Yesterday’s headline for an article on The National Journal website pretty much says it all: Financial Crisis Commission Feuding Over Causes of Crisis Already behind schedule, bipartisan panel split on party lines.
Here’s the essential point of contention: commission member Peter Wallison, a scholar at the wrong-wing American Enterprise Institute,
believes government housing policy was the biggest factor in the crisis ... [and] said the report appears to embrace "a very conventional analysis" of the crisis, laying most of the blame on Wall Street and deregulation.
Soon after the Wall Street collapses of April and September 2008, the conservative think-tanks that feed the wrong-wing noise machine worked overtime to come up with an explanation that steered blame away from their sacred cow of the free market. The line of bull crap they came up with was that the crash of 2008 was caused by the banks being forced by a law, passed thirty years earlier, the Community Reinvestment Act (CRA), to provide loans to low income people who really could not afford the homes they were buying.
Never mind the obvious question of why it took three full decades for the results of this law to finally blow up the world’s financial system. Never mind the obvious role played by financial derivatives, such as mortgage backed securitizations and credit default swaps, in helping Wall Street leverage its bets many time over. Never mind the massive amount of fraud that the banks were committing to create new mortgages to keep their golden goose of derivative securitization going (fraud which the FBI explicitly warned about in 2004, as William Black and others have repeatedly reminded us). Never mind that it was not the thrifts and commercial banks covered by the CRA that were issuing bad mortgages and slicing and dicing them into derivatives, but the investment banks and the independent mortgage banks NOT covered by the CRA. Never mind the most recent example of a massive crisis caused by deregulation, the savings and loan collapse of the 1980s.
The important thing for the wrong-wing hacks and the deluded masses of morons they carefully control and can whip into hate mobs when they want, is that the blame be affixed anywhere but where it really should be: financial markets gone wild after the big binge of banking deregulation under Reagan, Clinton, and Bush.
Why anyone thought it would be a good idea to appoint one of the wrong-wing hacks like Peter Wallison to this Commission is just beyond my understanding. (Except for the naïve and stupid belief that wrong-wing hacks like Peter Wallison might actually be interested in a bi-partisan attempt to fix the country’s financial system and help the economy mend.)
A Democratic member of the commission said the delay was largely caused by a lack of enthusiasm by the GOP members, who sometimes don't show up for meetings. "The Republicans don’t seem interested in participating in the process of preparing the report," said the member, who would discuss the internal deliberations only on condition of anonymity.
So, here’s our special commission for looking into the causes of the BIGGEST financial and economic disaster since the First Great Depression, and the freakin’ "loyal opposition" still refuses to cooperate. President Obama and his defenders continuing to think and insist that they can reach some sort of bi-partisan cooperation with conservatives and Republicans is simply looking ever more stupid.
By the way, a number of people have repeatedly taken the time to dissect and destroy the wrong-wing meme that the financial crash was caused by Wallison’s "government housing policy." One of the best has been Barry Ritholtz, who issued a $100,000 challenge to anyone willing to debate him on the actual causes of the financial crash, and the supposed culpability of the CRA. Here’s one of Ritholtz’s several articles on the subject.
People who still think that the can co-operate with Republicans and wrong-wingers really, really, REALLY, need to read a bit about the break-down of national politics in the 1850s, leading to the Civil War. There simply is NO way to safely compromise with a faction of stubborn nutcases clinging to failed ideologies and beliefs. Pulling the Temple Down: The Fire-Eaters and the Destruction of the Union