Tuesday, January 12, 2010

Fannie, Freddie, and the new Red and Blue

Matt Taibbi writes for Rolling Stone and blogs at True Slant. Let me warn you up front: Taibbi has a sharp tongue and somewhat of a potty mouth. More importantly he has a brain and uses it well. Recently he has been focusing his attention on Wall Street’s and Washington’s role in the financial crisis. Last summer he wrote a blistering attack on Goldman Sachs.

In this piece, Taibbi goes after the notion that our problems lie either with Wall Street greed or with Washington socialist incompetence. Clearly it’s both, he insists, and much more. Here in Illinois columnists and political critics talk of the Springfield “combine,” the sinister cooperation by politicians of both parties to award no-bid contracts and accept payouts from businesses and lobbyists. Thus, two governors in succession—of different parties—have both been jailed or indicted for corruption.

Much the same is going on in Washington Taibbi asserts. Which party is in power has become irrelevant to Wall Street interests because both are in their pockets. Thus the 2008 TARP bailout was created and sponsored by the Republican Bush administration but then passed by Democratic majorities in Congress. The strident Red/Blue divide is actually a side-show which conveniently distracts attention from cynical bi-partisanship that works for Wall Street’s interests.

“The essentially complicit nature of the two ruling political parties was in this way covered up for decades, as the crimes of the Democrats were greedily consumed as entertainment by the Limbaugh crowd while the crimes of the Bushies became hot-selling t-shirts and bumper stickers for the Air America listenership. The abiding mutual hatred the red/blue groups shared consistently prevented any kind of collective realization about the structure of the overall scheme.”

Read, laugh, get angry--repeat.

(An explanatory note for the article: “GSEs” = government sponsored entities, e.g. Fannie Mae and Freddie Mac.)

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