Friday, February 15, 2013

More Slick Than Slick

When Marco Rubio gave the Gas and Oil Party's official rebuttal (transcript here) to the President's State of the Union message on Tuesday, he paused midway through for a swig of Poland Spring (owned by Nestle, a member of ALEC) and drew widespread derision.  The conservative Allahpundit on the conservative website Hot Air contended "If you exclude the 101 replays on Maddow’s show, you’re still at 100 replays for the day. On Fox, the clip ran an average of once every 90 minutes over 18 hours; on CNN a bit more than every 30 minutes, with Wolf Blitzer accounting for most of that; and on MSNBC, naturally, every 20 minutes."

The obsession with the water break threatened to obscure the brazen dishonesty of Rubio's message.   Recognizing the Floridian as "a slick one," the not-so-nice but insightful Steve M. finds

The difference between Rubio this year and the other legendary SotU response gaffer, Bobby Jindal in 2009, was that Jindal passed up a golden opportunity to make the round of talk shows poking fun at his much-mocked rebuttal. As I said at the time, Jindal had the chance to do what Bill Clinton did when his speech at the 1988 Democratic convention was criticized for long-windedness -- Clinton went on The Tonight Show,where Johnny Carson good-naturedly mocked the speech. We like our politicians human and affable. Clinton's political career turned out OK, wouldn't you say?

Marco Rubio is nothing if not affable. (That's why he's dangerous.) He's already shown up on Fox & Friends with a water bottle in hand. But not just Fox -- he went on Good Morning America (outreach!) and joked about the incident as well. Oh, and since he's a Republican, he tossed in a light, not-too-pious-by-heartland-swing-voter-standards reference to the Almighty, saying, "God has a funny way of reminding us we're human."

Rubio, whose political action committe now has an official Marco Rubio Water Bottle for sale, is determined to ignore the present and erase the past.  Referring to the "free enterprise system," he contended

But President Obama? He believes it's the cause of our problems. That the economic downturn happened because our government didn't tax enough, spend enough and control enough. And, therefore, as you heard tonight, his solution to virtually every problem we face is for Washington to tax more, borrow more and spend more.

This idea – that our problems were caused by a government that was too small – it's just not true. In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies.

Only a few minutes earlier, the President whom Rubio claimed believes the"solution to virtually every problem we face is for Washington to tax more, borrow more and spend more" had stated

It is our unfinished task to make sure that this government works on behalf of the many, and not just the few, that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great nation.

The American people don't expect government to solve every problem. They don't expect those of us in this chamber to agree on every issue. But they do expect us to put the nation's interests before party....

Let me repeat: Nothing I'm proposing tonight should increase our deficit by a single dime. It is not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth.

Perhaps the Florida Senator, having expected to hear an address by a Democrat, became confused when he heard principles of small government, deficit reduction, and federalism popular among Republicans before Rubio's time.  Or maybe he just made it up.  More serious, though, was Rubio's repetition of the Republican shibboleth that "a major cause of our recent downturn was a housing crisis created by reckless government policies."

Paul Krugman notes

Every piece of this revisionist history has been refuted in detail. No, the government didn’t force banks to lend to Those People; no, Fannie Mae and Freddie Mac didn’t cause the housing bubble (they were doing relatively little lending during the peak bubble years); no, government-sponsored lenders weren’t responsible for the surge in risky mortgages (private mortgage issuers accounted for the vast majority of the riskiest loans).

The idea that government, not Wall Street or anyone or anything in the private sector, precipitated the economic crash is a dangerous article of faith among Republicans, a sizeable number of Independents, and even a few Democrats and accounts for much of the conservative hysteria surrounding Dodd-Frank (itself weak tea). Further, it endangers prospects of any financial reform.   Some cite the Community Reinvestment Act by name, while others know that it just must have been government forcing banks to lend to unworthy people (which somehow never include them, their relatives, or their friends).   Recently, Mike Konczal of Wonkblog thoroughly debunked Rubio's charge that government created the housing crisis central to the economic crisis.  Even before the right-wing fantasy took hold, Robert Gordon of The American Prospect dispelled it when in 2008 he explained

CRA was enacted in 1977. The sub-prime lending at the heart of the current crisis exploded a full quarter century later. In the mid-1990s, new CRA regulations and a wave of mergers led to a flurry of CRA activity, but, as noted by the New America Foundation's Ellen Seidman (and by Harvard's Joint Center), that activity "largely came to an end by 2001." In late 2004, the Bush administration announced plans to sharply weaken CRA regulations, pulling small and mid-sized banks out from under the law's toughest standards. Yet sub-prime lending continued, and even intensified -- at the very time when activity under CRA had slowed and the law had weakened.

Second, it is hard to blame CRA for the mortgage meltdown when CRA doesn't even apply to most of the loans that are behind it. As the University of Michigan's Michael Barr points out, half of sub-prime loans came from those mortgage companies beyond the reach of CRA. A further 25 to 30 percent came from bank subsidiaries and affiliates, which come under CRA to varying degrees but not as fully as banks themselves. (With affiliates, banks can choose whether to count the loans.) Perhaps one in four sub-prime loans were made by the institutions fully governed by CRA.

Most important, the lenders subject to CRA have engaged in less, not more, of the most dangerous lending. Janet Yellen, president of the San Francisco Federal Reserve, offers the killer statistic: Independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts. With this in mind, Yellen specifically rejects the "tendency to conflate the current problems in the sub-prime market with CRA-motivated lending.? CRA, Yellen says, "has increased the volume of responsible lending to low- and moderate-income households."

 Marco Rubio starts off with a nod to his party's theocons, stating "I'm blessed to represent Florida in the United States Senate," then plays the poor boy card with "I still live in the same working-class neighborhood where I grew up." And he couldn't possibly want to hurt the elderly because "My neighbors are retirees who depend on Social Security and Medicare."  He neglected to mention that he'll be getting away from his neighbors if he gets close to the $675,000 asking price for his house.

But Rubio's ideas can cause more damage than his hypocrisy.  Krugman recognizes

For here we are, more than five years into the worst economic slump since the Great Depression, and one of our two great political parties has seen its economic doctrine crash and burn twice: first in the run-up to crisis, then again in the aftermath. Yet that party has learned nothing; it apparently believes that all will be well if it just keeps repeating the old slogans, but louder.

The party has learned nothing about policy.  But it is still learning about politics, hoping to put old wine into new bottles.  As Steve M. notes of Florida's junior senator "laugh him off at your peril"

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