For some reason, I'm on the email list of someone who writes a blog called 'the Dumb Democrat" - and thus I get his violently anti-Democrat rants every now and then. I usually try to at least scan them to see what kind of arguments are made, but it's usually very predictable and, frankly, boring (when not downright scary).
But the latest opus - about the mortgage crisis - is so hysterically funny in its contorsions that I thought it was worth quoting a few bits here. But it does hold a lesson - there is NOTHING that they will not blame on Democrats.
Ok, here we go: Democrats and the Housing Crisis
The housing crisis that may severely depress the economy is caused by gov't, as have been most of the evils in human history.
Government is evil is a permanent theme of these diatribes, so, nothing very surprising yet. At least we know what to expect right from the start.
The current crisis is caused because the gov't, in effect, printed too much money that was then injected into the housing industry.
Now that actually makes some sense. But, wait for it...
There can be no free lunch cooked up by printing money or shuffling papers in Washington, as much as Democrats would love it to be so.
Government was incompetent. Democrats love government. Thus Democrats are to be blamed for what government does (and, of course, this goes unsaid even when the government, including in that case the Fed, is fully controlled bt Republicans).
In a sense, this is brilliant. Create the association Democrats-government. Denigrate government all the time, it's likely to be detrimental to Democrats. Get Republicans in government. Make government a lot worse. Blame Democrats (the party of "government"). Repeat and rinse. The fact it, it works. The idea that government is evil now seems like a basic axiom of US politics. I know that many of you find my defense of government exaggerated and, well, too French, but it needs to be said again and again to stand a chance against the permanent barrage of the right on that topic.
I'd suggest, like others have done, to improve the rhetorical link "Democrats-government" to "Democrats- good government" - again, by sheer repetition - first by acknowledging on a systematic basic the link between Democrats and goverment, instead as seeing as an embarrassing spot on memo to get around, and secondly by simply adding that qualifier - yes, we support government - competent government.
But back to our friend.
In [a private, free enterprise banking system] there is no banking Czar in Washington DC who makes dictatorial wild guesses about how the economy ought to function or what the money supply should be.
The Federal Reserve's (our central bank) response to the crisis created by printing too much money was to, in effect, print more money - more drugs to ease the pain of withdrawal.
So, the culprit is, explicitly, the Federal Reserve and its chairman. Alan Greenspan until recently (named by Reagan); Ben Bernanke (named by GWBush) for the past year or so. Hey, they are part of government, so they must be evil Democrats, I suppose. No self-respecting Republican would take the job, right?
Hmmm...
After a highly confused description of a "real" banking system (i.e. a gold-backed one) which among other things claims that there are no bank crises in such a system (ignoring a century or more of such massive crises in the 19th century), we move back to blaming the Democrats explicitly:
To make matters worse, once you have accepted the idea that individual bankers and depositors are stupid, and that their affairs must be handled in Washington you open the door to even greater abuses of the free market. The Democrats of course love to substitute their gov't wisdom for that of their stupid constituents. So in this case their primary initiative seems to be to expand the operational scope and Fannie Mae and Ginnie Mae. In the end this means the Democrats want the Federal Reserve to print excess money and the Congress wants taxpayers to bailout those (through Ginny and Freddie) who waste the excess money. All the easy Democratic money circulating around makes the economy soar for the moment but when too many people can't pay the easy money back, the system freezes, and then may collapse.
I'm just numb now: Greenspan's Fed flooding the markets with cheap money at Bush's behest was a plot of the Democrats? The mortgage insustry and Wall Street clamoring for a bailout are the Congress? Like we've said many times: repeat it enough and some of it will stick - and the bigger, the better. We on the other side just shake our heads wearily - and we lose because the only version out there is the batshit insane one...
everyone is mysteriously silent when the gov't, besotted by pure ignorance, takes over every industry by taking over the highly centralized financial industry.
The further irony here is that Wall Street took the mortgage business away from local Savings and Loan banks with Republican approval on the theory that a larger mortgage market would mean lower more competitive rates with less risk for all involved, and that is probably true. But the tremendous consolidation that takes place as everything is sold to Wall Street, divided up, securitized, bundled, and leveraged, and sometimes sold derivatively, in a frenzied attempt by a comparatively few people in a few markets to make instant returns is far different from the real banking system which often featured a local banker driving by each individual house in his portfolio to see that the mortgagor was keeping up his property.
If you want to understand why Moody's and Standard and Poor's didn't rate sub prime collateralized securities poorly to wave off Wall street, you have to consider that it was all happening too fast for them to find the time to really look into the product with 1 /10 the concern of the old fashioned Saving and Loan officer. It's unforgivable yes but it's typical when you have such speed, concentration, billions of dollars, and the blind faith that you too must be part of the eternal Wall Street bull market.
So, if I get this right: Republicans deregulated the industry. This led to a wave of concentration (surprise, surprise...) in the financial sector, and a "frenzy to make instant returns". The rating agencies, which are supposed to self-regulate (hey, their only asset is their reputation - they have to protect it) failed to resist to the greed unleashed. The Greenspan Fed feeds and builds the frenzy with cheap money - and now it suddenly becomes "Democratic" money, and the government's fault? Wall Street is part of the government, maybe? Rating Agencies, too? And Greenspan is a Democrat?
Beyond the fact that Savings & Loans are hardly a word for financial conservatism and safety, given the name of the last big banking crisis in the US (you know, the Savings & Loans crisis), it is quite ironic to see, as part of an anti-government rant, a defense of the small guys against the big boys who are driven by a relentless quest for profit, when the wave of the big boys was made possible precisely by the elimination of the government rules that protected the small guys...
To manage the problems inherent in the system we need, firstly, to pray that a Democrat is never appointed to be Chairman of the Federal Reserve. The system was only figured out in the 1960's by Milton Friedman who was an ardent Libertarian Republican. Chairman since then , both here and abroad, have accepted his theory. Most well known among them was Alan Greenspan who was also a noted Libertarian.
Huh? The banking system has "inherent" problems that need to be solved - by government intervention (the Federal Reserve). So government is good for something then? Some markets are not perfect but need intervention by government or regulators? So what was the whole thing above about government regulation being the cause of problems in the financial sector? That Democrats were doing it?
But no, because we were told that, thankfully, the Federal Reserve, a Democratic government body, has NOT been run by a Democrat in recent years - indeed, we got the best kind of people imaginable, a(n anti-government) Libertarian!
So Greenspan failed? Even Libertarians cannot run government properly?
It is not an overstatement to say that the post WW2 prosperity the world has enjoyed would not have been possible without the Republican genius of Freidman and his followers who finally figured out the effects of central banking on the economy.
No. Democratic Central Banking (run by Republicans) did wonders.
Not surprisingly, they were resisted every step of the way by Democrats, most notably Karl Marx and John Maynard Kaynes.
I kid you not. This is the sentence that followed immediately the previous one. Greenspan the Libertarian successfully fought off the tough resistance offered by Democrats Marx (deceased 1883) and Keynes (1946).
Nevertheless, the battle for freedom from gov't; in particular, its strangle hold on the economy and capital markets, goes on and on.
So. The Fed, the vital Democratic government institution in the fight against government, has been appropriately run by Libertarians against assorted ghosts Democrats. It has given freedom to Wall Street to slice and dice mortgage debt away from friendly local bankers. It has given the markets unprecedented ability to invent new financial products - which have been snapped up with alacrity, creating incredible prosperity - and yet government still has a strangehold over it? Democratic Government (you know, that thing run by Bush and a Republican Congress over the past few years) is incredibly devious, obviously.
But no, it's simple:
As always it's the Republicans who since Jefferson have generally been doing the right thing regarding freedom from gov't, and the Democrats who would subvert the process with gov't printed easy money in an attempt to buy votes or simply because they lack the ability to understand that printing money and shuffling papers in Washington cannot create sustainable economic growth.
All you can say is "wow". And that's how they win.