False narratives

I’ve sure got better things to do here than comment on the WSJ Op-Ed pages, but I just read something there via a friend’s FB link.  It is amazing to believe that somehow conservatives are still blaming the Community Reinvestment Act for the financial crisis.  It’s one thing for the politically unaware who just watch some Fox News to not really understand how the world works, but the WSJ Editorial page seems to be a way for even otherwise intelligent conservatives to think they know what’s going on but be completely wrong.  Here’s  a sample:

There is no mystery where the Occupy Wall Street movement came from: It is an offspring of the same false narrative about the causes of the financial crisis that exculpated the government and brought us the Dodd-Frank Act. According to this story, the financial crisis and ensuing deep recession was caused by a reckless private sector driven by greed and insufficiently regulated. It is no wonder that people who hear this tale repeated endlessly in the media turn on Wall Street to express their frustration with the current conditions in the economy.

Their anger should be directed at those who developed and supported the federal government’s housing policies that were responsible for the financial crisis…

The narrative that came out of these events—largely propagated by government officials and accepted by a credulous media—was that the private sector’s greed and risk-taking caused the financial crisis and the government’s policies were not responsible. This narrative stimulated the punitive Dodd-Frank Act—fittingly named after Congress’s two key supporters of the government’s destructive housing policies. It also gave us the occupiers of Wall Street.

Thing is Wallison constructs a narrative around Fannie Mae etc., that sounds all nice and coherent, but simply paints a false picture.   If this were a sampling of the only stuff I had read about the financial crisis, I’d actually believe him.  Fortunately for me, I’ve read enough to know how breath-takingly wrong this is.  Sure, the government’s policies were far from perfect, but again to those paying attention this was overwhelmingly based on Wall Street greed, stupidity, and malfeasance.  It’s like saying the government is responsible for a fire because they left some dry wood scattered in an empty lot near your house.  Then you made a nice pile of the wood, added some accelerant, and threw in a match.  But it’s the government’s fault for the fire.

About Steve Greene
Professor of Political Science at NC State http://faculty.chass.ncsu.edu/shgreene

One Response to False narratives

  1. Well you are going to have to give some evidence of Wall Streets malfeasance and what caused the meltdown. I overwhelmingly support the notion that the liberal dictum for everyone getting a house was clearly at fault. It brought our economy down like a house of cards.

    Many sectors were pilloried because of it. The construction trade was
    decimated and the unemployment in the construction trades is now at
    78% a stat the the Obutthole administration does not want you hearing.

    The associated industries like supply houses were also decimated.

    John Wilder

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