Ah, the sweet sound of Republican hacks doing the bidding of the people who bought and paid for their campaigns:
The four Republicans appointed to the commission investigating the root causes of the financial crisis plan to bypass the bipartisan panel and release their own report Wednesday, according to people familiar with the commission's work.
The Republicans, led by the commission's vice chairman, former congressman and chair of the House Ways and Means Committee Bill Thomas, will likely focus their report on the explosive growth of subprime mortgages and the heavy role played by the federal government in pushing mortgage giants Fannie Mae and Freddie Mac to purchase and insure them. They'll also likely focus on the Community Reinvestment Act, a 1977 law that encourages banks to lend to underserved communities, these people said.
The Republicans' report is expected to conclude that government policy helped inflate the housing bubble and that prices weren't expected to crash because the government pushed homeownership so aggressively. They say that the report will note that once the bubble burst, a financial panic followed because firms weren't adequately prepared.
This carefully crafted narrative is, of course, a lie. Paul Krugman thoroughly debunked it last June in this relatively short post. Basically: Most lenders weren't subject to the Community Reinvestment Act and by the time the housing bubble peaked, Fannie and Freddie's share of mortgage securitization had plunged while private securitization had soared. Despite these truths, Krugman pointed yet another truth:
Of course, I imagine that this post, like everything else, will fail to penetrate the cone of silence. It’s convenient to believe that somehow, this is all Barney Frank’s fault; and so that belief will continue.
And so it does.