You’ve heard of the Friedman Unit; well News Ltd has its very own Albrechtsen Unit, the length of time — usually two to three weeks — that it takes for The Australian’s thickest reactionary to recycle some right-wing drivel from foreign commentators.
For weeks right-wingers in the US have been responding to criticism of the deregulated nature of US financial markets by blaming the financial crisis on the Clinton Administration. This is a bit of a tradition amongst American conservatives — during the 1992 election campaign, Bush 41 was trying to blame America’s social ills on LBJ. In this case, they’re claiming the Clintonistas pushed banks into lending to low-income (read: minority) housing borrowers.
Albrechtsen has belatedly picked up the theme, although not without having a go at Kevin Rudd first. Rudd, says Albrechtsen, won the election last year with his “brutopia” article in 2006. Quite an impressive feat for an article far more cited than read, and written when Rudd wasn’t even Opposition Leader. Evidently it somehow spread, like a highly contagious vote-changing virus, from the tiny readership of The Monthly to mainstream voters who switched to the ALP a year later. Never mind WorkChoices, or the Liberal leadership debacle, or constant interest rate rises — the punters were fooled by an obscure magazine article.
God she’s a dill.
But that’s just for starters. Albrechtsen’s real issue is to blame the financial crisis on the Democrats attempting to expand home ownership amongst low-income earners. She adds that to what she sees as a “populist” tradition of governments sticking it to the banks with regulations like restrictions on early-exit fees.
Let’s put aside for a moment the fact that early-exit fees are an anti-competitive rort entirely unrelated to the “cost” of borrowing long-term money.
The argument is nonsensical, particularly in relation to the alleged role of Fannie Mae and Freddie Mac. It was comprehensively demolished earlier this week in the Wall Street Journal. In particular, the alleged importance of the Community Reinvestment Act — a Carter-era law bolstered by Clinton in his first term — is wildly overstated. The CRA had minimal enforcement provisions. All it did was threaten US banks that if they failed to meet certain benchmarks repeatedly in lending to low-income earners, that might be considered if they ever applied to merge with another bank.
The CRA was also aimed at increasing lending for minority-owned small businesses, but no one seems to have complained about inappropriate business lending, only lending for African-Americans and Hispanics to get a roof over their head.
What conservatives can’t point to, ultimately, is any form of regulation that actually caused the crisis. No one put a gun to the head of US bank executives and made them lend to people without the means to repay loans. No one threatened dire retribution to investment bankers unless they packaged sub-prime securities. And no one compelled Standard and Poor’s and Moody’s to inexplicably and wholly irresponsibly rate those securities at AAA levels even when they didn’t understand the packaging mechanisms being used.
But what this is really about is the sort of standard conservative goal-post shifting that occurs whenever they start losing a debate. The idea of encouraging home ownership amongst low-income earners is a long-standing conceit of the Right, and particularly of Margaret Thatcher. It was part of the conservative dream of a shareholding democracy, in which everyone can be happy if only they’d shut up, work hard, consume merrily and enjoy being a tiny cog in the giant capitalist machine.
But come the time when the idea, taken up by the Democrats, turned out inevitably to have a downside — that not everyone can afford to own a home (and that, inconveniently, governments must provide some other mechanisms for ensuring low-income families can find somewhere to live) — it’s dropped like a hot CDO by conservatives, and becomes yet another excuse to attack the softness and social engineering of the Left.
It’s shameless and completely lacking in any intellectual rigour. But we’re used to that from the likes of Albrechtsen.
It looks like a certain very childish Crikey commentator is finally being ignored by other commentators….and about time too.
Hey Bernald, I have posted a link to a former columnist from Crickey who today in The Australian wrote that it was
“US financial institutions were encouraged to make loans to people who should not have got them under threats of fines for discrimination.
Freddie Mac and Fannie Mae were pressured by Democrats in Congress to take on billions of dollars of securities backed by sub-prime loans. Wall Street simply responded to this bit of social engineering by creating products. Things went bad.”
I wonder do you think that Christian Kerr is “….shameless and completely lacking in any intellectual rigour”
http://www.theaustralian.news.com.au/story/0,25197,24468260-7583,00.html
Albrechtsen and Piers really just write to a formula don’t they ?. They simply take any issue and approach it from a right wing angle. I regularly scan their headline or first paragraph and instantly know what they will be saying. It saves a lot of time and every now and then you can read one of their rants and will be proven completely correct. Perhaps it’s just written into their contracts that they must take that stance. I therefore put myself forward-even though I don’t believe a word of the stuff they write-as someone who could fill the post if either becomes ill or the job becomes vacant. I’d gladly churn out this right wing stuff for cash-no worries.
JamesK would be surely be suitable as well and could be a threat to my canditure as he believes in this nonsense and could be a step ahead of me.
These nutters really just pander to one market, preach to the converted and so on. A bigger worry is dear old Gerard and the esteemed Peter Faris QC who also believe all this tosh and appear to be reasonably intelligent blokes.
Low income Americans defaulting on their mortgages played a part in triggering the crisis, but the reason this has blown out into a systemic global financial crisis is due to the volatile and opaque nature of the $700 trillion shadow economy – financial derivatives. Warren Buffet called them out as “financial weapons of mass destruction” in one of his annual reports a few years ago and wouldn’t go near them. He knows (as should any economist) that all market economies run on boom-bust cycles, and could see that whatever triggered the next downturn would set off the waves of cascading destruction as all of the players would be forced to unwind their positions. Rudd got it right, this truly is an epic tale of greed.
Further comprehensive demolitions of the Albrechtsen blame-the-Democrats lie:
http://bigpicture.typepad.com/comments/2008/10/misunderstandin.html
http://www.slate.com/id/2201641/