I’m not going to say that the most frustrating arguments are the ones where your opponent reduces your case to its most absurd extreme.
You: I think it’d be fun to go to Burger King.
Opponent: Why do you hate McDonald’s?
You get used to arguments like this if you have junior high kids, psychotic neighbors…
…and if you’re a conservative blogger.
Penigma, writing at Penigma, kinda goes there in a piece that eventually gets around to its real point, his thesis that government regulation had NOTHING to do with the meltdown of the financial system.
I said eventually. He leads off by accusing me of sophistry, which is fine but incomplete (I got to sophistry after freshmanstry. But then I proceeded to juniorstry and seniorstry), and more or less irrelevant – because unlike so much that goes on at SITD, it’s not about me. It’s about my longtime blog associate Johnny Roosh:
JR apparently holds some sort of position in financial services, and has described himself as being a “financial planner.” We’ve asked a few times what licensure he holds (Series 7 would be pretty standard) – but he hasn’t answered.
Nor should he. It’s nobody’s business. I’ll vouch for Roosh’s credentials as a financial planner – he’s got golf clubs, even!
Now, Penigma does skirt close to a serious point, here. I’ve bagged on anonymous bloggers. But the problem is the ones that use their anonymity to take cheap, defamatory personal shots at other people while shielding themselves from consequences. There are a few of them in the Twin Cities leftyblogging community; fearless about going after other people, but queasy about their blogging affecting their day jobs. My answer has always been that nobody should write anything for which they’re not ready for the real consequences under their real name. Roosh (and First Ringer, another SITD writer who stays under the radar for vocational reasons) meet that standard. Otherwise I’d have never invited them to join SITD.
And as it happens, Roosh’s “anonymous” (but, I assure you, extant) credentials have no bearing on the issue in Penigma’s piece.
But since we’re on the subject, Penigma claims second-hand expertise on the subject at hand:
I can’t claim to be a great expert on financial services – I work in investment banking, dealing with large cash movement and the reasons for the appetite (or lack) of banks for deposits and the desires of brokers to make ‘spread revenue’ with the cash they have on hand. But, I DO work with some people who are VERY experienced in financial services, people reasonably well-known on Wall Street.
Now, Roosh’s license as a financial planner doesn’t necessarily make him an expert on macroeconomics in and of itself; being literate about economics does.
But claiming to know all sorts of well-known people on Wall Street – Republicans, no less! – is another thing altogether. So it’d be useful for Penigma to provide the names of these Wall Street sources, so that people can gauge their, and his, credibility.
Because so much of what they (via Penigma, natch) say beggars reason so completely.
I’m not sure he is properly licensed, and frequently he makes comments which belie the suspicion that he is not, for he, like our former pest troll KR, claims that it was governmental regulation which caused the recent econimic meltdown/catastrophe.
This takes us back to my first paragraph; Penigma has reduced Roosh’s argument (and mine, and King Banaian’s, and that of virtually every conservative with an interest in the issue) to an absurdly simple, and utterly misleading thesis, which Penigma helpfully reprises:
Yet, when you want to hate the government, you look for any excuse.
Never chalk up to “hate” what can be better explained by “reason”.
I don’t know a whole lot of people, outside of blog comments, who say that government regulation, alone and by itself, caused the meltdown.
But it’s a simple fact that behind each of the factors that Penigma cites that Penigma’s powerful but anonymous Wall Street friends cite for the meltdown, the hand of the Fed lurks.
2. People were overly incented to do deals – so they did bad deals when the good deals ran out.
Some of these kinds of deals were:
a. Many companies sold their bad debts off to other companies packaged up into deals with many parts, claiming they were good investments (i.e. derivatives)
And what incented companies to go for these deals?
The fact that government, via a series of initiatives during the Clinton and Bush administraitons – promised to underwrite the deals.
b. Other companies effectively sold their debt exposure (insurance against loss) telling the buyer they were good ideas to hold the risk (Credit Default Swaps).
And what was the initial impetus for these sales?
The government mandate, driven by Clinton/Bush-era legislation, for Fannie and Freddie to underwrite all this debt.
c. Still more companies bet long with what was supposed to be ‘low risk’ money – namely money market funds. When their bets failed, the underlying money fund collapsed.
Why was the money supposedly low-risk? Because the government artificially lowered the risk.
d. Still MORE companies wrote mortgages with zero income to debt requirements, or wrote HELOCs with equity percentages above 100%, or agreed upon mortgages with HUGE balloon payments that they should have had zero expectation the customer would be able to pay when the interest rate or the balloon shot up.
And why did these companies change their policies?
Because the government mandated Fannie and Freddie assume the risk!
Second – Wall Street knows it full well too. You’d be hard pressed to find anyone worth a damn actually blame CRA
Well, perhaps among Penigma’s legions of powerful-yet-anonymous Republican friends on Wall Street.
Elsewhere? Not so much.
Note to Penigma: please provide the names and credentials of anyone laughing.