Don't they just make your blood boil? If you saw the rec'd diary about Walsh's tantrum, you know what I mean.
Anyway, come with me over the fold to gather some succinct and to-the-point rebuttals whenever you're hit by a spittle-filled no-nothing like Spittin' Joe.
Walsh's weapon is gross generalization and distortion the very concept with regulation regarding whether or not the government "made the banks" blow up the world.
In another thread, someone pointed me to Barry Ritholtz. I'm glad he did. Perhaps this piece as been highlighted before, but in light of yesterday's elections and Walsh's explosion, it's worth another look.
http://www.ritholtz.com/...
First, Ritholtz doesn't claim to be partisan, nor does his analysis reek of partisan sniping, either way. He's an investor, who claims to follow facts and (gasp) empirical evidence. Regarding the banking explosion (think of Walsh here, even though this was written in the spring of 2010, he's speaking straight at that bonehead), he says, simply:
My approach to everything I have written, studied and analyzed in this space is pretty straight forward: Start with the data and evidence and go forward from there. Figure out what the “Truth” is; try to get as close to the objective reality beneath the noise in order to make intelligent investing decisions for myself and my clients.
There are others who do not share this objective. Their goals are either political (winning the next election) or ideological (having their belief system become dominant). Truth is irrelevant to these people.
Not surprisingly, these folks — many of whom contributed to the crisis in a mighty way — are desperately trying to duck responsibility for what happened. Those who helped cause the crisis are engaged in an ongoing effort to rewrite its history.
Their goal? Exonerate their own bad behavior, throw off any responsibility for the collapse, blame anything but their own ideology and horrific decision making. They want to keep pushing their tired political agendas, despite the damage they may have caused.
Gee, you think?
Okay, so here's Ritholtz's list of why the world blew up:
To be blameworthy, every legislative change, each regulatory failure, any corporate action had to manifest themselves in actual mathematical proof. This led me to ascertain the following 30 year sequence:
-Free market absolutism becomes the dominant intellectual thought.
-Deregulation of markets, investment houses, and banks becomes a broad goal: This led to Glass Steagall repeal, unfettering of Derivatives, Investing house leverage exemptions, and a new breed of unregulated non bank lenders.
-Legislative actions reduce or eliminate much of the regulatory oversight; SEC funding is weakened.
-Rates come down to absurd levels.
-Bond managers madly scramble for yield.
-Derivatives, non-bank lending, leverage, bank size, compensation levels all run away from prior levels.
-Wall Street securitizes whatever it can to satisfy the demand for higher yields.
-”Lend to securitize” nonbank mortgage writers sell enormous amounts of subprime loans to Wall Street for this purpose.
-To meet this huge demand, non bank lenders collapse lending standards (banks eventually follow), leading to a credit bubble.
-The Fed approves of this “innovation,” ignores risks.
-Housing booms . . . then busts
-Credit freezes, the markets collapse, a new recession begins.
You will note that the CRA is not part of this sequence. I could find no evidence that they were a cause or even a minor factor. If they were, the housing bubbles would not have been in California or S. Florida or Las Vegas or Arizona — Harlem and South Philly and parts of Chicago and Washington DC would have been the focus of RE bubbles.
Once again, You will note that the CRA is not part of this sequence.
That lack of evidence, however, doesn’t stop ideologues from trying.
Ritholtz refers to a different guy (but consider Walsh here) and quotes Kevin Hassett:
“The worst financial crisis in generations was set off by a massive government effort, led by the two mortgage giants, to make loans to homebuyers no matter whether they could make the payments."
Sound familiar? I think I just heard Walsh claim exactly that nonsense that in his screed, which is what reminded me of this piece.
Now, this makes for a fascinating narrative that plays into a number of different ideological beliefs. It exonerates the radical free market deregulators, it ignores what the private sector did, and it somehow ignores the fact that Congress was controlled by a very conservative GOP from 1994 to 2006 — the prime period of time covered leading up to and including the beginning of the crisis.
But worse than all of that, the data supporting Hassett’s position simply isn’t there.
I urge anyone who wishes to enter this debate, whether at a townhall (like that cool and incredibly cool-headed woman) or with stubborn relatives, to read the link and study it, and learn it, and study it some more. Get the details right on this - the FACTS are not on the side of Joe Walsh and his creepy ilk.
And you can always tell Joe, "I know a guy who will give you $100,000 if you can prove what you just claimed."
Peace out.
Bob