By Roland S. Martin
All of the post-mortems on the CNBC Republican debate have focused on the sad but hilarious senior moment Gov. Rick Perry suffered when he couldn’t remember the third federal agency he wants to eliminate.
There’s no doubt that it’ll go down in history as one of the most embarrassing debate moments, but what also stood out as perplexing and stunning was the fact that all of the candidates were unwilling to hold Wall Street accountable for our nation’s deplorable economic condition.
When the issue of the housing crisis was raised, Mitt Romney and most of the others chose to unleash their rage on the consumers and the financial reform bill that was passed after the crisis hit rather than to point the finger at Wall Street’s shady practices.
“The reason we have the housing crises we have,” Romney said, “is that the federal government played too heavy a role in our markets. The federal government came in with Fannie Mae and Freddie Mac, and Barney Frank and Chris Dodd told banks they had to give loans to people who couldn’t afford to pay them back.”
See, the favorite GOP bogeyman is Fannie Mae and Freddie Mac, the government-backed housing lenders. Yet anyone with half a brain knows that those institutions brought Democrats and Republicans onto their payrolls in order to ensure that Congress would let them continue practices as usual.
During the debate, Newt Gingrich was asked about the $300,000 he was paid by Freddie Mac in 2006. He claimed the money was for “advice.” He was quick to say he did no lobbying on behalf of Freddie Mac, but we all know that Gingrich’s presence, along with other former politicians and political strategists from both parties, greatly helped the company avoid congressional scrutiny.
“And my advice as a historian — when they walked in and said to me, ‘We are now making loans to people who have no credit history and have no record of paying back anything, but that’s what the government wants us to do’ — as I said to them at the time, this is a bubble. This is insane. This is impossible,” Gingrich said.
What Gingrich and the other candidates absolutely refused to do was tell the public that one of the biggest proponents of an aggressive homeownership plan in America was President George W. Bush.
Take the time to research many of President Bush’s speeches on the economy. He often talked about the American Dream and how home ownership rates were at record levels.
So, if we are to be honest, trying to assess what led to our economic problems goes far beyond just blaming Fannie Mae and Freddie Mac. That’s called subterfuge.
It’s beyond clear that we got into this huge mess because we were too lax in holding banks accountable.
Getting rid of the Glass-Steagall Act and thus allowing commercial banks and investment banks to merge was a disaster. But not a single GOP candidate said it would be a good idea to put the provision back in place.
So what did we hear?
Cain: “You get the regulators off of the backs of the banks, like someone mentioned. Get the regulators out of the way, such that the small banks and the medium-sized banks aren’t being forced out of the business.”
Perry: “Pull back all of those regulations. Everybody on this stage understands it’s the regulatory world that is killing America.”
Romney: “The reason we have the housing crises we have is that the federal government played too heavy a role in our markets.”
Thank goodness there was some sanity coming out of the mouths of Jon Huntsman and Rep. Ron Paul, who were the only two candidates who would honestly attack the problem.
Huntsman: “With respect to the banks that are too big to fail, you know today we’ve got, as I mentioned earlier, six institutions that are equal to 60, 65 percent of our GDP — $9.4 trillion … I say we need to right-size them.”
Paul: “The banks have invested in Europe, they’ve invested in Fannie Mae and Freddie Mac and these credit default swaps. They’re in big trouble, and that is why they’re getting bailed out. And that’s why they are not allowing these mortgages to go down, and that is why we will most likely bail out Europe, which will be a real tragedy.”
This nation is in trouble because of Americans’ insatiable desire to buy what they couldn’t afford, which was made possible by the cheap credit extended to them by big business. That very same big business reaped huge profits off of high interest payments, which drove up stock prices. Investors feasted on that zoom, and it bolstered 401-Ks.
It was a cycle in which everyone benefitted in the short term, but in the long run, it screwed this nation for years to come.
In no way will I overlook the role the consumer played in the economic debacle, but the GOP candidates talk like we had too many regulations, and that’s why Wall Street lost its mind. That’s deplorable.
The problem with Dodd-Frank is that it didn’t go far enough in bringing our financial industry down to size. We continue to see risky actions driven by big bonuses as a reward. So don’t think for a second that we may not suffer another economic Armageddon.
The GOP (and some Democrats), at the behest of the banking industry’s big-money lobbyists, despise the Consumer Financial Protection Bureau and don’t want it to see the light of day.
How in the world can we trust that any of these candidates will care about the Average Joe, Jane, Jose or Jamila if he is elected president when we won’t even hold them accountable in a debate?
Roland S. Martin is an award-winning CNN analyst and author of the book “The First: President Barack Obama’s Road to the White House as Originally Reported by Roland S. Martin.” Please visit his website at RolandSMartin.com. To find out more about Roland S. Martin and read his past columns, visit the Creators Syndicate Web page at www.creators.com.
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