Welcome to the Tea Party, Everyone
New York Times columnist David Brooks has written a devastating column on James Johnson and others at Fannie Mae who are embroiled in an undercovered scandal that has cost U.S. taxpayers $153 billion ... so far and has helped sink the American economy.
Brooks says that this scandal is also important because it involves dozens of the most respected members of the Washington establishment and they were engaged in behavior that is completely accepted these days.
What's more, the people involved in destroying the American economy are still "powerful, admired and well connected."
"The story centers around James Johnson, a Democratic sage with a raft of prestigious connections," he writes. This was the chief exec of Fannie Mae since 1991. He and others personally profited from the agency's profits (gained because the feds guaranteed its debts). They co-opted groups like Acorn, the Congressional Black Caucus, etc. Again, all normal behavior here in town. Or how about this:
Fannie ginned up Astroturf lobbying campaigns. In 2000, for example, a bill was introduced that threatened Fannie’s special status. The Coalition for Homeownership was formed and letters poured into Congressional offices opposing the bill. Many signatories of the letter had no idea their names had been used.
Fannie lavished campaign contributions on members of Congress. Time and again experts would go before some Congressional committee to warn that Fannie was lowering borrowing standards and posing an enormous risk to taxpayers. Phalanxes of congressmen would be mobilized to bludgeon the experts and kill unfriendly legislation.
Execs "ginned up" academic studies and created a foundation for public relations. They captured their own regulators. And you know what? This is all legal. Rep. Barney Frank, whose partner at the time was in on the whole racket, remains defiant when anyone questions the ethics of the whole operation.
The message of the whole scandal?
It has sent the message that we have hit the moment of demosclerosis. Washington is home to a vertiginous tangle of industry associations, activist groups, think tanks and communications shops. These forces have overwhelmed the government that was originally conceived by the founders.
Welcome to the Tea Party, everyone.
- Comment (10)
- · Quote
- · UnfollowFollow (2)
Comments :
Jan '11
Re: Welcome to the Tea Party, Everyone
A few posts down, Peter Robinson talks about David Mamet's Tragic view of life. Now this post describes the actual details. I'd say thank you, but I'm too nauseous at the moment.
Re: Welcome to the Tea Party, Everyone
Even at The New York Times, there are people (including the main author of the book that Brooks is discussing) who have figured it out. If only the Republicans would nominate someone who had digested the implications of this book, if only . . .
Oct '10
Re: Welcome to the Tea Party, Everyone
I am somewhat shocked, and pleased, that David Brooks has written this column. The fact that he even references the founders, and "the intent of the founders", is in itself a surprise.
He likes to say that the size of government does not matter. What does matter he says is whether or not a "given policy arouses energy, fosters skills, spurs social mobility and helps people transform their lives". Fannie Mae on paper and ex-ante could easily meet David Brook's test.
He says that "Washington is home to a vertiginous tangle of industry associations, activist groups, think tanks and communications shops."
David...doesn't the size and scope of government have something to do with that?
Edited on Jun 17, 2011 at 8:55amMay '10
Re: Welcome to the Tea Party, Everyone
Given that all governments are prone to rent seeking, pressure groups, and outright corruption, would it not follow that the way to reduce the breadth of these damaging groups, is to reduce the breadth and depth of all governments in our lives.
Naive I know, but why exactly is the government in the business of providing mortgages? After all, loans against property have been around for thousands of years, and are best provided by those (private industry) with an incentive to profit from them, and not for use as some form of loan to be diverted to campaign financing for members of Congress.
Edited on Jun 17, 2011 at 9:26amMay '10
Re: Welcome to the Tea Party, Everyone
Talleyrand: Given that all governments are prone to rent seeking, pressure groups, and outright corruption, would it not follow that the way to reduce the breadth of these damaging groups, is to reduce the breadth and depth of all governments in our lives.
Naive I know, but why exactly is the government in the business of providing mortgages? After all, loans against property have been around for thousands of years, and are best provided by those (private industry) with an incentive to profit from them, and not for use as some form of loan to be diverted to campaign financing for members of Congress. · Jun 17 at 9:25am
No need to be so jaded and refer to your own opinion as naive, because you're completely right — local, state, and the federal governments are all too large. That is the problem. The reciprocal is the solution.
Oct '10
Re: Welcome to the Tea Party, Everyone
Yes. 1000% yes.
(Now, reconciling this with the 'war on terror' and the international security responsibilities of the lone hyperpower is left as an exercise. But let's not shirk the hard work of shrinking the state apparatus while we work that out.)
Favourite line from the article: "Paul Krugman is off today."
Mar '11
Re: Welcome to the Tea Party, Everyone
Well, yes, better late than never - but Mr Obama got elected on the basis of all this - and his sharp crease.
Sep '10
Re: Welcome to the Tea Party, Everyone
Where was David Brooks during the '08 election? Where was he during the debates on Obamacare and the stimulus package? It is great that he has written this article, but as my old man used to say, "Even a blind hog will find an acorn every once in a while."
The question is will the press now go after Frank, Dodd, and dare I say, Obama?
Aug '10
Re: Welcome to the Tea Party, Everyone
Having Brooks tell us something that his paper assiduously avoided for the past 15 years, is like the NY Times announcing that Stalin's government may have been cruel to the Russian people , but waiting until after the second World War.
In their usual fashion, they had Robert Reich review this book on Memorial Day weekend. His review is understated to say the least, except for a snipe at Kenneth Starr, which probably isn't true.
Jun '11
Re: Welcome to the Tea Party, Everyone
Talleyrand, I agree with Cal Lawton. You are not naive. Under what circumstances should it be a government's job to promote universal home ownership? Progressives would say that you lack "compassion," a special sort of sensitivity which we on the Right could never fully understand.