Unsurprisingly our high brow NC Representative, Brad Miller, has a shill at the New York Times, one that likely thinks herself "quite adroit" in her choice of titles, In This Play, One Role Is Enough. Polifrog finds the amalgamation of the NYT, and Brad Miller just another example of a campaign of privilege and Miller elitism.
Morgenson described Miller this way:
...a Democratic representative from North Carolina who was elected to Congress in 2002, talks straight and understands how big banks can put consumers at peril.From nearly the first lines we are told by the NYT that Brad Miller is "your man" and that whatever follows is NOT HIS FAULT. Yet where was his vaunted understanding of banking and housing prior to the near depression we have been experiencing? Brad Miller's mealy mouthed answer is found later in the article:
A member of the House Financial Services Committee, Mr. Miller concedes that he did not see the financial crisis coming. But he said that several years ago he became aware that increasingly poisonous mortgages were being peddled to consumers.Are these the sentiments of a leader or just a man doing the two-step with responsibility?
The reality?
What was being peddled was not only that home ownership at any cost was a proper role for government but that home ownership through the enticement of inexpensive debt was the path to that end. The fact that the mortgage industry responded to the government's push to lend to riskier and riskier individuals seems to be lost on Brad Miller.
Has an election passed in which a politician has not uttered the terms "home ownership" or used the phrase "affordable homes"? Over the years the phrases became an election mainstay, but it wasn't just election rhetoric politicians were enticing the voters with, it was the danger of cheap debt . Being lawmakers, the politicians had tools at their disposal to make good on their campaign promises of "affordable homes", promises we still hear from Brad Miller today.
They used their influence over Fannie and Freddie Mac as qasi-public companies beholden to government to enlarge the pool of dollars available for lending. They found that they could influence Fannie and Freddie to purchase increasingly riskier loans from banks thereby freeing those same banks to make more loans. And, of course, congress could and did create laws that forced lending institutions to make loans under threat of red lining, to individuals they may have otherwise turned down as a high risk. Over time even the Federal Reserve got in on the game and lowered interest rates through the Federal Fund discount rates. The fact is that the lending industry did what they were asked to do by our leaders in DC and when the industry used nefarious methods to get the job done, government turned a blind eye. This the result of the collusion of government and industry,each with like-minded goals.
This Government intervention in housing market for the laudable goal of "home ownership" resulted in a mega bubble that, like all bubbles, popped. Although the current downturn began in the sub-prime mortgage market, it spread across a loan industry weakened with the risky debt holders forced upon it by DC. and others who stretched themselves thinly to take advantage of the "cheap home loans". Since then our country has been careening toward a near depression.
What is Brad Miller's solution now? Bolt tweaking on failed government policy.
Enter Mr. Miller’s bill, the Mortgage Servicing Conflict of Interest Elimination Act. It bars servicers of first loans they do not own from holding any other mortgages on the same property.
If you think this is a solution for anything but Brad Miller's need for electioneering before an election, Polifrog has some prime swampland in eastern NC to sell you.
Government intervention in the economy has consequences but under this congress and the leadership of Brad Miller, the buck stops everywhere but their desks. And before you buy Miller's Brooklyn Bridge built on shifting blame, ask yourself if a true leader with all of the much referenced qualifications of Brad Miller would have lead this nation into our current financial malaise.
Update:
A comment in response to the above post reposted as a comment at edcone.com from Andrew Brod took Polifrog's thoughts on Brad Miller's ineffective governance down an unexplored avenue.
Andrew Brod:
This Government intervention in housing market for the laudable goal of "home ownership"...
Redefining an era of financial-market deregulation as "government intervention" is laughable and not worthy of a frog.
Polifrog:
Deregulation and government intervention are not mutually exclusive.
Deregulation of the financial industry so that the financial institutions could more easily implement government pushed programs of "home ownership" or "affordable homes" (pick your happy feel-good terms for debt slavery) was simply a means to an end. When governance chooses to incentivize debt even the hurdles it created in the interest of economic safety (regulation) fall away.
When was the last time you heard the government say, or more importantly suggest through law, that saving rather than spending is a positive direction for our nation?
We have been living through a movement in which both parties were in agreement, a movement that was larger than simple regulation.
Spend, spend, spend, it's good for the economy, spend, spend. Debt is good because it allows more spending. Regulations inhibit spending so eliminate them. Spend, spend.This has been Keynesian Economics uncontrolled. There was a saving side to that Keynesian thing, but it was forgotten as it was of little interest to the power-hungry.
polifrog
out
