Basic Job Qualifications for Politicians: Stupidity and/or Ability to Lie
Posted: November 2, 2011 Filed under: The Bonus Class, Voter Ignorance, We are so F'd | Tags: big fat liars, I see stupid politicians 27 CommentsSomething tells me I need to step away from the political news for awhile. I’m just blown away by all the information out there about today’s crop of political leaders that 
appears to be met with insouciance by many voters. How can you support people that clearly don’t have their facts straight? First, I read that Herman Cain seems to be blissfully unaware that China has had nuclear capabilities for some time. He seems to think they are “trying to develop nuclear capability”. Then, I watched parts of a speech given by Texas Governor Rick Perry Thursday night that was characterized by CBS as “giddy” I can say that “giddy” wasn’t exactly the first word that came to my mind from having spent tons of time in the French Quarter happily surrounded by drunk gay men. Is giddy some new code word that means your gaydar has gone off big time? While Perry was talking about his ‘brother in Christ”, I had a feeling that there was a different sentiment stirring some where beneath his belt. This speech made me believe ” THE rumor”.
Then there was this “awful comment” yesterday by Mayor Bloomberg that I just can’t forget. Bloomberg wants to forget about any role that the commercial and investment banks played in the financial crisis and blame the entire thing on Fannie and Freddie and the 1994 Community Reinvestment Act. Fannie and Freddie exacerbated the entire problem but there is no way that poor people can be blamed for a speculative bubble. Bloomberg simply ignores so many facts and studies that all I can say is that it was shameful to watch some one try to defer blame for incredibly high social costs on their political donor base. He should be embarrassed at being so transparent or ignorant or capable of lying so badly. I still can’t figure out which one is most applicable.
Here’s Bloomberg’s faulty analysis of the financial crisis:
This link from Rortybomb’s Mike Konczal has a lot of good information that debunks the obvious canards. It uses peer reviewed studies not right wing canards and memes meant to promote the interests of the financial services industry.
The first thing to point out is that the both the subprime mortgage boom and the subsequent crash are very much concentrated in the private market, especially the private label securitization channel (PLS) market. The GSEs were not behind them. That whole fly-by-night lending boom, slicing and dicing mortgage bonds, derivatives and CDOs, and all the other shadiness of the 2000s mortgage market was a Wall Street creation, and that is what drove all those risky mortgages.
For some data, start here: ”More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions….Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.”
As Center For American Progress’ David Min pointed out to me, the timing doesn’t work at all: “But from 2002-2005, [GSEs] saw a fairly precipitous drop in market share, going from about 50% to just under 30% of all mortgage originations. Conversely, private label securitization [PLS] shot up from about 10% to about 40% over the same period. This is, to state the obvious, a very radical shift in mortgage originations that overlapped neatly with the origination of the most toxic home loans.”
The source of that bolded quote was the Federal Reserve Board, btw. It clearly showed through reported data that the majority of bad loans came from the private sector, 
not Fannie and Freddie. That’s not to say that Fannie and Freddied didn’t jump on board and add to the problem. It just shows that the clear motivator was not the Affordable Housing Act which was supported by both the Clinton and the Bush administrations. Here’s some additional data that’s germane to the analysis.
- Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
- Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that’s being lambasted by conservative critics.
The numbers on subprime lending are extremely clear. The loans that were offered to the weakest borrowers–including NINJA or zombie loans–basically showed up during the housing bubble. Most economists date that period from 2001 to 2007. The worst of the subprime lending occurred during 2004 to 2006 which is around ten years after the affordable housing laws were passed. Ten years is way too long of a window to try to connect bad lending behaviors to the bill. The bad lending behaviors clearly came from institutions trying to profit from the speculative bubble. There’s a really good graphic at McClatchey that shows exactly which 15 private lenders were most responsible for the problem. I’m sure you’ll recognize the usual suspects.
The other thing that the Bloomberg diatribe ignores is the number of legal inquiries being made into the practices meant to speed up both securitization and foreclosure practices by private lenders. There are many, many studies in the legal journals that show that the banks were quick to do both of these thing to earn fee income. Why would you foreclose on people if you wanted to have a huge portfolio of loans to poor and minorities to show the government? Also, why would you sell them off? Wouldn’t you want to keep them on your books to show you weren’t redlining? The rush to foreclosure with inadequate documentation is just one example. Mortgage appraisal fraud was another problem during the peak of the crisis. It just makes absolutely no sense that so many laws could be broken in the name of pleasing a government with an affordable housing agenda. Clearly, these moves were profit-motivated because most of the banks securitized the loans to get rid of them from their books plus, the holders of the loans and the securities sought insurance to guard against default. They were moving the assets off their balance sheet and betting they all would default at the same time.
Economists and financial analysts are taking on Bloomberg’s comments all over the place. Here’s one such article from Forbes. Barry Ritholtz characterizes Bloomberg’s comments as “extremely disappointing” and Bloomberg himself as “clueless” and “empty headed ideologue”. The Forbes article points to further research indicating that Bloomberg’s comments fly in the face of the data.
In a February article for the Journal of Urban Affairs, Dan Immergluck shows how the Federal Housing Authority (FHA) hit the lending accelerator after the housing bubble burst. As the real estate market roared, FHA lending dropped to historic lows, only to rev back up once the subprime mortgage market bottomed out.
This clearly represents the ongoing break with reality that characterizes the thinking and words of so many elected officials. It’s disheartening because I know that this seems more motivated by protecting ‘evil doers’ than the public. It’s deliberately false, deliberating misleading, and creates an atmosphere where it will be impossible to correct laws and regulations that could prevent this from recurring.
I’m beginning to think that a requisite for running for office is the ability to lie or to deliberately remain ignorant of the facts. I can look at politicians like Rick Perry, Herman Cain, Michelle Bachmann, and Sarah Palin fully realizing that they’ve only got primary colors in their school box and that they really have no desire to look for the rest of the rainbow. However, Mayor Bloomberg can only be characterized as up to something because he has never struck me as stupid.
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Oh my — more homework!!
The meme of blaming the victims — who probably had no idea that the banks were gaming their home loan — could be winning. The 1% love to rewrite history — and facts.
Back to reading the details in the links.
Blaming poor people seems to be something that these guys do on a regular basis any more. Drives me nuts. How can people with no power be powerful? Makes NO sense whatsoever.
Ignorance is surely bliss for teapublican candidates cause it’s not like they get points from their constituents for like, knowing stuff, or anything.
Remember that famous Barnum quote about suckers?
ralph, all that perry “giddy upping” put me in mind of the rawhide bar in the marigny … if you catch my drift
I catch your drift and I agree 🙂
I think he’s out of him mind on some kind of pain meds. That’s not an excuse though it is a reason he shouldn’t be running for president.
Herman Cain Sexual Harassment Charges: Third Ex-Employee Comes Forward
http://www.huffingtonpost.com/2011/11/02/herman-cain-sexual-harassment_n_1072275.html?igoogle=1
I am putting it in my evening reads, being posted soon.
And yet, Cain is still leading in the polls, despite being blissfully ignorant of foreign affairs, the Constitution, or the workings of the Federal government.
Since Cain doesn’t know China has nukes, do you think he’s worried about the “missile gap” with the Soviets?
Ralph, I think Cain would also be worried about a “Mineshaft Gap.”
MM, Thanks. I just played that whole scent in my head. Best thing that’s happened in days 🙂
scent = scene wow.
I thought Perry appeared to be either manic and in need of lithium or stoned on cocaine.
I’m betting he’s on pain meds for recent back surgery but that’s no excuse for being nuts!
Why conservatives will forgive Herman Cain: they don’t assume women are telling the truth.
http://www.thedailybeast.com/articles/2011/10/31/herman-cain-allegations-why-conservatives-forgive-sex-scandals.html
The howl from the financial industry apologists would have you believe this was ‘entirely’ Fannie and Freddie and a prime example of Government social engineering [trying to reduce the practice of redlining, which is nothing more that a quiet way to discriminate].
What were the poor, poor bankers to do? Commit fraud and financial terrorism, of course.
Were there people who ‘overbought’ who should have known better. Yes. But we also know that these mortgage/bank/financial companies deliberately targeted low income neighborhoods with these toxic deals. Why? Because it meant big fees and profits. I’m so weary of hearing the poor blamed for being targeted and snookered by people wearing $5000 suits.
And it’s not like these crooks have any problem with shaving the truth, breaking laws. In fact, they thumb their nose at Americans. I found this over at Naked Capitalism before I scooted out this morning. It left me in a very bad mood:
“A writer for the Minneapolis CityPages managed to worm his way into a presentation to the annual meeting of the Minnesota Chamber of Commerce by US Bank’s CEO, Richard Davis. Even though Occupy Minnesota was protesting outside, Davis chose to ignore them. His speech made clear that the business community does not care about long-term self interest, let alone social responsibility. Housing and the foreclosure crisis were absent from the 2012 legislative priorities. But tax reform, which is code for shifting even more of the cost of government on to the small fry? Yeah, that’s a big deal.
Davis’ apparent lone comment on the public ire against the banks was dismissive:
“‘Everybody’s breaking the rules, blah blah blah,” Davis said at one point, mocking the general sentiment behind the public outrage before admonishing them to “Get over it.” ”
http://www.nakedcapitalism.com/2011/11/hubris-watch-us-bank-ceo-sniffs-about-breaking-rules-when-his-bank-has-huge-trustee-liability.html
Get Over It! The arrogance is absolutely stunning and the Rule of Law means nothing. These people deserve to be locked up. But please, torture them first :0).
As for the Perry thing? I watched that NH speech and could not believe it. Is he kidding?? That giggle squirm is presidential? My first thought was : ‘this is what your brain looks like on drugs.’
We’re being subjected to clown cars on parade. I’ve never seen such a motley crew.
Btw, I don’t think Bloomberg is clueless. I think he’s trying to defend the flimsy barricades against the tidal wave that’s coming.
Crooks and Liars Rick Perry Repeats Fake Quote from ‘Occupy Toronto’ Satirical Piece
Maybe he should just do coke and hang out with domestic terrorists and throw his pastor and grandma under the bus- would that make all you progressive and liberals like him better? You liked Obama, and he had just as much ignorance as that.
Oh, I know why you all had a different standard for Obama than you do for Cain… Obama is half white.
You obviously don’t know that most of us–including me–didn’t vote for Obama. But, thanks for playing oh ye of worthless stereotypes! Ever think about finding some facts out before you leap to a stupid conclusion based on obvious biases?
Conservative teacher,
WTF are you talking about? I seriously doubt there is anyone here who supported Obama in the primaries or who voted for him in the general election. We left the progressive blogs because we didn’t trust Obama and didn’t think he was qualified. If you want to comment on a blog, maybe you should read some of the posts first.
I’d have to pull my kid from any class this guy teaches. He says things off the top of his head all the time without ever checking to see if it’s real or not. Just seems to dwell in the land of irrational bias.
Don’t count me in your tirade–never voted for Obama and have no intention of voting for him in 2012. But because Obama has been awful at the presidenting thing doesn’t mean we should all jump aboard the clown car express. Cain had 10 days to prepare his answers to the Politico story. The way he’s handled this says very little for his management skills. And Perry might as well have set fire to his own campaign ambitions with that performance [or whatever ‘that’ was] in NH.
The Republicans had/have a clear shot at the WH in 2012. But not if they’re running knuckleheads. Americans of all political stripes are fed up with a bought political system and pols who represent themselves and their benefactors and no one else. The choice in 2012?
Right now, there is no legitimate choice.
And btw, the racism angle doesn’t work anymore.
Funny how Herman Cain was just saying last week that racism wasn’t a problem for him ever or any one else. Now, he’s saying this is a racist plot by liberals and dirty campaign tricks by Rick Perry. What’s next? Iranians or North Koreans did it? It’s a terrorist plot?
I think just about every one of us here are registered independents. I’m having a hard time coming up with a name of any one who is a partisan here.
Yup…I think you are right Dak.
I am just ever more frustrated that Gary Johnson has been shut out of the process. I can see myself having to resume my normal habit of voting for neither official state approved party.