Appearing on Hannity to promote his latest book, America for Sale, author Jerome Corsi purported to explain the causes of the mortgage bubble by advancing a litany of falsehoods and misinformation: repeating the myth that the Community Reinvestment Act was responsible for the bubble; claiming that President Obama was tied to the housing bubble through conservative bogeyman ACORN; and falsely suggesting that Obama lowered interest rates to "zero or close to zero." Corsi has previously written falsehood-laden books about Obama and Sen. John Kerry, has claimed that Obama posted online a "false, fake birth certificate," and has a history of controversial comments about Islam, Catholicism, progressives, and other matters.
What's wrong with this? Superficially, it's easy: the CRA was not responsible for the housing bubble-rather it was non-CRA, non-bank institutions that lead the way, ACORN fought against irresponsible lending practices, both with respect to CRA- and non-CRA-based lending, and Obama's limited tangential connections with ACORN had nothing to do with ACORN's low-income-housing advocacy. These basic points have already been well established long ago--at least for those of us who have been paying attention. But to understand why this sort of constellation of lies recurs again and again, regardless of previous refutations, we need a framework of understanding at a higher of abstraction, taking note of how conservative ideology, narratives and fundamental cognitive practice commonly function. At the highest level, I suggest we need to understand five things:
(1) Conservative ideology characteristically generates narratives of blame directed at low-status outgroups, holding them responsible for all of society's ills. (Blacks, Jews, immigrants, gays, etc.) So naturally, it will blame the sorts of people ACORN is working to help.
(2) Conservative narratives routinely impute selfish motives and conspiratorial methods reflecting their own disowned common practices (or those of their elite heroes) to liberal shadow elites working in cahoots with low-status outgroups. This would be anyone who works with ACORN--even a lawyer representing them on a single case, such as Barack Obama.
(3) Conservative narratives routinely deny systemic explanations ( Kegan Levels 4 &5) for social ills, affirming the just order of the world-at least when run by conservatives (Kegan Level 3)-and blaming ills on the disordering of that world, particularly elevating the status of "undesireables" (those whose enduring dispositions at Kegan Level 2 mark them as essentially evil or at lest inferior).
(4) Causation is associational--Shawn Rosenberg's "sequential reasoning"--things follow an identified pattern, the pattern is the explanation, rather than "linear" (one cause->one effect) or systematic (multiple causes and effects, including potentially circular causality). Such "reasoning" is immune to logical, empirical or rational refutation, since it has no consistent foundations, but only, at best, the outward appearance of them. Furthermore, the patterns are mutable, and can be changed at the drop of a hat.
(5) The deep background of such "reasoning" includes a combination of the "Bullshit Epistemoloy" (that there is no objective truth, the only truth is fidelity to one's "true self"), and collective narcissism which implicitly celebrates conservative identity. This combination reinforces and synergizes with the characteristic of associational reasoning to fundamentally resist any possibility of logical, empirical or rational refutation.
A new study by Economist Emmanuel Saez revealed this week that income inequality in the U.S. is more severe today than at any time since World War I, and the current recession is taking its heaviest toll on the worst-off members of our society. As our government rebuilds the financial sector using taxpayers' money, it's important to remember that both financiers and the government are responsible to our communities, not just bank shareholders. If we want to strengthen our country's economic foundation, we need to demand better wages for workers and an end to all kinds of predatory lending.
Saez's new data on income inequality is, as Paul Krugman put it, "truly amazing." Saez, who teaches at the University of California at Berkeley, found that the top 0.01% of U.S. earners had 6% of total U.S. wages, more than double the level in 2000. Earners in the top 10%, meanwhile, took home an astonishing 49.7% of all wages. That gap is larger now than during the Great Depression or the Gilded Age of the Roaring '20s.
"We're seeing Depression-era inequality again-only now it's slightly worse," writes Steve Benen for The Washington Monthly. Benen also notes that this level of inequality is not an inevitable consequence of a market economy: It's an extreme historical aberration. In the U.S., prosperity for much of the 20th Century was shared. But in 2007, at the economic bubble's peak, the wealthy simply got wealthier.
In that context, it is beyond absurd that the government is allowing 8-figure bonuses to be doled out by bailed out banks. Writing for Salon, Robert Reich dissects the policy implications of Citigroup's plans to pay its top executives an average of $10 million this year and award over $100 million to its top trader, a man who literally owns a castle in Germany. Citigroup was one of the most reckless U.S. banks during the housing bubble, a major subprime offender that received $45 billion in direct bailout money, as well as hundreds of billions in federal guarantees. How much is $45 billion? With the median U.S. home price at $174,100, that's the full market price of over 258,000 foreclosed homes. The company says that $10 million a head is necessary to attract and maintain top "talent," which Reich notes is a somewhat misleading term, given recent history. The problem is not just that Citigroup and other Wall Street firms are paying tons of money to a few people, it's that these people are being rewarded for the same kind of activities that got us into this mess to begin with: Risky, highly leveraged securities trading.
"Over the last several years Wall Street has exhibited a truly astonishing lack of talent," Reich says, noting that, "The Street is back to the same, relentlessly untalented tactics that made it lots of money before the meltdown-which also forced taxpayers to bail it out, caused the world economy to melt down, and tens of millions of people to lose big chunks of their life savings."
In truth, Reich argues, most large financial firms in the U.S. are much more like public utility companies than private-sector businesses. Even in good times, they depend on government guarantees and other support systems to function. In bad times, we bail them out. Instead of paying financiers tens of millions of dollars to reinforce a flawed system, Reich argues that we should impose rules that result in salaries similar to the public utilities sector, where top earners are generally restricted to 6-figure incomes.
The American Prospect features two pieces emphasizing problems in the current financial sector. Under a law known as the Community Reinvestment Act (CRA), enacted in 1977 we require banks to make loans in communities where they collect deposits. The loans have to be to dependable borrowers and they have to be relatively inexpensive. The law works very well-institutions covered by it made only a tiny fraction of the high-interest subprime loans that brought down the financial sector, as National Community Reinvestment Coalition President John Taylor notes for the Prospect. But CRA only applies to actual banks. You know, the places where you deposit your paychecks. CRA does not apply to subcompanies owned by the same corporation, and it does not apply to giant Wall Street securities firms like Bear Stearns and Goldman Sachs. Taylor says we need to expand CRA to cover these other big players in the financial world.
Why? As Alyssa Katz details in a piece for the Prospect funded by The Nation Institute, many Wall Street firms are bidding on foreclosed properties and selling them at rip-off rates to low-income borrowers.
But as Mary Kane notes for The Washington Independent, banks have also devised several methods of making money without making a loan. By charging tremendous fees on borrowers for minor infractions, banks generate billions of dollars without producing anything of social value. One of the worst forms of abuse, Kane writes, comes in the form of overdraft fees. When you withdraw too much money from your bank account, the bank fronts you the money, and then charges you a fee for this "protection." The trick is, banks almost never tell you that this has occurred, and often play around with the timing of your charges and deposits to maximize the fees they collect. Banks are on track to collect $38.5 billion in such fees this year alone. The worst part is, the fees come from the poorest customers-rich people don't overdraw their bank accounts, because they have tons of money.
In the case of credit cards, banks routinely slap borrowers with outrageous fees and interest rate hikes when the borrowers are making payments on time. Over the years, banks have targeted younger and younger credit card customers, as Adam Waxman notes for WireTap. After years of declining wages for all but the wealthiest citizens, consumers have been turning to pricey plastic to finance basic necessities.
Sadly, corporate America does not seem very focused on helping workers establish their financial independence. The Real News talks with Richard Wolff, an economist with the New School who emphasizes that, while worker productivity has jumped in recent months, wages have not made the corresponding increases. Quarterly productivity numbers tend to jump around a lot, but the trend of not compensating workers for improved efficiency has been around for years.
In a consumer-driven economy, major problems can't be fixed by giving lots of money to a few people, especially if those few people are already rich. To support broad, meaningful economic growth, we need to tailor our policies that empower those on the lower rungs of the economic ladder. And when we bail out giant corporations with taxpayer money, we need to make sure those companies arrange their business to improve the lot of taxpayers.
As part of conservativism's campaign to avoid any blame for this mess falling on its vaunted pillars of deregulation, naked greed and bubblenomics, they have gone back to some golden oldies and are trying to blame uppity minorities for creating the mortgage crisis with all their crazy shiftless dreams of living in a house they own. This week, the National Review published an editorial on this, and another item from Mark Krikorian. Today we have Glenn noting that NR is blaming minorities for WaMu's failure. Paul previously attacked NR in a lengthy but righteous quick hit but this needs more light.
I'd just like to quote the National Review from an editorial published 1957 and remind them to think twice before opening their filthy racist sewer mouths again:
The Central question that emerges--and it is not a parliamentary question or a question that is answered by merely consulting a catalog of the rights of American citizens, born Equal is whether the White community in the South is entitle to take such measures as are necessary to prevail, politically and culturally, in areas in which it does not predominate numerically? The sobering answer is Yes--the White community is so entitled because, for the time being, it is the advanced race...
National Review believes that the South's premises are correct. If the majority wills what is socially atavistic, then to thwart the majority may be, though undemocratic, enlightened. It is more important for any community, anywhere in the world, to afirm and live by civilized standards, than to bow to the demands of the numerical majority. Sometimes it becomes impossible to assert the will of a minority, in which case it must give way, and the society will regress; sometimes the numerical minority cannot prevail except by violence: then it must determine whether the prevalence of its will is worth the terrible price of violence.
National Review, Editorial, August 24, 1957 - as quoted in p103 of Conscience of a Liberal by Paul Krugman
I was going to bold the worst parts of the second paragraph, but it's all despicable. And with the possible exception of overt statements of racism, none of this has changed. NR still believes the enlightened minority should prevail over the "atavistic" majority, and violence is an acceptable solution to make that happen.
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