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Tilting at Windmills

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November 13, 2009

THE COMMUNITY REINVESTMENT ACT ZOMBIE LIE.... The Wall Street Journal ran yet another op-ed today claiming that home loans made "under the pressure of" the Community Reinvestment Act helped to "fuel the greatest housing bubble our nation has ever seen."

Former House Majority Leader Dick Armey (R-Texas) recently pushed the same line. It leaves Paul Krugman with a feeling of hopelessness.

There's a persistent delusion, on the part of many pundits, to the effect that we're actually having a rational political discussion in this country. But we aren't. The proposition that the Community Reinvestment Act caused all the bad stuff, because government forced helpless bankers into lending to Those People, has been refuted up, down, and sideways. The vast bulk of subprime lending came from institutions not subject to the CRA. Commercial real estate lending, which was mainly lending to rich white developers, not you-know-who, is in much worse shape than subprime home lending. Etc., etc.

But in Dick Armey's world, in fact on the right as a whole, the affirmative-action-made-them-do-it doctrine isn't even seen as a hypothesis. It's just a fact, something everyone knows.

Truly, sometimes I despair.

It's probably the single most frustrating aspect of our political discourse. The right will make an outrageous claim; the claim will be proven false; but instead of moving on to a new claim, conservatives just continue to repeat the debunked point.

It's the crowd that creates their own reality.

Steve Benen 11:10 AM Permalink | Trackbacks | Comments (31)

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The right will make an outrageous claim; the claim will be proven false; but instead of moving on to a new claim, conservatives just continue to repeat the debunked point.

This has been the core of the Republican strategy for the last quarter century. When it stops working, they'll try something else.

Posted by: qwerty on November 13, 2009 at 11:14 AM | PERMALINK

This is typical Replicant big-lie/little-lie/lie-till-your-tongue-falls-off behavior. It's what all would-be totalitarians do to try to gain legitimacy.

The biggest lie, of course, is that their opponents are totalitarians, of every stripe at once.

Posted by: Cap'n Chucky on November 13, 2009 at 11:19 AM | PERMALINK

conservative rule #1:

capitalism is always the victim..

and it usually comes at the hands of poor people

Posted by: mr. irony on November 13, 2009 at 11:27 AM | PERMALINK

mr. irony is spot on!

it is amazing how damaging poor people are to the capitalist system. if we could just convert them into cord wood or chunks of coal...

maybe when the Repugnants regain power...

Posted by: neill on November 13, 2009 at 11:32 AM | PERMALINK

Not only that, but the system is so complex that if and when rational people actually pull it out of the fire, the rightwing will claim the credit. Wait and see.

Posted by: Lee A. Arnold on November 13, 2009 at 11:34 AM | PERMALINK

Many always talk about what fueled the housing bubble. I've pointed to a few links here:

http://liberaldefenderoffreedom.blogspot.com/2009/11/when-did-housing-bubble-start.html

that show what fueled it. Many avoid what started the bubble.

I might be way off but I'm not the first person to think this as I noted.

Posted by: mikefromArlington on November 13, 2009 at 11:35 AM | PERMALINK

Truly, sometimes I despair. P.K.

That's all they want. Grind down the thinkers with stupidity and gross nonsense and slowly the thinkers will sucumb and withdraw to save their own sanity and the catapulters of crapola will have the floor.

It's a non fatal form of eliminationism. Non fatal to the thinkers more or less. The system however, dies.

Posted by: burro on November 13, 2009 at 11:42 AM | PERMALINK

And the media, except for the blogs, goes right on letting them get away with lying. If we had real journalists in the major newspapers and on TV who called them on the lies, we would be in such better shape, it makes me ill even thinking of the travesty that is our MSM.
Of course, there are Stewart and Colbert.

Posted by: bloomingpol on November 13, 2009 at 11:44 AM | PERMALINK

Our fact-free "he said, she said" media are absolutely complicit in this. As long as there's no penalty for lying, shameless people will be able to win by lying.

Posted by: Redshift on November 13, 2009 at 11:50 AM | PERMALINK

There's a reason the Republican right wing and the religious fundamentalists get along so well. They both excel at belief without evidence. I used to think that most of these people knew what they were saying was a lie, but would say it for whatever political advantage they think they can get. But now I think many of them actually believe it. The less evidence, the better. Faith is better than facts.

Posted by: emd on November 13, 2009 at 11:52 AM | PERMALINK

It's probably the single most frustrating aspect of our political discourse. The right will make an outrageous claim; the claim will be proven false; but instead of moving on to a new claim, conservatives just continue to repeat the debunked point.

"bloomingpol" beat me to it above. Never forget the immense help these idiots get from their water carriers in the MSM to keep these falsehoods alive and kicking.

Posted by: electrolite on November 13, 2009 at 11:53 AM | PERMALINK

Oh the irony from a group that decries situational ethics and claims to have the inside scoop on immutable truth. Cynical much?

Posted by: Scott F. on November 13, 2009 at 11:55 AM | PERMALINK

The really terrifying prospect is: if these people EVER win an election again your country is history.

The good news: the rest of the world meanwhile is more or less prepared.

Ot at least I hope so.

Posted by: Vokoban on November 13, 2009 at 11:57 AM | PERMALINK

For the record, the nice folk at McLatchy Newspapers ran the truth back before thee lies began and it is available for anyone to check...

http://www.mcclatchydc.com/251/story/53802.html

Posted by: J. Barrett Wolfr on November 13, 2009 at 12:02 PM | PERMALINK

Trying to "reason" with the right wing is like trying to reason with a 3-year-old. Their favorite word is "no." They don't deal with truth or civil agreement, but immediate wants. They are verbally adept enough to imitate the syntax of discourse, but it has no real meaning to them.

You can offer a sound argument: finish half your sandwich, and you can have half a cookie. They agree, eat nothing and demand the cookie. I realized my folly as a parent when I implored my 3-year old to stick to her end of the bargain: "You gave your word!" She looked at me with wonder. She literally didn't understand.

What Krugman despairs of is the crux: how do you deal with people who have no capacity or interest in being fair or reasonable adults? My child grew up and learned. No so the right wing, which parades ignorance and, even when it knows better, is aggressively mendacious and destructive.

Posted by: SF on November 13, 2009 at 12:06 PM | PERMALINK

It's probably the single most frustrating aspect of our political discourse. The right will make an outrageous claim; the claim will be proven false; but instead of moving on to a new claim, the media just allows conservatives to just continue to repeat the debunked point.

Fixed.

Zombie lies wouldn't matter so much if they were restricted to the fringes of the conservative cult. But the so-called "liberal media" has abdicated its responsibility to demand any factual basis for our national discussion, and Republicans are overwhelmingly the beneficiary of this trait. And why not? After all, it's the product of both the corporate media consolidation begun under Reagan and the GOP's decades-long project of working the refs with their bogus "liberal media" claim.

Conservatives couldn't repeat zombie lies if the so-called "liberal media" didn't let them. But they do let them, and it isn't an accident. In doing so, the media has helped poison the well of national discourse and provided in-kind contributions to the conservative movement.

Posted by: Gregory on November 13, 2009 at 12:10 PM | PERMALINK

It's called alternate reality.

That's what exists in the minds of the wingnuts.

ACORN

CRA

Welfare

Health care reform.

All of the above = the downfall of the USA, the ride to hell, etc.

Crikey.

A lie is a lie no matter who you lie to (or with!).

The de-volution of those who think they know the truth is quite stark.

Next up: Swine-flu kills more white folks than minorities. A Kenyan bug set loose on the planet!

The economy tanked because too many coke addicts got a hold of virtual wealth and gambled and gambled, laughing all the way to the bank.

Posted by: Tom Nicholson on November 13, 2009 at 12:13 PM | PERMALINK

Agree that most of the media is complicit. But the alternative? From their point of view, they will NEVER become the arbiter of what is accurate/inaccurate true/not true. Explaining the relevant facts of any chain of events beyond the most simplistic is potentially extremely controversial and goes beyond the mission scope of the MSM as a whole, which is to sell advertising and be mildly informative and entertaining.

*Someone needs to do cogent analysis, but as a money-making enterprise, there is no incentive, in fact, there's a disincentive, to question powerful interests. They sustain themselves with the presentation of consistent, predictable images and sounds that give people a sense of connection to the larger world. That is all.

Posted by: FC on November 13, 2009 at 12:14 PM | PERMALINK

"There's a persistent delusion, . . .having a rational political discussion in this country"

We haven't had one of THOSE since the Lincoln-Douglas Debate.

-and, since Fox News didn't cover it, it probably didn't happen. . .

Posted by: DAY on November 13, 2009 at 12:18 PM | PERMALINK

Creating a counter-narrative that blames the poor folks rather than the bankers, and nails the government bureaucrats as well? Too perfect!

As Joseph Goebbels said, “The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly - it must confine itself to a few points and repeat them over and over”

Gosh - do you suppose that Rove and the other GOP message-masters have studied the media manipulation and myth creation techniques of totalitarian regimes or something?

Posted by: Bokonon on November 13, 2009 at 12:27 PM | PERMALINK

The Republican propaganda tactics are difficult to combat in the short run, and will be for as long as the right-wing media actively upholds their alternate political reality. But in the long term governments based on a false reality will always be brought to heel by reality. That, in a nut shell, is what Adam Smith said and that is what the present super-recession is all about.

Unfortunately, we are in a particularly deadly reality where the failures of the Republicans are quickly be forgotten, as their media fan the flames of the people's misery. If they get away with this, it will leave it to future generations in other countries to enjoy the long-term correction.

It won't be so long in the future, either. It's already happening as the U.S.'s influence and economic strength continue respond to Bush economics.

Posted by: frank logan on November 13, 2009 at 12:32 PM | PERMALINK

It's the crowd that creates their own reality.

And American liberals are the crowd that are the Zombie Liar enablers.

You can't just complain all the time.

Posted by: Bob M on November 13, 2009 at 12:33 PM | PERMALINK

In an October 17, 2004, New York Times Magazine article by writer Ron Suskind, quoting an unnamed aide to George W. Bush:

The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."
Posted by: de stijl on November 13, 2009 at 12:41 PM | PERMALINK

Republicans simply are unable to face reality let alone describe it accurately. Everything has to somehow conform to their version of free market ideology.

They drank their own dirty bathwater for 8 years and drove the economy into the ground AS A DIRECT RESULT. Now they waht to do it to us again.

Amazing stupidity combined with amazing gall is dangerous to democracy.

Posted by: pj in jesusland on November 13, 2009 at 12:48 PM | PERMALINK

If it's a long-discredited zombie lie, then sooner or later, Camille Paglia will repeat it on Salon, and Joan Walsh will let it get past without fact checking, correction or retraction, because after all, it's her obligation to represent "different viewpoints." Which is pretty much the standard "liberal" media approach, in which truth is just one point of view to be presented alongside the "equally valid" arguments based on factual errors.

Posted by: T-Rex on November 13, 2009 at 12:52 PM | PERMALINK

When you watch Karl Rove on Fox News remember that he is a devote of Machiavelli, who advised that it is not necessary for the Prince to be truthful, only that he APPEARS to be truthful in order to maintain his credibility with the masses. So, when you have a network like Fox that will let you lie, and lie again, without ever presenting anyone to challenge that lie (that's why they got rid of the Fairness Doctrine), there really is no profit for the politically ambitious to tell any truth, and only the tender-minded with naive scruples would object.

Here is what Machiavelli had to say on the subject, which Rove no doubt has underlined and highlighted in his copy:

"It is not necessary for a prince to have all the above-mentioned qualities [being merciful, faithful, humane, honest, and religious] in fact, but it is indeed necessary to appear to have them. Nay, I dare say this, that by having them and always observing them, they are harmful; and by appearing to have them, they are useful, and it is [useful] to appear merciful, faithful, humane, honest, and religious, and to be so; but to remain with the spirit built so that, if you need not to be those things, you are able and know how to change to the contrary.... And nothing is more necessary to appear to have than this last quality [religious devotion]. Men in general judge more by their eyes than by their hands, because seeing is given to everyone, touching to few. Everyone sees how you appear, few touch what you are; and these few dare not oppose the opinion of many, who have the majesty of the state to defend them.

So let a prince win and maintain his state: the means will always be judged honorable, and will be praised by everyone. For the vulgar are taken in by the appearance and the outcome of a thing, and in the world there is no one but the vulgar.... A certain prince of present times, whom it is not well to name, never preaches anything but peace and faith, and is very hostile to both....

Posted by: Ted Frier on November 13, 2009 at 1:06 PM | PERMALINK

de stigl -- thanks for the quote re empire. Is empire consistent with government of the people, by the people, for the people? History says no. Democracy, if it existed at all, falters under the weight.. And the danger isn't widely appreciated. Empires always see themselves as fundamentally different from (therefore not likely to suffer the same fate as) the ones that came before.

Posted by: FC on November 13, 2009 at 1:06 PM | PERMALINK

"The art of concluding from experience and observation consists in evaluating probabilities, in estimating if they are high or numerous enough to constitute proof. This type of calculation is more complicated and more difficult than one might think. It demands a great sagacity generally above the power of common people. The success of charlatans, sorcerers, and alchemists — and all those who abuse public credulity — is founded on errors in this type of calculation. "

--Benjamin Franklin

Posted by: toowearyforoutrage on November 13, 2009 at 2:42 PM | PERMALINK

"It's often not enough for one to simply be exposed to the truth, because the brain will actually fight to defend it's attachment to cherished falsehood." Unknown

Posted by: bewildered canadian on November 13, 2009 at 5:10 PM | PERMALINK

Dear Steve:

To make yourself better informed on this topic, you should read "Our Lot: How Real Estate Came to Own Us" by Alyssa Katz of Mother Jones magazine. She is the leading left-of-center expert on the history of housing politics.

Looking back from 2009, Katz asks:

“How did Fannie Mae and Freddie Mac … turn into the world’s biggest funders of Wall Street-backed subprime mortgages? … It all started with the best of intentions, with … the activists who demanded bank loans for the poor and urban.”

Democrat Jim Johnson took over as CEO of Fannie Mae in 1991. He soon came up with a nice round number as a goal: one trillion dollars to lend by 2000 to ten million incremental homeowners. Katz writes:

“Jim Johnson only needed to point to the Atlanta Journal-Constitution’s [Pulitzer Prize-winning investigative series] The Color of Money to show that he was embarking on nothing less than a civil rights crusade. …”

Fannie Mae wanted to raise the homeownership rate to 75 percent, which meant, Katz notes, that “Consumers would have to borrow more and pay less up front.”

Johnson, whom Barack Obama had put in charge of vetting his Vice-Presidential candidates until it was revealed that he had snagged a cheap mortgage as a “Friend of Angelo” [Mozilo], quickly found a private partner:

“By 1993, he’d made a deal with [Mozilo’s] Countrywide to buy $2.5 billion in loans for lower-income and minority borrowers. Financially, these homebuyers would be a motley lot, with no money in the bank, other debt to deal with, and less than stable employment. … Fannie Mae targeted much of its advertising budget to Black Entertainment Television and made a sponsorship deal with Univision, the dominant Spanish-language TV network. … The advertising campaign explicitly targeted young families, new immigrants, and single parents.”

Katz points out the culture-changing role that Fannie Mae played:

“More than anything, Fannie Mae made working people comfortable with the idea of taking on vast debt as the price for participating in the American Dream. From 1989 to 2004, mortgage debt for low-income people increased by 46 percent, compared with just 15 percent for upper-middle-income and 5 percent for high-income.”

Johnson, to his credit, retained important limits on debt, such as 3 percent minimum down payments. But George W. Bush would go to war against down payments in 2002.

Meanwhile Johnson’s allies in the Clinton Administration decided to goose the homeownership rate to at least 67.5 percent. But who was left to lend to? Katz comments:

“The reality was that the consumers the [mortgage] industry had depended on … were spoken for. More than nine of every ten suburban middle-class white households owned their homes. If the industry were going to grow, it would have to tap new borrowers, and HUD’s research team concluded that those were going to be urban, black (only 43 percent were homeowners), Latino (41 percent), and people under age thirty-five (just 38 percent).”

So Clinton decided to enlist the real estate and financial industries in Fighting Racial Bias for Fun and Profit. Katz quotes him from a 1994 speech to the National Association Of Realtors Conference:

“ ‘I want to target new markets, underserved populations, tear down the barriers of discrimination wherever they are found,’ he proclaimed to cheers at the Realtors’ annual convention.”

Hiring “diverse” mortgage brokers only exacerbated the situation:

“The experience in neighborhoods confirmed what Fannie Mae’s market research was also discovering: Borrowers who were new to home buying, especially if they were members of minority groups, tended to care more about how they were treated by the person selling them a loan than about the financial soundness of the loan itself. If it were a friend or a family member selling the mortgage or property, so much the better.”

Subprime lending grew—but as long as Fannie and Freddie wouldn’t bless it, the problem might remain chronic rather than critical. However, under Clinton the mandates were already in place that were pushing Fannie and Freddie to covertly back subprime mortgages. Katz:

“Remember what [community activists] won back in 1991: By now, nearly half of the loans financed by Fannie Mae and Freddie Mac had to go to low-income borrowers and urban communities. … “

But where can you find enough borrowers who are both poor and prime? Fannie and Freddie couldn’t. So they started buying mortgage-backed securities that mixed some subprime in with prime. Katz explains:

“By buying prime-heavy portions of the securities as investments, Fannie and Freddie could meet Congress’s quotas for the number of loans they had to finance for low-income borrowers. … But because the riskier parts of the pools consisted almost exclusively of subprime loans, Fannie Mae and Freddie Mac were effectively putting their billions into financing subprime lending…”

Momentum was building: “Under HUD secretary Andrew Cuomo, the Clinton administration gave a parting gift to the burgeoning subprime industry”: Cuomo raised the government-sponsored enterprises’ quotas for lower-income borrowers from 40 percent to 50 percent.

Most of the pieces were now in place for the foolhardy Bush Administration to push to a cataclysmic conclusion. That didn’t stop Bush from adding his special flavor, though:

“To this brew, George W. Bush added something quite peculiar for a conservative: a racial quota. Under pressure from the Bush administration, which had launched an investigation into their financing practices, in 2002 Fannie Mae and Freddie Mac together committed to finance $1.1 trillion in loans specifically for minority borrowers. … By the time George W. Bush left office, HUD decreed, three out of every five mortgages financed by the government loan funds would have to go to the poorer half of America …”

Katz doesn’t give Bush as much of a drubbing as he deserves, but she is very accurate on her own side's responsibility.

Posted by: Steve Sailer on November 13, 2009 at 11:35 PM | PERMALINK

Isn’t it amazing that with thousands of white people having lost their homes and gazillions of dollars lost in commercial real estate, (hardly something that minorities control,) it’s the CRA and it’s lending to those unqualified minorities that is being blamed for the foreclosure mess. Not bankers making risky loans to increase the bottom line or speculators making a fast buck but minorities buying into the American dream. Politicians and Journalist have to see their friends and neighbors loosing their homes due the bad economy and those adjustable rate mortgages. They know that the CRA which assisted minority lending only covered a small percentage of banks. They see that these foreclosures have affected every layer of our society, whole suburbs are virtually abandoned in some cities, but people like Dick Armey still want to blame this mess on the poor and minority borrowers. At first I thought it was about racism and elitism but the sad fact of the matter its about power. By scapegoating minorities and the CRA, Armey abd gus pals can avoid re regulation and in short order get right back to business as usual.


Posted by: aline on November 14, 2009 at 2:44 AM | PERMALINK
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