New Economic Perspectives has the article The WSJ and Barron’s Apologists for the Banksters Peddle Wallison’s Fables by William K. Black. Remember that Black is one of the regulators who lived the history that he is reporting.
But Wallison (and the WSJ) also ignores the key act of deregulation that lies at the heart of his thesis (and is fatal to that thesis). The most important act of deregulation was the removal of our loan underwriting rule that we used to drive “liar’s” loans out of the S&L industry beginning in 1991. The rule was destroyed by Bill Clinton and Al Gore’s “Reinventing Government” assault on effective regulation. The underwriting rule was replaced with a deliberately unenforceable “guideline.” The elimination of the rule was not the product of housing goals – it was the product of Clinton and Gore’s “New Democrat” hostility to effective regulation. The elimination of the rule made it far harder for regulators to ban liar’s loans and take enforcement action against them. (The Fed had unique authority once HOEPA was passed in 1994 to ban all liar’s loans, but Alan Greenspan and Ben Bernanke’s anti-regulatory dogmas ensured that the Fed refused to ban such loans even when it knew their fraud incidence was 90 percent. Their refusal had nothing to do with affordable housing goals and everything to do with the fact that they were co-celebrants of Wallison’s anti-regulatory dogmas.)
The WSJ op ed actually spends very little time discussing Wallison’s thoroughly and repeatedly discredited thesis that Fannie and Freddie, because of government housing goals, were the demons that caused the crisis. The WSJ op ed is really devoted to providing yet another apologia for the banksters – who are the victims of an overly aggressive DOJ.
I know there is no amount of counter-evidence that I could ever point people to to convince most of them that the Faux Noise fable of Barney Frank as the culprit is a complete fable with no supporting evidence. The only thing I can hope to do with these articles is to strengthen the resolve of the people who know the truth. Someone has to be speaking truth to power, all the while that power is speaking lies to the weak.
The other value in my reading these articles and blogging about them is to remind myself and others about the severe damage that Bill Clinton and Al Gore did during their administration. The reason this is so important is that Hillary Clinton is running for President. She has a special responsibility to disown the damage that her husband did. If she fails to do so, articles like this one are needed to remind us of the damage this supposed progressive can actually do.
Mark, A lot of rambling in your comment, but I am approving it anyway.
Jimmy Carter and Peter Grace, both Democrats, cut the capital
gains tax, fueling the birth of Amgen, Apple, Genentech and
Microsoft while Carter was still president. But Reagan raised
the capital gains tax, fueling an LBO craze which offshored
manufacturing to China. Oligarchs are afraid technology
will lessen their ability to control us, which is why
Reagan wanted everyone to use IBM mainframes when
microcomputers were born. Now all of Reagan’s economists
are whoring for China. Obama brought manufacturing back
to the USA but oligarchs want to give those jobs to the offshore
workers they bring here. Most great modern inventions are
actually thousands of years old, but our patent system made
them usable for the benefit of humanity, so now the oligarchs
want to ruin our patent system! American school shoes did
not require duct tape repairs. Oligarchs view anything individuals
do as trolls, internet or patents. We should federally regulate all
real estate developers, since they crashed the economy. Since the
Constitution demands a federal post office, the government must
also own all electricty and internet. Night vision can see though
hoodies but oligarch control freaks would rather we freeze
our ears off. Bill Donohue said “Muslims are right to be angry”
after the Charlie Hebdo massacre. Before the hostages, Jerry
Falwell thought that Khomeni had to be pretty good because he was
a fellow “fundamentalist”. Osama was the ultimate faith-based
initiative, which is why we should federally license and
psychiatrically regulate all churches. Paul’s word for fornication
meant prostitution. Pauls’ word for masturbation meant softness or malady.
Paul’s word for sycophant meant slander. Moneychangers were
racist about Roman coins. Augustine made pre-quick abortion
a misdemeanor. Oligarch casuistry tries to change the meaning
of words! Tea Party foot soldiers are all on disability and rent control.
Let me quote the introduction to this article that I wrote on the Sturbridge for Bernie Sanders Facebook page.