A comment worth promotion

In an earlier thread, commenter Doug took issue with the premise of a letter to the editor of my local paper that I’d posted, in which the writer addressed how our economy got into its present condition.  Doug’s comment  then elicited a response from ojmo which I think is worth promotion to the front page so you can read it too. It’s long and full of those fact things and deserves a read.

Doug said:

Can I point out that Medicare and Social Security are payroll taxes, and come out of MY paycheck? I did not see those taxes get cut…And the great recession came as a result of the housing collapse (compounded with high fuel costs). The housing collapse came out of irresponsible lending encouraged by the vaunted government institutions of Fannie Mae and Freddie Mac. The government was encouraging, rewarding, and driving banks to give mortgages to people who couldn’t afford them. These programs were conceived under Carter, pushed under Clinton (I remember the news stories personally), and warned against by Bush and McCain, to name two, but poopooed (I just wanted to get poo into this). Let’s look at the unemployment rate before the housing collapse, shall we? Then let’s look at the job creating juggernaut that is Obama and the rates over his tenure…

And ojmo responded: 

Can  I point out that Medicare and Social Security are payroll taxes, and come out of MY paycheck? I did not see those taxes get cut…

The Republicans are the party that cuts income taxes on the wealthy every chance they get. Payroll taxes are different because they’ve already “baked in” upper limits on those taxes. However, as far as payout on the benefits goes, the Greed Over Principles party has every intention of NOT paying us the money we have already paid in, as Ryan, Cantor, et al have made abundantly clear.

And the great recession came as a result of the housing collapse (compounded with high fuel costs). The housing collapse came out of irresponsible lending encouraged by the vaunted government institutions of Fannie Mae and Freddie Mac. The government was encouraging, rewarding, and driving banks to give mortgages to people who couldn’t afford them. These programs were conceived under Carter, pushed under Clinton (I remember the news stories personally), and warned against by Bush and McCain, to name two, but poopooed (I just wanted to get poo into this).

And so you have, royally. Conservatives have been called out on this lie so many times that most have actually stopped repeating it. In reality:

1) There NEVER was any law that said mortgages were to be given to people who could not afford them. The Community Reinvestment Act (or any other law) NEVER forced Fannie or Freddie to make loans they didn’t want to. If they made any bad loans, it was because they expected a healthy profit. And Fannie Mae was no “vaunted government institution”, it was privatized before the 1970s.

2) The GOP pushed “home ownership for all” as much as Democrats. Remember George Bush’s “Ownership Society”? The notion that Bush “warned” against laws that didn’t exist in the first place is a complete fantasy.

3) The Community Reinvestment Act applied ONLY to banks and thrifts, which wrote no more than 20% of all subprime mortgages issued. The other 80% were written by independent mortgage companies, subject to little or no federal oversight, and driven by nothing other than pure greed. How does this fantasy law of yours explain the demise of Countrywide?

4) Mortgage payment defaults by individual homeowners in 2007 triggered the crisis, but the sheer size of it was caused by the snowball effect of massively leveraged debt held by issuers of (unregulated, thanks again to the GOP) credit default swaps, which at the time had been written in an amount equal to 10 times the size of the entire global economy.

Let’s look at the unemployment rate before the housing collapse, shall we? Then let’s look at the job creating juggernaut that is Obama and the rates over his tenure…

So you’re comparing unemployment rates before the crisis began to unemployment rates while the crisis is ongoing, neatly bypassing the rate during the time the crisis was ongoing and Bush was still in office. A typical piece of incoherent conservative doublethink if there ever was one. If you’re going to cherry-pick unemployment rates, why not use the number of US wars prior to 9-11 to demonstrate Bush “maintained the peace”?

8 responses to “A comment worth promotion

  1. On point number three, you cannot blame Bush for this. Allowing investment banks to get into the loan business was a direct result of the repeal of the Glass Steagall Act in 1999, under…here it comes…President Clinton. Of course Republican majorities voted for it as well, so neither party is blameless.

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  2. Where does point three say anything about Bush? Yes, the repeal of Glass Steagall occurred in 1999 under Clinton’s watch, by the Gramm-Leach-Bliley Act, which was a Republican bill, championed by Republicans (and some Democrats) in general. Thanks for pointing this out, Sean; I had forgotten that part of the standard conservative narrative on the crisis is that “Clinton repealed Glass Steagall” (sometimes stated as “Clinton allowed the repeal of Glass Steagall”), in either case blaming him for allowing the crisis. This point should be added to the list. Otherwise, we’re in agreement: neither party is blameless.

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  3. My darned partisan reflexes again…

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  4. Pingback: What TFC Blog Friends Are Blogging… « The Fifth Column

  5. Well done ojmo. One additional clarification. The GOP may want to lower income taxes RATES, but that does not mean paying less – an important feature that people still don’t realize. Yet, at the upper end, no one should pay a 90% or so rate (which is no more).

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