Rubio’s other ‘slip’
It wasn’t the water-duck or the mouth-wiping, but what Marco Rubio said, much earlier in his SOTU response (just about two minutes in):
In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies.
You’d think that by 2013 Republicans might have abandoned the long discredited position that Fannie and Freddie or some ill-conceived “big-government solution” was the root cause of the mortgage crisis, or that the party’s anointed savior might more carefully consider the use of such disingenuous rhetoric. Paul Krugman is only among the latest to set things straight:
Look, this is one of the most thoroughly researched topics out there, and every piece of the government-did-it thesis has been refuted. … No, the [Community Reinvestment Act] wasn’t responsible for the epidemic of bad lending; no, Fannie and Freddie didn’t cause the housing bubble; no, the “high-risk” loans of the [government sponsored enterprises] weren’t remotely as risky as subprime.
How long ago was this contention already being shot down? Rubio’s remark had me returning immediately to a faithfully referenced story, bookmarked years ago mainly to prepare for a family gathering at which several excited peddlers of the tale would be in attendance: “Private Sector Loans, Not Fannie or Freddie, Triggered Crisis.” It’s from October 2008, but unlike the myth dutifully propounded by Rubio, it never really gets old, while also having the benefit of being true.
It’s important to keep these facts in evidence, because, as Krugman concludes:
[Rubio] and his party are now committed to the belief that their pre-crisis doctrine was perfect, that there are no lessons from the worst financial crisis in three generations except that we should have even less regulation. And given another shot at power, they’ll test that thesis by giving the bankers a chance to do it all over again.
Tags: housing crisis, Marco Rubio, Obama, state of the union address
Krugman explains why: “The truth is that America’s partisan divide runs much deeper than even pessimists are usually willing to admit; the parties aren’t just divided on values and policy views, they’re divided over epistemology. One side believes, at least in principle, in letting its policy views be shaped by facts; the other believes in suppressing the facts if they contradict its fixed beliefs.”
http://www.nytimes.com/2013/02/11/opinion/krugman-the-ignorance-caucus.html
Gddi product placement for Poland Spring.
Correction:
Good product placement for Poland Spring.
Marco Rubio amounts to old wine in recycled wineskin.
If the GOP wants to compete for the Latino vote, it’s going to have to give up its Tea Party foolishness…or learn the hard way, yet again, and again.
Dominic Preziosi is absolutely correct: Rubio’s response to the SOTU is disturbing on so many levels.
Krugman is so right: This is a dangerous time in our politics now especially since one of the major parties is demonstrably detached from reality. An unintended consequence from this political devolvement could bring down the whole system of government.
The US is in big trouble.
Jim J says “devolvement could bring down the whole system of government’ I disagree..
Bringing down a government takes courage… Jim, where would the GOP find courage? not in their ranks..
What a display of chutzpah for the Cuban Dan Quayle to say that government can’t help you. No, but it can help Rubio (student loans to pay his way through college) and his parents and neighbors (all of whom are on Social Security and/or Medicare.
Typical Tea Party: Now that I’m across the moat, I’m pulling up the drawbridge.
Krugman: “[Rubio] and his party are now committed to the belief that their pre-crisis doctrine was perfect, that there are no lessons from the worst financial crisis in three generations except that we should have even less regulation. And given another shot at power, they’ll test that thesis by giving the bankers a chance to do it all over again.”
I have to say that this Jones-will-come-back rhetoric on Krugman’s part can’t help but call into question the objectivity of his analysis with regard to Fannie and Freddie’s role in the meltdown.
At any rate, the quote produced here doesn’t point specifically to Fannie and Freddie, although that may well be what Rubio had in mind. My own view is that, even apart from Fannie and Freddie, the government bears its fair share of responsibility for the crisis – albeit in ways that aren’t congenial to economic libertarians. The bipartisan repeal of Glass-Steagall surely was one contributing factor. So was the decision to allow Lehman Brothers to melt down, after forcing a rescue of Bear Stearns.
Fannie and Freddie were the largest buyers of sub-prime mortgages mandated by the US Government to purchase far more “affordable” loans made to put more low-income and minority families into their own homes. HUD allowed Freddie Mac and Fannie Mae to count billions of dollars they invested in subprime loans as a public good that would foster affordable housing.
What is generally agreed is that subprime mortgages disproportionately contributed both
to the severity of the crisis and to the size of losses imposed upon the taxpayer. What remains in dispute is the role of government—specifically, that of Fannie Mae and Freddie Mac—in expanding the availability of subprime mortgage credit.
Foremost among the government-sponsored enterprises’ deleterious activities was their vast direct purchases of loans that can only be characterized as subprime. Under reasonable definitions of sub- prime, almost 30 percent of Fannie and Freddie direct purchases could be considered subprime.
The government-sponsored enterprises were also the largest single investor in subprime private-
label mortgage-backed securities. During the height of the housing bubble, almost 40 percent
of newly issued private-label subprime securities were purchased by Fannie Mae and Freddie
Mac.
The vision of Rubio and a slip are not pleasant to the eyes.
s/b is, not are …..