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Posted at 12:45 PM ET, 12/15/2010

Perhaps Orwell would have something to say about this?

By Ezra Klein

I had to read this a couple of times to make sure I had it right:

During a private commission meeting last week, all four Republicans voted in favor of banning the phrases "Wall Street" and "shadow banking" and the words "interconnection" and "deregulation" from the panel's final report, according to a person familiar with the matter and confirmed by Brooksley E. Born, one of the six commissioners who voted against the proposal.

Whose interests are even served by this? The financial regulation bill has already passed. The country is aware that Wall Street had something to do with the financial crisis. Even Wall Street is aware that Wall Street had something to do with the financial crisis.

By Ezra Klein  | December 15, 2010; 12:45 PM ET
 
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Comments

I read elsewhere they were going to try to resurrect the old "the Community Reinvestment Act caused the bubble" bit. Easy to debunk, but does that ever stop Republicans?

Posted by: mutterc | December 15, 2010 1:06 PM | Report abuse

So much for Keith Hennessey being somewhat sane.

@Chris_Gaun
chrisgaun@gmail.com

Posted by: chrisgaun | December 15, 2010 1:11 PM | Report abuse

Those are the kinds of reasons I am no longer a Republican.

The modern GOP message is based almost totally on deception.

Posted by: lauren2010 | December 15, 2010 1:41 PM | Report abuse

"Whose interests are even served by this? The financial regulation bill has already passed. The country is aware that Wall Street had something to do with the financial crisis."

They have a lot of confidence in their propaganda machine to convince people that ice is hot and the sky is orange. And sadly this is because their big lie strategy has had all too much success in the past, aided largely by the press acting shamefully.

Posted by: RichardHSerlin | December 15, 2010 2:05 PM | Report abuse

No, Ezra. You're missing the point. Wall Street will no longer agree that they had anything to do with the crisis as soon as they read the report exculpating them from blame. Then, four years from now, we'll have to explain to people that actually, Wall Street did accept the blame when the crisis first happened. At that point, everyone in the room who watches Fox News will call us liars.

Posted by: phillycooke | December 15, 2010 2:23 PM | Report abuse

Leveraged buyouts became private equity, so why not?

Posted by: 54465446 | December 15, 2010 2:25 PM | Report abuse

You have a lot of nerve invoking Orwell. Your side would be the major target of his ire, if he were alive today. The names of legislation -- Affordable Care Act, American Reinvestment and Recovery Act, the calling of every power grab "reform" - this is all what has come to be known as Orwellian. The servility of constantly saying "Affordable Care Act" instead of the more generic healthcare reform, also resembles public discourse as described in 1984. Have you even read that book? I doubt it.

Posted by: truck1 | December 15, 2010 2:49 PM | Report abuse

Brooksley E. Born, aka The Only One Who Got It Right: http://www.pbs.org/wgbh/pages/frontline/warning/interviews/born.html

-- MrJM

Posted by: MrJM | December 15, 2010 3:53 PM | Report abuse

"War is peace

Freedom is slavery

Tax cuts are handouts to the rich"

It's all the same.

Of course, the right certainly has plenty of examples too (examples in addition to Ezra's include the PATRIOT Act and Michele Bachmann's desire to change the definition of earmarks). Neither side is worth voting for.

Posted by: justin84 | December 15, 2010 4:09 PM | Report abuse

words now banned:

~compromise
~global warming
~wall street
~shadow banking
~interconnection
~deregulation

word now accepted:

~refudiation

Posted by: jkaren | December 15, 2010 4:14 PM | Report abuse

The facts remain the facts, and history remains history. And if we've learned anything from the past two years, it's to rebut nonsense as soon as it comes out.

Fact is the CRA had nothing to do with the crash. Loans made under Clinton didn't go bad, loans made under Carter didn't go bad. Those were CRA loans. The loans that went bad were NOT CRA loans.

Fact is that regulation had everything to do with this. As the GOP points out, Andy Cuomo went pretty far in setting rules while at HUD. But this only proves that the regulators, without needing congressional approval, had all the muscle necessary to prevent the crash.

Well, GOP, Andy left in 2001, and you had 6 years to reregulate, changing those rules you disliked.
So what did you do?
-You refused to regulate subprimes.
-You refused to regulate derivatives.
-You refused to regulate securitization of mortgages.
-You increased the debt:equity ratio tripling the amount at risk.
-You pushed for even lower down payment amounts and to allow Section 8 to fund down payments (These pushed by Bushie himself in June 2002).
-You refused to let State attorneys general go after predatory lenders, delcaring the field "preempted."
-In 2004 you BRAGGED that you got Fannie & Freddie to give ever-more to low income borrowers (http://www.americandreamdownpaymentassistance.com/whdoc03152004.cfm).

A great real time summary of how subprimes and securitization were PREFERRED to the CRA was published by the libertarian Manhattan Institute in 2003. http://www.city-journal.org/html/13_2_acorns_nutty_regime.html

"The discrimination that the CRA sought to cure no longer exists, however. True, back when the now-defunct savings-and-loan industry provided most of the nation’s mortgages at rates capped by law, S&Ls often avoided lending in inner-city neighborhoods, where the risks of default were higher than usual, because they couldn’t charge increased interest to compensate them for the increased risk. But today, lenders can adjust the interest rates they charge borrowers according to the riskiness of the loan, so that they can make a profit by lending in the inner city. Today too, hundreds of individual mortgages are packaged together and sold to investors as “mortgage-backed securities,” whose overall default rate is much easier to predict than the default probability of any individual mortgage. Thanks to these innovations, the capital available to inner-city borrowers is now plentiful. As Emory University finance professor George Benston sums up: “Researchers using the best available data find very little discernible home-mortgage lending discrimination based on area, race, sex or ethnic origin.”"

So there you have it from the libertarian right:
subprime lending made the CRA obsolete, and these great securitization packages will surely keep us all safe!!!!!!!!!!!

Now you say it's government's fault?

Please, GOP flacks: Stop your lying.

Posted by: Paul521 | December 15, 2010 7:10 PM | Report abuse

It was going to be very interesting to see how Wallison's determination to get Fannie and Freddie was going to be in a report they could all agree on. Now we see that it is not going to be. After giving this commission months of my life, I am sorry to see that they will fail in even producing one report.

Posted by: 4jkb4ia | December 15, 2010 9:49 PM | Report abuse

"Please, GOP flacks: Stop your lying.
Posted by: Paul521"

An existential contradiction.

Posted by: brucds | December 15, 2010 10:10 PM | Report abuse


The money that you save by refinancing every month can be sensibly used to repay your unique loan or to upsurge your savings. Do not forget to search online for "123 Mortgage Refinance" they found 3.17% rate for me.

Posted by: brettroby | December 16, 2010 1:49 AM | Report abuse

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