You’ve heard of the Friedman Unit; well News Ltd has its very own Albrechtsen Unit, the length of time — usually two to three weeks — that it takes for The Australian’s thickest reactionary to recycle some right-wing drivel from foreign commentators.
For weeks right-wingers in the US have been responding to criticism of the deregulated nature of US financial markets by blaming the financial crisis on the Clinton Administration. This is a bit of a tradition amongst American conservatives — during the 1992 election campaign, Bush 41 was trying to blame America’s social ills on LBJ. In this case, they’re claiming the Clintonistas pushed banks into lending to low-income (read: minority) housing borrowers.
Albrechtsen has belatedly picked up the theme, although not without having a go at Kevin Rudd first. Rudd, says Albrechtsen, won the election last year with his “brutopia” article in 2006. Quite an impressive feat for an article far more cited than read, and written when Rudd wasn’t even Opposition Leader. Evidently it somehow spread, like a highly contagious vote-changing virus, from the tiny readership of The Monthly to mainstream voters who switched to the ALP a year later. Never mind WorkChoices, or the Liberal leadership debacle, or constant interest rate rises — the punters were fooled by an obscure magazine article.
God she’s a dill.
But that’s just for starters. Albrechtsen’s real issue is to blame the financial crisis on the Democrats attempting to expand home ownership amongst low-income earners. She adds that to what she sees as a “populist” tradition of governments sticking it to the banks with regulations like restrictions on early-exit fees.
Let’s put aside for a moment the fact that early-exit fees are an anti-competitive rort entirely unrelated to the “cost” of borrowing long-term money.
The argument is nonsensical, particularly in relation to the alleged role of Fannie Mae and Freddie Mac. It was comprehensively demolished earlier this week in the Wall Street Journal. In particular, the alleged importance of the Community Reinvestment Act — a Carter-era law bolstered by Clinton in his first term — is wildly overstated. The CRA had minimal enforcement provisions. All it did was threaten US banks that if they failed to meet certain benchmarks repeatedly in lending to low-income earners, that might be considered if they ever applied to merge with another bank.
The CRA was also aimed at increasing lending for minority-owned small businesses, but no one seems to have complained about inappropriate business lending, only lending for African-Americans and Hispanics to get a roof over their head.
What conservatives can’t point to, ultimately, is any form of regulation that actually caused the crisis. No one put a gun to the head of US bank executives and made them lend to people without the means to repay loans. No one threatened dire retribution to investment bankers unless they packaged sub-prime securities. And no one compelled Standard and Poor’s and Moody’s to inexplicably and wholly irresponsibly rate those securities at AAA levels even when they didn’t understand the packaging mechanisms being used.
But what this is really about is the sort of standard conservative goal-post shifting that occurs whenever they start losing a debate. The idea of encouraging home ownership amongst low-income earners is a long-standing conceit of the Right, and particularly of Margaret Thatcher. It was part of the conservative dream of a shareholding democracy, in which everyone can be happy if only they’d shut up, work hard, consume merrily and enjoy being a tiny cog in the giant capitalist machine.
But come the time when the idea, taken up by the Democrats, turned out inevitably to have a downside — that not everyone can afford to own a home (and that, inconveniently, governments must provide some other mechanisms for ensuring low-income families can find somewhere to live) — it’s dropped like a hot CDO by conservatives, and becomes yet another excuse to attack the softness and social engineering of the Left.
It’s shameless and completely lacking in any intellectual rigour. But we’re used to that from the likes of Albrechtsen.