Thursday, 9 October 2008
The Big Lie
I have to give the Democrats credit. They are bodacious. They are hoping that if they repeat a lie often enough then everyone will believe it. What is the lie? That de-regulation caused the crisis in the economy.
Yarmuth!'s campaign is using it.
"The people of Louisville understand that the economy is on the brink of a meltdown because of years of deregulation, corporate greed and the lack of oversight," he said.
Lusnford is using it.
Instead, in the TV ad Lunsford claims McConnell, the Senate minority leader, supported deregulation of the banking industry, which he says led to the meltdown in the mortgage banking industry. He avoids the issue of the Washington-crafted remedy.
Obama used it in the debate.
And I believe this is a final verdict on the failed economic policies of the last eight years, strongly promoted by President Bush and supported by Senator McCain, that essentially said that we should strip away regulations, consumer protections, let the market run wild, and prosperity would rain down on all of us.
The problem with this line of reasoning is it doesn't have any foundation in reality. I want someone to point me to the deregulation that caused this crisis. I want someone to point me to the regulation which was removed that caused this crisis. You can't. Why? Because it isn't what caused the crisis.
What caused this crisis was the lending practices encouraged by Fannie Mae and Freddie Mac. They bought up these loans to make their books look good. They encouraged sub-prime mortgages so the poor could get into homes. These were agencies, created by Democrats, promoted by Democrats, and protected by Democrats. It didn't matter to Democrats that the poor people were buying homes they couldn't afford. It was for the good of society.
It was these organizations that pushed all of these toxic mortgages and allowed them to be bundled into MBSs that were traded on Wall Street. It was these poisonous loans that created the housing bubble. It was these bad loans that created the mess we are currently enjoying. Republicans for years have been trying to reign in these practices, but the Democrats have fought it tooth and nail. The Democrats know it and yet they are trying rewrite history.
Unfortunately, it has been left to McCain to carry the truth. So far he has been reluctant to clash with Obama on this issue. In fact he has talked extensively about the greed of Wall Street. This is ridiculous. He must attack the root and not pander as a populist. He needs to tell the truth everywhere he goes and he must do it in a forceful manner. He must confront Obama with it. Hell Obama received a ton of money from these corrupt housing organizations.
If he doesn't, he will allow the Democrats to create the perception that it was deregulation that caused this crisis. And in politics perception is reality. This crisis's roots lie within liberal Democratic policy. We need to call them on this so they don't get away with pinning it on Republicans and a failure of free markets. Markets work. It was the government intrusion into these markets that has caused the failure. It caused our stock markets to lose half of their value. Not some mythical deregulation.
