The WSJ and Barron’s Apologists for the Banksters Peddle Wallison’s Fables 3

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.

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3 thoughts on “The WSJ and Barron’s Apologists for the Banksters Peddle Wallison’s Fables

  • Mark Elmer Scott

    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.

  • SteveG Post author

    Let me quote the introduction to this article that I wrote on the Sturbridge for Bernie Sanders Facebook page.

    One only has to read this article to understand the importance of Bernie Sanders’ winning the Democratic nomination for President over the other declared Democratic candidates, whoever they may be. It is not negative campaigning to tell a true history of the close associates (including the husband of) a candidate’s part in the current economic and social debacle that is going on.

    The only redemption for such an other candidate would be for her to publicly repudiate the actions her husband took to foist the current situation upon us.

    The untold truth of the Whitewater investigation is that the Clinton’s were probably dabbling in this kind of mortgage fraud for their own profit before Bill Clinton was elected as President. If this were true, it would explain the animosity that Bill Clinton showed to his own bank regulators while he was President.

    This might even explain why Special Prosecutor Ken Starr was so eager to shift the investigation to unrelated topics. Had he made a strong case for the criminality behind Whitewater, he would have been exposing a significant source of illegal revenue of his own supporters.