Farewell. The Flying Pig Has Left The Building.

Steve Hynd, August 16, 2012

After four years on the Typepad site, eight years total blogging, Newshoggers is closing it's doors today. We've been coasting the last year or so, with many of us moving on to bigger projects (Hey, Eric!) or simply running out of blogging enthusiasm, and it's time to give the old flying pig a rest.

We've done okay over those eight years, although never being quite PC enough to gain wider acceptance from the partisan "party right or wrong" crowds. We like to think we moved political conversations a little, on the ever-present wish to rush to war with Iran, on the need for a real Left that isn't licking corporatist Dem boots every cycle, on America's foreign misadventures in Afghanistan and Iraq. We like to think we made a small difference while writing under that flying pig banner. We did pretty good for a bunch with no ties to big-party apparatuses or think tanks.

Those eight years of blogging will still exist. Because we're ending this typepad account, we've been archiving the typepad blog here. And the original blogger archive is still here. There will still be new content from the old 'hoggers crew too. Ron writes for The Moderate Voice, I post at The Agonist and Eric Martin's lucid foreign policy thoughts can be read at Democracy Arsenal.

I'd like to thank all our regular commenters, readers and the other bloggers who regularly linked to our posts over the years to agree or disagree. You all made writing for 'hoggers an amazingly fun and stimulating experience.

Thank you very much.

Note: This is an archive copy of Newshoggers. Most of the pictures are gone but the words are all here. There may be some occasional new content, John may do some posts and Ron will cross post some of his contributions to The Moderate Voice so check back.


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Saturday, November 12, 2011

The Undead Big Lie

By BJ Bjornson

Ryan Chittum has a post up that documents a pretty decent push back of the mainstream press on Mitt Romney�s repeat of the Big Lie of the financial crisis, that is was somehow the government�s, and in particular Fannie Mae and Freddie Mac�s, fault and not that of the unregulated private sector.

Of course, that was Thursday. Today, glancing at memeorandum, I see one of the top stories is titled, �Facts show Fannie, Freddie led mortgage market to the collapse�. Sure, its from the Washington Examiner, but it helps to show why �the government did it� remains the conventional wisdom of the right and GOP candidates.

It doesn�t matter how many times the myth gets debunked and the facts are trotted out to show that it was the private sector and their speculation in toxic mortgages that were the cause of the financial crisis, you have an entire party ideologically opposed to the idea that the government can do anything good (unless it involves the torture or death of brown people, beating up peaceful protestors, or procuring expensive means to better carry out the same), while also being continuously brain washed into the belief that the private sector, left to its own devices, is the greatest and most efficient distributor of wealth that can ever be, with wondrous (and so far illusionary) self-correction mechanisms that would never allow these paragons of fiscal discipline to do something as terrible as cause a world-wide financial crisis with their poor judgement and often illegal dealings.

Combine those two points and the government just must be at fault. Anything else causes too great of a cognitive dissonance amongst the true believers, and as with every other faith-based movement, the vast majority of folks are just going to ignore the information they can�t process without changing their worldview, so the Big Lie that Fannie and Freddie are responsible for the financial crisis will live a long and happy undead life, impervious to the multiple stakings of fact-based commentary.



9 comments:

  1. Here's the Big Lie [emphasis mine]:
    "Ryan Chittum has a post up that documents a pretty decent push back of the mainstream press on Mitt Romney�s repeat of the Big Lie of the financial crisis, that is was somehow the government�s, and in particular Fannie Mae and Freddie Mac�s, fault and not that of the unregulated private sector."
    In what way was there an unregulated private sector? The repeal of Glass-Steagall didn't get rid of the FDIC, the FHA, the OFHEO (the prior regulator of Fannie/Freddie), or the SEC. Thanks to Clinton's CRA regulatory changes, there were roughly 10 government agencies doing oversight to prevent financial firms from practicing "redlining", which also allowed groups like ACORN to sue financial firms suspected of alleged "redlining" (ACORN hired Obama to sue Citibank for this, back in the day); the repeal of Glass-Steagall didn't get rid of these regulations. And at the time of the financial crisis, all or most of the big banks were publicly held corporations, which meant they were also under the auspices of the useless turd Sarbanes-Oxley.
    It's hard to believe that the alleged "unregulated private sector" caused the financial crisis when those who promote that notion base it on their own myth, their own Big Lie.

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  2. SteveAR, even if you were to ignore the regulatory capture of those agencies being stuffed to the gills with former employees of the very businesses they were supposed to be regulating, and also completely ignored the laissez-faire attitude of the Bush administration's appointees to said agencies who basically failed to enforce even those regulations they were supposed to, you would be faced with the fact that the credit default swaps and other hedging financial instruments which led to the implosion of the financial markets were all quite deliberately left out of any regulatory oversight process. �Unregulated� is a perfectly accurate way to describe the situation.
    Oh, and bonus points for bringing in the wingnut scare agency du jour. For a puny, bankrupted, and never particularly well-funded organization, ACORN has apparently been responsible for far more trouble than the incredibly well-connected and well-funded organizations that were its supposed targets and only made mistakes because they lived in fear of its nefarious reach. Talk about punching above their weight class!

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  3. That "laissez-faire attitude" didn't exist; this whole situation had everything to do with both the Clinton and Bush administrations' housing policies and the regulations to support them, and is continuing under the Obama administration. Those credit default swaps and all that hedging would not have been possible without the assets generated from those policies; couple that with the monetary policy from the Fed, and that is what created the bubble that eventually burst. Again, the idea that there was an "unregulated private sector" is a myth.
    "For a puny, bankrupted, and never particularly well-funded organization, ACORN has apparently been responsible for far more trouble than the incredibly well-connected and well-funded organizations that were its supposed targets and only made mistakes because they lived in fear of its nefarious reach."
    ACORN was a puny and never particularly well-funded organization? A group that had 1200 chapters? Have you ever been sued? If not, have you ever studied how much it costs? Here is the docket history of the case I mentioned earlier. It was settled out of court and the amount wasn't announced, but it was Citibank who had to put out money. One interesting part near the bottom on an item dated 05/07/1998 where Citibank was required to pay all of the plaintiff's legal fees, nearly a million bucks. ACORN didn't need to be well-funded since they would get the banks they accused to pay ACORN's lawyers, like Barack Obama (yes, his name is on that sheet).
    It only takes one successful or successfully settled lawsuit to force changes. In this case, to force banks into making subprime loans. Add in the housing policies of the federal government and the monetary policy of the Federal Reserve and BOOM!!! a housing bubble is created and burst.

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  4. Those credit default swaps and all that hedging would not have been possible without the assets generated from those policies;
    I see, so the unregulated part of the market that caused the implosion just doesn�t matter because at some point and some time they may have actually been based on something real before the manipulation of the finance wizards over-leveraged said assets dozens of times over so that there was no way they could ever possibly pay for it should things go bad? Glad we got that worked out.
    And a million bucks in legal fees? For a company with assets of nearly two trillion? The poor dears! How on earth did they survive, paying out 0.05% of their wealth on the legal fees of a successful litigant. And nowhere in your little case file does it show that Citibank was forced to make subprime loans to anyone. Trying to support one undead lie by adding more just isn�t going to work.

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  5. Ah, come on now Ron, what else am I going to do to amuse myself, watch the GOP debate?

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  6. Just to pursue my hobby horse as a numbers stickler:
    For a company worth 2 Trillion to pay out 1 Million to settle a case will set it back by 0.00005% of its wealth (not 0.05%).
    So, it should indeed be absolutely obvious that when such a verdict cames down, that company involved will tremble in fear of the litigating organization and therefore decide to henceforth aligne its business practices with the goals of that organization rather than risk such a devastating loss ever again.

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  7. "I see, so the unregulated part of the market that caused the implosion..."
    Except it didn't. It was the regulated part that caused the implosion. The derivatives and the swaps were only as good as the value of the underlying assets. When people kept making their payments and the values of homes increased, there wasn't an issue with the derivatives and the swaps, other than the fact that there was a bubble. Once those people who shouldn't have gotten loans in the first place stopped being able pay back their loans, the part that is heavily regulated, the bubble burst and the value of the assets and everything else dropped. It had nothing to do with the myth of the "unregulated private sector".
    Speaking of regulations, the SEC is required to keep guys like Bernie Madoff from doing what he did. It didn't do its job. Obama has been President for nearly three years. So how did his administration deal with those in the SEC who didn't do their jobs? Under normal circumstances, these people would be fired. But not those in the SEC. Nobody was fired.
    "And a million bucks in legal fees? For a company with assets of nearly two trillion?"
    So I gather that it's ok for groups like ACORN and the lawyers to represent them (like Obama) to commit extortion because Citibank has all kinds of money, correct?

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