Posted on December 23rd, 2008 by Gavin M.
When I scroll down the page looking at Newsbusters every day, it’s like five or six wingnut heads going “robble robble robble robble robble.” Next, my feed reader recommends Atlas Shrugs, which sounds like an irregular clattery noise and a constant wild, cigarette-timbred scream — like an adult in a high chair tumbling down the semicircular master staircase of a Long Island faux-marble mini-mansion, forever.
But back to Newsbusters, I noticed this morning that they were going “robble robble,” and felt that I should say something back.
Fox News Panelists Excoriate NYT’s ‘Mortgage Bonfire’ Hit Piece on Bush
By Clay Waters | December 23, 2008 – 10:14
The roundtable on Monday night’s Special Report with Brit Hume on FNC was not kind to the New York Times’s hit piece on Sunday’s front page that blamed President Bush and only Bush for the mortgage meltdown, ignoring the Democrats in Congress who protected the irresponsible push for more “affordable housing” by Fannie Mae and Freddie Mac (as Times Watch noted yesterday).
Nina Easton, Washington bureau chief of Fortune magazine, pronounced herself “flabbergasted when I read this story, flabbergasted….You cannot write a story about affordable housing policies and blame it on George Bush instead of the Democrats. I mean, it’s just, it’s outrageous.”
And there’s more from there, including a choice quote from our man Krauthammer. What I don’t understand, though, about all of this blame-shifting — which started in September or thereabouts, and is now matured into an advanced game of self-referential wingnut counter-counterattack — is what they intend to do when someone, at long last, forces them to explain their math.
Above: Figures in dollars
This is just a cursory, throw-it-out-there sort of thing, and there’s a lot to be checked, added and/or corrected (like the Fannie Mae/Freddie Mac figure, which reflects the bailout total), but we have here a certain bold elegance of proportion that I am confident would not fully be lost to a more rigorous analysis.
Also, ‘Clay Waters’ is a total porn name. Also, I should sort of explain the basics of credit default swaps, to whatever extent I’m smart enough to understand them, because they haven’t been well explained — with one caveat among several being that there’s more to the problem than just CDS exposure.
Imagine, let’s say, that you could take out insurance policies on things that you didn’t own, for instance on other people’s cars. If a car that you bet on gets into an accident, you get paid — while the owner gets nothing and indeed never even knows that you exist. Imagine also that you could sell these insurance policies on other people’s cars without owning any equity in them, either, and also without the knowledge of the owners, or anything like that.
Imagine further that once you bought or sold one of these insurance policies, you could turn around and trade it to someone else, who could then repackage it and trade it to someone else, etc., and so on and so forth, many times over, with everyone betting and hedging and side-betting with greater and greater exposure on other people’s cars, in Tulipomanic fashion. This market is almost completely unregulated and without standards, such that if someone sells you an insurance policy and then sells their end of the contract to someone else, who then sells it to someone else who goes bankrupt, you end up screwed, and too bad for you. Imagine roughly 60 trillion dollars** of obligations tied up in such schemes, and in schemes-upon-schemes, and who-even-knows-what.
It’s like that, except with mortgages instead of cars — and whoopsie, as no one could ever have predicted, the housing bubble collapsed, sending defaults up and real estate prices down, and making lots of sad faces.
Aah, what the hell, I can’t resist: Here’s Dr. Krapphammer:
CHARLES KRAUTHAMMER: The only surprise I had in reading this was why it took the Times so long to get around to blaming the entire collapse on George Bush. After all, they blamed everything else on Bush, I mean, from, you know, the droughts in Kansas to Hurricane Katrina. Look, the truth is that there are two realities here. One is that we set as a national goal 30 years ago expanding home ownership, especially for low-income and minorities, and it was accelerated in the Clinton administration, and the Bush administration, Bush, who defined his ideology as “compassionate,” continued it. And the other truth is that in his administration he continued but he did try to regulate the out of control Fannie and Freddie, who were really at the root of this explosion. We had Franklin Raines in 1999, the CEO at the time, boasting that they had lowered the down payment requirements and were now going to lower the interest rates paid by these lower income subprime people, which was obviously a huge risk, and it was ignored, and it led ultimately to the calamity that we’re in today.
Sure, no, let’s pass it even further down the chain. We believe that ultimately, the fault rests with the manufacturers of Tyvek and drywall, for there would be no mortgage crisis without their eager connivance at the very root of this breakdown, without their shortsighted goal of grossly expanding the number of new or renovated houses on the market, increasing real estate inflation, as it were, while flagrantly abusing the financial system by expecting it to guarantee a mortgage for any new house they felt like insulating or covering the inside walls of. No wait, we blame the contractors, or wait, no, the landscapers. No, their helpers, the little Mexican guys.
If people like this were in a truck driving off a cliff, they’d be arguing with the cliff with their big, loud talking mouths all the way over the edge, whereupon they’d argue briefly with the oncoming ground.
Merry Christmas and fappy holidays (Chappy Chanukkah and a Riiste-Tet [cf.]), and I’ll try to check in soon!
* [It’s spelled that way because it’s ‘Joyeux,’ and then there’s no ‘l’ at the end, har har urk ow pelted with sardine cans agh.]
** Not a typo.
