May 15, 2009

Planet Janet re-orbits and the last word on The Monthly

Guy rundle takes aim at Janet Albrechtsen, The Monthly and Melanie Phillips.

Guy Rundle — Correspondent-at-large

Guy Rundle


Planet Janet Albrechtsen was back in orbit this week, returning to the conservatives' most desperate measure -- to try and blame the current financial squelch on excessive regulation and a social policy encouraging home ownership for low income families. Pinging off an article by noted housing economist Claudio Veliz -- oh no that's right he's a humanist as much at sea in technical economics as the rest of us – Planet returned to the Tories new fetish objects, the 1977 Community Reinvestment Act (which addressed discrimination in lending), and the home ownership extension policies, to which Fannie Mae and Freddie Mac became subject. Let's deal with the CRA accusation once and for all. As the Chicago economist and Fed governor Randall Krozner noted in that lefty rag the Wall Street Journal, the proportion of toxic mortgages purchased under explicit CRA criteria and funds accounted for drum roll -- two per cent -- of the total of the bad debt that brought the system down last September. Krozer, a classical liberal and political conservative, remarks:
First, only a small portion of subprime mortgage originations are related to the CRA. Second, CRA -- related loans appear to perform comparably to other types of subprime loans. Taken together ... we believe that the available evidence runs counter to the contention that the CRA contributed in any substantive way to the current mortgage crisis.
The issue of Freddie Mac and Fannie Mae is more complex, because they were subject to the competing demands of running a private company while also responding to HUD (Housing and Urban Development) demands for active expansion of home ownership. However, the crucial move that fuelled the process was not regulation, but the removal of it -- in 2004, Fannie Mae and Freddie Mac were permitted to count subprime mortgages hitherto classed as "predatory loans" towards their quota of "extending affordable housing". Having successfully advanced affordable housing for decades without trouble, they could now simply scarf up bad mortgages on the open market, despite warnings from many that they were headed to disaster. Had regulation remained in place, the now-nationalised then-private mortgage holders might have missed their quotas, but they wouldn't have fuelled the fire. Conservatives are trying to spin a moral fable out of the GFC to counter the (at times equally fatuous) one some on the left are telling about greedy bankers etc (if greed damaged capitalism, we would all be speaking Inuit by now). They appear to succeed only in consoling themselves in their losses. Who is really to blame for the renewed threats to Israel? Melanie Phillips has the answer. It's the Jews. American Jews to be precise. Her latest hilarious rant on the "nihilist" President Obama, notes that:
Almost eighty per cent of American Jews voted for Obama despite the clear and present danger he posed to Israel. They did so because their liberal self-image was and is more important to them than the Jewish state whose existence and security cannot be allowed to jeopardise their standing with America’s elite. But the ordinary American people are a different matter. They do value and support Israel...

Hard to know what's more eye-popping about that -- the idea that Israel has to be protected from American Jews by gentiles, or the implicit argument that American Jews aren't "ordinary Americans". Isn't that kinda um the argument of, you know, the KKK?

But even weirder is her remark earlier in the piece suggesting dual loyalties:

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One thought on “Planet Janet re-orbits and the last word on The Monthly

  1. AR

    Mad Mark often gleefully told, in the Speccie, how Lord Blackheart of Coldharbour or Lord Cold of Blackheart, rescued him from obscurity of theatre reviewing (“.. to which I’ll happily return once Clinton is out of office..”) to write political polemics coz he’d done so well with “Clintons bl*wj*b jokes”. With such experience why couldn’t he become global content provider to the world, if the world were composed of uptight aemrikans.

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