Gov't Studies Say Progressives Were Right, Beltway Was Wrong

My newspaper column this week takes a look at three recent government reports that prove when it comes to righting our economy, progressives were right, and Beltway insiders were wrong.

Remember when progressives protested the 2005 bankruptcy bill? Remember when we said it would wreak economic havoc? And remember when Congress overwhelmingly passed it anyway? Well now a new report from the New York Federal Reserve Bank -- not exactly communists -- says that bill is playing a decisive role in the foreclosure surge that undermined our entire economy. Specifically, the bill effectively forces debtors to pay off their credit cards before making mortgage payments, thus throwing them into foreclosure. The Fed estimates that since 2005, the bankruptcy bill is directly responsible for causing 400,000 more foreclosures (32,000 per quarter) than the economy would have generated otherwise.

Remember when progressives opposed the bailout and said that while there was certainly a real economic problem at hand, Wall Street had not made the case that there was an apocalyptic credit crisis warranting a $700 billion bailout? Remember how bloviators like Doris Kearns Goodwin took to PBS to call bailout opponents "irresponsible?" Remember how almost every Establishment media voice and politician berated bailout opponents as unacceptable ideologues who didn't care about the economy? Well now a new report from the Minneapolis Federal Reserve Bank says exactly what we were saying all along: That the government lied to us, and that the hard data proved that the claims about a lending crisis were fabricated.

Finally, remember when progressives said there weren't adequate oversight controls included in the bailout legislation? And remember when politicians -- especially Democrats -- insisted that they had "fixed" the bailout and made sure it included strong safeguards? Well now a new report from the General Accountability Office agrees with progressives, saying that there's almost no oversight at all, and that huge truckloads of taxpayer cash is at risk of being stolen, bilked, or otherwise wasted.

You'll notice that other than a few scant stories about that latter report, the media has almost completely ignored these damning studies. In our country, it doesn't matter what the chattering class says and how wrong these fools are -- people like Goodwin and the like retain their media credentials and teevee platforms as supposed "experts."

But the fact remains that what we now have is crystal clear proof that the real pragmatists were progressives sounding the alarm, and the real fringe ideologues were the Beltway insiders who sneered at us for raising objections.

Maybe now, having been so utterly humiliated, these people will start listening to us.

Read the whole column here.

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UPDATE: For those interested, I forgot to include this in the original post. See here for the raw data on inter-bank lending that the Minneapolis study was based on. Pretty incredible how consistent it has been since they said there was a "crisis."

Comments

[PATina]

David... you are the man !!!!

That's what really cracks me up about these "new pragmatists"... they keep saying that want solutions... not ideologue... but in so many instances the progressives have been the ones putting forth the real solutions !!!

[bannorhill]

Progressives said we should relax the rules on income verification so more people could get into homes.

Progressives also said banks could not deny loans to low income marginal borrowers.

Progressives (Barney Frank) opposed tightening mortgage credit requirements to insure borrowers could repay their loans.

[PATina]

I guess you missed the report that said 65 % of all people given subprime mortgages actually qualified for prime mortgages? That they were "pushed" into Alt A and subprime mortgages by the bankers wanting to make more money off of higher interest rates. That many of the people who were foreclosed on (or are being foreclosed upon) only fell behind once their adjustable rate mortgages went up making their payments unaffordable. That had these borrowers been given fixed rate mortgages by the banks... we wouldn't be in this situation.

So don't blame the "progressives"... blame the greedy bankers !!!!!

[bannorhill]

That means 35% of the subprime market did not qualify for prime mortgages. Over 1/3 of the loan recipients could not afford the subprime loans when they adjusted to the real rate.

The progressives like Barney Frank passed laws REQUIRING banks to loan money to people who by previous lending standards could not pay it back. That progressive policy caused the subprime failure and started the current financial disaster.

No conservitive banker would loan money knowing over 1/3 of it would never be repaid. They only loaned it when the government required it and the government would guarantee the loans. Those progressive policies removed the risk from the conservitive bankers and created the subprime market.

[krocklin]

You have to wonder which side Barney Frank, Obama and other Democrats are on.
Aren't they progressives?
People don't use the rational part of their brain. Who besides the above said the bailout was a good idea: The Bush Administration and the biggest financial institutions themselves.
That should tell you right away it was a scam.
Bush's most brazen, greatest and last play at transferring even more wealth from the taxpayer to the Ultra Wealthy.

[PATina]

Barney Frank may be considered progressive... but I wouldn't put Obama in that category. Neither would I put MOST of the other Democrats in the progressive camp. Most of the present Dems we have in Congress are centrist and/or conservatives.

[pjburke]

Yes, David... progressives did call it in advance, in all of the situations which you cite. Progressives also knew that the delegated minions were lying. Again. Again, they waited until after August to roll the "new product' out to the country. When it became clear that they wouldn"t retain the White House, they made their move for one last massive swipe through the Treasury.

Bankrupting the country in order to make the government small enough to 'drown in a bathtub' (as Grover Norquist has often said) has been part and parcel of the BushCo, Inc. purpose since Day One. Massive tax cuts for the wealthiest, $3 trillion to BushCo-connected war profiteers for unnecessary wars, scrapping of regulatory safeguards... and then a trillion-dollar-plus unmonitored Wall Street give-away. Shoveling the money out of the Federal Treasury just as fast as their fleet of frontloaders can move. Of course it all will wreak economic havoc... that is exactly what the BushCo wrecking crew has intended to accomplish all along.

The Fawning Corporate Media is not about to start listening to us progressives, David. Facts and realities simply don't matter. Being 'right' is nice and commendable and they'll make agreeable-sounding noises about being 'committed to truth' and all of that rot, but to them what is actually _factually_ true is wholly inconsequential next to what the FCM needs people to believe instead.

Stupid is as stupid does... or by their acts you will know them.

[tbone99]

Dems voting FOR this bill;

Harry reid, Joe Biden,Max Baucus, Evan Bayh, Jeff Bingaman, Robert Byrd, Thomas Carper, Kent Conrad, Daniel Inouye, Tim Johnson, Herb Kohl, Mary Landrieu, Blanche Lincoln, Bill Nelson, Ben Nelson, Mark Pryor, Kenneth Salazar, Debbie Stabenow.
Hilary Clinton abstained.

55 Repugs ( all ) voted for it

[argyle]

Finally! I finally get to disagree with David Sirota. Bankruptcy Bill aside you are wrong on this one. The direct cash infusion was absolutely necessary and is a fundamentally good thing. Given stringent oversight by a competent Democratic administration it will be a great thing that the government finally proved its supremacy and efficacy in dealing with the economy. An important argument has been settled: There is no such thing as the market outside of the laws that define its boundaries. The law defines the market and without it the market is untenable. As such, free market solutions are best left to deciding were soap is shipped to and not national civic and economic policy. Haven't we been waiting for this realization to occur in the body politic for quite some time? If elections are run with that premise as a given for the average voter, the Republican party will be gone in a generation

[Rule Of Law]

he January 18, 2002 issue of The Weekly Standard made a case for Doris Kearns Goodwin as a plagiarist, arguing that her book, The Fitzgeralds and the Kennedys, used without attribution numerous phrases and sentences from three other books: Time to Remember, by Rose Kennedy; The Lost Prince, by Hank Searl; and Kathleen Kennedy: Her Life and Times, by Lynne McTaggart.

In a March 24, 2002, interview with the Associated Press, McTaggart said, "If somebody takes a third of somebody's book, which is what happened to me, they are lifting out the heart and guts of somebody else's individual expression."

Once this was made public " and questionable phrases from Goodwin"s book were placed in numerous newspaper and magazine articles side by side with the originals " Goodwin admitted that she had previously reached a large "private settlement" with McTaggart over the issue. She wrote in Time Magazine:

[WASanford]

As one of those who wrote e-mails, letters, and made phone calls to congresspersons and senators multiple times in an attempt to stop that crummy bail out, I just have one Question; you expect these clowns to listen to us?