Do you remember where you were when the crap hit the fan? In November of 2008, the huge financial bubble, blown to enormous size by the wealthiest crooks and liars in America, burst! It was “shock and awe” all over again, only this time “the bombs bursting in air” were splattering the American middle class all over the pavement.
Ignoring thirty years of “trickle down economics,” Republicans immediately started trying to deflect the blame to something more, shall we say, Democratic? Within minutes, their cries of “Fannie and Freddie” started flooding Fox News and even the legitimate news carriers soon picked up on it.
The New Deal creation, Fannie Mae, and its younger cousin Freddie Mac, were big blue targets and TEA Party America couldn’t holler “Fannie and Freddie” loud enough or often enough. The script being offered by Rove, Ailes, and Murdoch read that affordable housing mandates were the foundation of the entire debacle. Tax cuts were innocent bystanders. Deregulation was Bambi sleeping in the woods.
Enter Elizabeth Warren! The newly-elected Democratic Senator from Massachusetts with her strong , knowledge-backed, opinions on banking and commerce, speaking to the Mortgage Bankers Association’s 100th Annual Convention & Expo in Washington. This brilliant progressive woman left no doubt as to the culpability of “Fannie and Freddie,” thoroughly trashing the right’s favorite recession lie!
“Although Fannie and Freddie purchased securities backed by subprime loans, and some of those purchases helped fulfill their affordable housing goals, the St. Louis Fed economists found that the housing goals had no impact — no impact — on either the number of subprime loans originated or the price of those loans in the private-label market,” she said. “Affordable housing goals have been scapegoated by those who have been itching to get rid of the goals for a long time, but I think it’s time to drop that red herring.”
TEA party leaders may want to think twice before refuting Warren’s conclusion. After all, it’s going to make a lot of baggers look sort of…stupid? People like Rep. Michele Bachmann (R-Minn.) who, when asked “who was to blame for the financial crisis?” in a GOP primary debate during her presidential campaign, responded proudly, “It was the federal government that pushed the subprime loans … that pushed the Community Reinvestment Act,”
Warren who was vilified by the TEA party and right wing Republican leaders when she was considered a front-runner for the position of Chairperson of the newly formed Consumer Financial Protection Bureau, further added,
“The housing market is so important and so large,” she said, “there is no plausible scenario in which the government does not guarantee at least a portion of it. “She pressed the need to adequately regulate market participants, increase beneficial loan modifications and ensure smaller lenders have a place in the market. “We must not end up with a housing market that crowds out smaller financial institutions.”
So, if it wasn’t Fannie, and it wasn’t Freddie, could it possibly have been the “too big to fail” bankers weaving their unregulated web of profits and bonuses? And why are those same banks even bigger today? Keep your ears tuned to Senator Warren for more!