I’ve said it before and I’ll say it again. Republican policies are awful.
Not just, “man, that sucks” awful, but train-wreck-in-slow-motion, spectacularly awful to the point of shaking America to her very foundations awful.
Don’t believe me? Consider:
* Republican boilerplate policies are to drastically scale back regulations in the name of helping to foster a better business climate, but as we’ve shown in other Myth Busting articles, despite these longstanding and consistent efforts, Republicans have not, historically, created any more jobs than the supposedly anti-business Dems. Not only do the R’s not bother to explain this in any way, they deny that it’s even a reality, and continue spouting their cherished myth as though it were fact.
* The Great Depression was caused by insufficient regulation (in fact, no financial crisis has EVER been caused by regulation that was too stringent. Ever. Anywhere in the history of history). The Great Recession was also caused by a lack of oversight and regulation (CDO’s went completely unregulated).
* Taken together, these two events destroyed more wealth on a global scale than both WWI and WWII combined.
That’s the republican legacy. That’s what they hope you forget when they ask you to vote for them so they can gain power and do it all over again.
Why would they do such a thing?
I have no idea. You’d have to ask them why they cling stupidly to a set of economic principles that has been shown twice now (with devastating real world consequences) to be a Very Bad Thing.
We could go on, delving into the Republican view of taxes (their pledge to unelected Grover Norquist never, under any circumstances, to raise taxes), their longstanding desire to eliminate corporate taxes, estate taxes, and capital gains taxes (none of which impacts 98% of the population of the USA at all, and all of which is designed to further concentrate wealth in the hands of a very small minority, as quickly as it is possible to do so), but that’s veering from the thing I really want to talk about today, and that is…the Great Recession of 2007.
Republicans are quick to blame the BP oil spill on Obama, because it happened on his watch (never mind that the regulatory environment had undergone 8 years of stagnation under Bush, and the Obama team was a bit busy dealing with the hundreds of thousands of jobs being shed each month thanks to the latest Republican economic disaster, but…whatever. Their claim is…it happened on ‘Bammy’s’ watch, therefore, it has to be his fault.
You should hear how they howl, though, when you try to use the same line of reasoning and lay the Great Recession at Bush’s feet (and thus, the feet of the Republicans).
Oh no! They cry! That was all Barney Frank and the evil Dems who took control of Congress in 2006!
But…as with most cherished R myths, there are a few problems with that theory.
See…the bubble started expanding in 2002, when the R’s controlled EVERYTHING. The Presidency, and both houses of Congress. A condition which held until 2006, and during which period, at any time they wanted to, the R’s could have pushed through pretty much whatever legislation they desired.
In fact, they did! (witness the tax cuts of 2001–when they first took complete control–and 2003, so clearly, despite the fact that Barney Frank is an obviously wiley, evil political mastermind in the Conservaverse narrative, he was not powerful enough to stop the tax increases.
But…that’s their story.
If you press them for details, they’ll tell you it’s all cos of changes to the CRA (Community Reinvestment Act) and the easing of standards there, to allow pretty much anybody to get a loan.
That’s what collapsed the system, see?
But again, there are more problems.
First, the CRA has been around since the seventies, and hasn’t once, in its entire history, caused so much as a ripple.
Second, CRA loans have been found to have lower default rates than traditional mortgages (both for structural reasons, and because it seems that the po folks, when given a shot at home ownership, hang onto them doggedly!)
Third, by their very nature, CRA loans would be low dollar value loans, when compared to the median loan value of the national loan portfolio (and this follows: Even with relaxed standards, CRA loans would never be for big dollar amounts)
And finally…the big torpedo for the myth, the fact that there just weren’t very many CRA loans in the national portfolio. See…CRA only applies to savings and loans.
Savings and loans only do about 25% of the mortgage business of the nation.
CRA loans constitute no more than 3% of all savings and loan mortgages (and the lowest dollar value of the total, at that).
So, in order for the conservative conspiracy to be correct, you’d have to jump through enough mental hoops to:
1) forget that the R’s had control of the Presidency and both houses of Congress for almost all of the time that the bubble was expanding (the bubble period ran from 2002-2007, and the Dems didn’t gain a majority in Congress till 2006…by that point, the bubble’s popping was inevitable).
2) Lets be generous, and say that fully HALF of the CRA loans went into default (this is hugely in favor of the conservative myth, as no evidence can be found of housing policy having ANY impact at all in our largest markets, here, here and here). you’d have to accept that a globe spanning, multi trillion dollar catastrophe was caused by (0.25*0.03*0.5) of the nation’s loan portfolio (and the lowest dollar valued loans at that. Doing the math, that works out to blaming the global crisis on 0.00375% of that nation’s loan portfolio. Yes, that’s less than four one thousandths of one percent! It’s just so tiny as to be laughable (and that’s before we point out that none of the 300+ lending institutions that imploded during the crisis were covered by CRA provisions anyway!)
Once you reach this stage, most conservatives will call you bad names and give up trying to convince you, but some few might talk about John McCain’s desperate attempts to fix things, or George Bush’s attempts (both thwarted by the Evil Barney Frank, who was strangely powerless to stop either tax cut). In any case, you can read about McCain’s “attempt” here (not that it would have done anything meaningful), and here’s what Dubya had to say about it all…