Big Lie.
Thus far, we could be referring to the Big Lie that is Anthropogenic Global Warming, or whatever they are calling AGW at the moment–I guess it is ‘climate change’–a really Big Lie, like the flu, begets variations in its assault on Truth.
But Nocera’s task is to ignore the 10th Amendment, and try to con you into believing that the Community Reinvestment Act of 1977 wasn’t Yet Another Progressive Puddle of Puke (YA3P). The U.S. has permitted, for almost 40 years, a short-circuit in the chain of command. We have allowed the Federal government to bypass the state capitals and deal directly with citizens for housing.
Thus has Peter Wallison, a resident scholar at the American Enterprise Institute, and a former member of the Financial Crisis Inquiry Commission, almost single-handedly created the myth that Fannie Mae and Freddie Mac caused the financial crisis. His partner in crime is another A.E.I. scholar, Edward Pinto, who a very long time ago was Fannie’s chief credit officer. Pinto claims that as of June 2008, 27 million “risky” mortgages had been issued — “and a lion’s share was on Fannie and Freddie’s books,” as Wallison wrote recently. Never mind that his definition of “risky” is so all-encompassing that it includes mortgages with extremely low default rates as well as those with default rates nearing 30 percent. These latter mortgages were the ones created by the unholy alliance between subprime lenders and Wall Street. Pinto’s numbers are the Big Lie’s primary data point.
Nocera gets down to naming names here, giving two people who have ‘almost single-handedly created the myth that Fannie Mae and Freddie Mac caused the financial crisis’. It would seem that if one is going to wield the Big Lie stick, one would want more certainty than ‘almost’. Are we to believe that these two blokes just randomly decided to connect the Fannie/Freddie dots in a certain way? Powerful dudes, if they are responsible. Maybe they informed Jonah Golderg, whose book Liberal Fascism was my personal entre into the rottenness of Progressivism.
Or is the quibble the notion that the financial crisis had a single cause? I have neither heard of, nor read yet, Wallison or Pinto. Did they really say it was all Fannie/Freddie, or just that these GSEs had contributed significantly?
To have that debate, though, we need a clear understanding of what role the government’s affordable-housing goals did — and did not — play in the crisis. And that is impossible as long as the Big Lie holds sway.
Which, now that I think of it, may be the whole point of the exercise.
I see nowhere in Nocera’s article any acknowledgement that Fannie/Freddie are
- possibly Constitutional dodgy for starters;
- that they engender massive moral hazard (temptation) for mischief (Senator Dodd is gone, Representative Frank does not plan to run for re-election. Could that mean they kinda know they transgressed?);
- that daring to question the validity of the scam triggers such white-hot denunciations for a reason.