Wednesday, February 25, 2009

A Nice Try

Mickey, having largely avoided the topic for most of the past five months, once again tries to pinpoint the cause of the financial collapse in the course of picking apart Obama's quasi-SOTU:

The people who helped produce the collapse--e.g. Jim Johnson, plus whoever had the bright idea of securitizing risky mortgages and insuring everything through AIG--are more to blame than governments that failed to invest in wind power.

Jim Johnson was head of Fannie Mae from 1991-1998, and was involved in an improper accounting scandal during that period. More recently, he received favorable loans from Angelo Mozilo, CEO of Countrywide Financial and erstwhile cartoon villain.

So: (1) Johnson is a Tom Daschle-esque Washington whore, cashing in on his connections; (2) he was involved in the idiotic '90s practice of using reserves to smooth out volatility in earnings statements; and, most importantly here, (3) he used to run a prominent Kausfiles anger object.

To be sure, (1) and (2) establish Johnson as a scoundrel. But, uh ... "helped produce the collapse"? Isn't that a little much?

Ah, but Mickey -- once again! -- is rolling out the ol' "let's blame poor homeowners" strategy. Johnson is a player in this drama by virtue of being connected to Fannie Mae, and right-wingers blame Fannie Mae (and liberals, naturally) for the whole crisis.

As the theory goes, Fannie and the liberals forced lenders to make irresponsible mortgages to low-income borrowers, and then presumably compelled lenders to reward predatory lending practices to procure these mortgages and profit handsomely from packaging the loans and selling them to financial institutions who were themselves forced (by Freddie Mac, this time) to overleverage themselves and frantically buy and sell mortgage backed securities, and meanwhile the entire shadow banking system was speculating wildly in the CDO market (because of ... ACORN?) and then Barney Frank made them tie the whole enterprise up in a completely deregulated derivatives market created by ... uh ... Michael Moore? ... Nancy Pelosi? ... let's go with Hillary Clinton here, and by the time everyone realized that housing prices weren't going to go up forever, Barack Obama came along advocating the theories of noted Marxist John Maynard Keynes and the entire stock market crashed, from fear. (This is the subtitle of Amity Shlaes next book, btw).

Sure, Johnson doesn't quite fit the narrative -- Fannie Mae relaxed its standards for guaranteeing loans in 1999, *after* Johnson's tenure, and it's kind of implausible to connect Johnson's reduced-rate loans to the collapse of the entire U.S. housing market -- but when have actual facts deterred Mickey? Plus, laying the crisis at the feet of anti-poverty advocates fits with Mickey's theory that liberal interest groups are the root of all evil -- a thesis ("do-gooders actually do harm, suckers!") both contrarian and smugly comforting.

The more interesting part of the post is that Mickey actually acknowledges reality, however inadequately and grudgingly, with the tacked-on indictment of a few unnamed Wall Street types [Is it that hard to find the guy responsible for securitizing mortgages? -- ed. Not really. Larry Fink started it at First Boston (and pretty much everyone did it at the height of the market). He runs BlackRock now. He's even an Obama donor. Let the half-baked paranoid blogging commence!].

It's as though there's some reasonable side of Mickey trying to break through [Me? -- ed. No! Back in your cage!], but it just can't overpower Mickey's need to attack someone on his enemies' list ("Housing? Mortgages? It has to be Fannie Mae, right? Jim Johnson, I've got you now!"). I'd encourage Mickey to work on letting that side out more, but I suppose he considers his revenge-seeking side to be reasonable, too.

And besides, if he didn't spend his time kicking around Chris Bangle, Adam Nagourney, John and Elizabeth Edwards, Andrew Sullivan, the L.A. Times, Frank Rich, Jeffrey Toobin, Marc Ambinder, Nic Harcourt, Chris Lehane, Teacher's unions, Robert Reich, Markos Moulitsas, Philippe Reines, the UAW, Andy Stern, Jeffrey Goldberg, Arianna Huffington, unnamed "Money Liberals", Pinch Sulzberger, Ron Burkle, the MSM, Howell Raines, Ezra Klein, anyone promoting comprehensive immigration reform, E.J. Dionne, Kevin Drum, anyone who supports organized labor and didn't write an article bashing '70s-era liberalism, Andrew Cuomo, Bill Richardson, anyone involved with Fannie Mae gravy train, and Jon Klein ... what exactly would he have?

Oscar blogging?