[Peace-discuss] Fw: Guest Commentary Submission

[Stuart Levy]

David, this is such an excellent piece!

Shame on the N-G for not publishing it already.

Would you be inclined to try to get it posted elsewhere - on 
commondreams, maybe, or truthout?

On 12/24/11 9:19 AM, David Green wrote:
> This is what I submitted to the N-G a month ago, as yet unpublished. 
> They're very committed to the Big Lie, but I'm glad to see Nocera on 
> the case. Ritholtz was the first to apply the phrase. Wallison is the 
> primary advocate, but it was also the publication of the 
> Morgenson-Rosner book six months ago that fueled broader publicity. 
> Nocera doesn't mention that, probably due to the usual NYT "collegiality."
> http://www.nytimes.com/2011/12/24/opinion/nocera-the-big-lie.html?hp
>
>     ----- Forwarded Message -----
>     *From:* David Green <davegreen84 at yahoo.com>
>     *To:* John Beck <jbeck at news-gazette.com>
>     *Sent:* Saturday, November 26, 2011 4:16 PM
>     *Subject:* Guest Commentary Submission
>
>     *The Big Lie of Wall Street and the 1%: Fannie and Freddie are
>     Responsible for the Economic Crisis*
>     David Green
>     The mantra of the neoliberal era of the past three decades is that
>     government fails, while the free market succeeds. When events and
>     facts shatter this dogma even more obviously than usual---as in
>     2008---reality must be not only denied, but replaced with a boldly
>     fabricated scenario.
>     Such is the case regarding the assertion that the practices of
>     government-supported mortgage securitization agencies Fannie Mae
>     and Freddie Mac---rather than mortgage lenders and Wall Street
>     bankers---were responsible for the practices that resulted in the
>     housing bubble, the financial meltdown, the bailout of the 1%, and
>     the outrage of the 99%. An attentive reader of this newspaper
>     could not have failed to notice this trend in columns, editorials,
>     and letters. This trend reflects a conscious propaganda campaign.
>     Barry Ritholtz recently summarized in "The Big Lie Goes Viral" on
>     the Washington Post's website: "Wall Street's Big Lie is that
>     banks and investment houses are merely victims of the crash. It
>     was not irresponsible lending or derivative or excess leverage or
>     misguided compensation packages, but rather long-standing housing
>     policies that were at fault. Indeed, the arguments these folks
>     make fail to withstand even casual scrutiny. But that has not
>     stopped people who should know better from repeating them."
>     The Big Lie serves not only to obscure the gross culpability of
>     Wall Street, but the genuine culpability of (corporate-driven)
>     government. Economists like Dean Baker, who debunks the Big Lie on
>     his blog, never fail to emphasize the flaws in Fannie and
>     Freddie---as "government supported enterprises" operating in a
>     for-profit context---that led to their collapse. More important,
>     the Big Lie distracts us from the deregulatory financial policies
>     of administrations of both parties, the willful negligence of the
>     Federal Reserve in failing to prevent speculative bubbles, and the
>     revolving door between Wall Street and the White House.
>     Blogger Glenn Greenwald writes: "People like (Robert) Rubin and
>     (Lawrence) Summers shuffle back and forth from the public to the
>     private sector and back again, repeatedly switching places with
>     their GOP counterparts in this endless public/private sector looting."
>     The Big Liars not only assert Wall Street's innocence, but exploit
>     the privileges of the 1% to manipulate government
>     policies---deregulatory and/or interventionist---to enhance their
>     profits. Recent revelations regarding Newt Gingrich's lucrative
>     services to Freddie Mac provide a timely example of such
>     corruption, and the "free market" hypocrisy that goes with it.
>     A balanced assessment of Fannie and Freddie can be found online in
>     the Financial Crisis Inquiry Report (FCIC) of the National
>     Commission on the Causes of the Financial and Economic Crisis in
>     the United States: "These government-sponsored enterprises had a
>     deeply flawed business model as publicly traded corporations with
>     the implicit backing of and subsidies from the federal government
>     and with a public mission. ... We conclude that these two entities
>     contributed to the crisis, but were not a primary cause.
>     Importantly, GSE (government supported enterprise) mortgage
>     securities essentially maintained their value throughout the
>     crisis and did not contribute to the significant financial firm
>     losses that were central to the financial crisis."
>     The lone Commission dissenter from this report, Peter Wallison of
>     the American Enterprise Institute, with research support from AEI
>     economist Edward Pinto, has been a major proponent of the Big Lie.
>     David Min of the Center for American Progress has responded:
>     "Did Fannie and Freddie buy high-risk mortgage-backed securities?
>     Yes. But they did not buy enough of them to be blamed for the
>     mortgage crisis. Highly respected analysts who have looked at
>     these data in much greater detail than Wallison, Pinto, or myself,
>     including the nonpartisan Government Accountability Office, the
>     Harvard Joint Center for Housing Studies, the Financial Crisis
>     Inquiry Commission majority, the Federal Housing Finance Agency,
>     and virtually all academics, have all rejected the Wallison/Pinto
>     argument that federal affordable housing policies were responsible
>     for the proliferation of actual high-risk mortgages over the past
>     decade."
>     Finally, promoters of the Big Lie have relied on the
>     much-discussed book "Reckless Endangerment" by Gretchen Morgenson
>     and Joshua Rosner. I would refer readers to a thorough critique by
>     Jeff Madrick and Frank Partnoy at the New York Review of Books
>     website. They write that the authors' "bold claim is not
>     substantiated by persuasive analysis or by any hard evidence in
>     the book. The GSEs did generate large losses, but their bad
>     investments in housing loans followed rather than led the crisis;
>     most of those investments involved purchases or guarantees made
>     well after the subprime and housing bubbles had been expanded by
>     private loans and were almost about to burst."
>     The Big Liars have big guns in their arsenal. They control wealth,
>     power, the mainstream media, and much of academia---all without
>     threatening the use of pepper spray. But it's up to the 99% to
>     decide whether the burning sensation of lies is more intolerable
>     than that of chemical agents.
>     David Green (davidgreen50 at gmail.com
>     <mailto:davidgreen50 at gmail.com>) lives in Urbana, and contributes
>     to News from Neptune on UPTV.
>
>
>
>
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