Legal Commentary

Fannie And Freddie Not The Problem

By Big Tent Democrat

Below I called Ross Douthat on clothing the extreme and fallacious view that "Baileyism" (read Fannie Mae and Freddie Mac) caused the current economic crisis with the patina of respectability. Douthat's former Atlantic colleague Matt Yglesias points to this McClatchey article that debunks the new Republican/ extreme conservative talking point that Douthat seeks to forward - that it was Baileyism (read Fannie and Freddie) that caused the problem:

As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail. . . . They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

(Emphasis supplied.) More . . .

Unless Douthat thinks George Bailey was a predatory lender, I think this pretty much destroys his attempt to slip this pernicious nonsense into the mainstream. Hopefully, Yglesias will point that out to his ex-colleague.

By Big Tent Democrat, speaking for me only

Full post as published by TalkLeft on October 12, 2008 (boomark / email).