What made this panic possible, after two generations of relative financial calm? The answer, clearly, was the erosion of effective financial regulation over the previous few decades.
But right-wingers refused to accept the obvious. Instead, they pushed an alternative narrative in which liberals somehow caused the crisis by forcing poor innocent bankers to lend money to people of color (they weren’t usually that explicit, but that was the clear message). This narrative was so nakedly self-serving that it’s hard to believe that anyone took it seriously; but some influential people bought it. And among those people was Michael Bloomberg.
At this point the evidence against the liberals-did-it story is overwhelming. The surge in bad loans came neither from government-sponsored agencies nor from regulated banks, but from unregulated mortgage originators. The fallout was so severe because investors believed, wrongly, that fancy financial instruments protected them from risk.
And, crucially, the housing bubble was an international phenomenon: Spain had a bigger bubble than we did, followed by a worse slump. Did U.S. liberals force Spanish banks to make bad loans?
But zombie ideas can’t be killed by evidence. Perpetrators of the liberals-did-it lie are still out there, still getting space to spread their disinformation in mainstream media.
I’m beginning to think that Caldwell’s claim about how the American judiciary has been consistently requiring the most rigorous adherence to pure racial egalitarianism since 1964 might not withstand scrutiny either!
Click the link to get more material about Bloomberg and Buttigieg going back to their 90s nostalgia file to talk about deficits, something that this late date really puts the idiocy in “useful idiot.”