Republicans Dive Deeper into Fantasy

If there is a prominent reality-based Republican officeholder, his name is Arnold Schwarenegger. Paul Krugman has evidence that there is no prominent reality-based Republican officeholder:

Fannie Freddie Phony: So I was listening to Arnold Schwarzenegger before doing the "This Weak" round table, and he was mostly making sense — except for one thing. He asserted, as a simple matter of fact, that “government created the housing bubble”, because Fannie and Freddie made all these loans to people who couldn’t afford to pay them.

This is utterly false. Fannie/Freddie did some bad things, and did, it turns out, get to some extent into subprime. But thanks to the accounting scandals, they were actually withdrawing from the market during the height of the housing bubble — the vast majority of the loans now going bad came from the private sector.

Yet it’s now clear that the phony account of the crisis — that it’s all due to Fannie, Freddie, and nasty liberals forcing poor Angelo Mozilo to make loans to Those People — is setting in as Republican orthodoxy, part of what you have to believe to be a respectable member of the party.

Comments

[Neil B]

The F-Macs were-the-major-villains story is still the dominant propaganda meme of the Right. I get it in emails from Human Events (I subscribe to just about everything so I can see what they say). Remember, to them the tactical value of the propaganda is what matters most, not "reality" in any sense.

It does surprise me when:
1. Academic "real economists" etc. (real per academic formalities ...) like the mostly execrable Walter Williams say this crap.
2. More or less responsible-seeming political figures like Arnold S. say it.

[Raghav]

Well, later on, he seems to concede that it wasn't _all_ the GSEs' fault:

STEPHANOPOULOS: Yes, but those buyers and lenders bear responsibility for that too. Don't they?

SCHWARZENEGGER: No, everyone has a responsibility. Even the lender has a responsibility. Everyone was irresponsible.

[Nietz]

Yes, he said everyone had responsibility, but he also made very clear he thought the Government CREATED the problem. I remember Clinton fighting Gramm over these conditions and the private sector DIDN'T CARE. To the banks, the low-income borrowers were the most profitable.

[christofay]

The Governator saying that the Fed Govt created the housing bubble is balanced by supposedly liberal economists saying Goldmine and the other inflation banks actually committed any economic value the past decade.

"Clinton fighting Gramm," wouldn't that would have to be Clinton fighting Phil Wendy Gramm, Summer and Rubin, did he fight his own secretaries?

Check the Michael Lewis Portfolio piece for explaining recent financial history to set the reality version of what happened, and it doesn't include math.

[Bill Lumbergh]

This is a two-pronged lie; one, that it's every Democrat's fault since Jimmy Carter, and two, that the Dems could have saved us all had they only listened to GeeDub when he was jumping up and down trying to warn us all about how Fannie was going to collapse and take us all with it.
Notice how this gets the Repug-majority congress off the hook, and completely exhonerates the "free market", which can never be at fault, because Lush Rimjob sez so.
And Faux news has run cute little video propaganda pieces that sum up and reinforce that ignorant point of view. The video ends with Barney Frank saying that Fannie wasn't in trouble or in need of more supervision circa 1995, and implying that he single-handedly stopped the GOP senate from saving us all from this financial catastrophe.
And the imbeciles swallow it as fact, just like all the other wingnut lies. And no amount of "proof" otherwise will sway them, because "you can't believe anything anyone in the liberal media says".
The GOP is officially the party of ignorant know-nothings.