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MarketPlace Radio Misleads the Public on the Crisis
Stephen Henn told listeners that free market conservatives "believe" that the financial crisis is attributable to the close government relationship with Fannie Mae and Freddie Mac. Actually, it is extremely unlikely that free market conservatives actually "believe" this assertion because it is so obviously not true.
Fannie and Freddie got into subprime junk and helped fuel the housing bubble, but they were trailing the irrational exuberance of the private sector. They lost market share in the years 2002-2007, as the volume of private issue mortgage backed securities exploded.
In short, while Fannie and Freddie were completely irresponsible in their lending practices, the claim that they were responsible for the financial disaster is absurd on its face -- kind of like the claim that the earth is flat. Free market conservatives know that the claim that Fannie and Freddie were responsible is ridiculous. They just say it because they know that news outlets like Market Place will treat it as a serious proposition and thereby muddy the waters in the mind of the public.
It is bad enough that Market Place repeats such an outlandish claim without giving its listeners any background information. It should not pass along the additional misinformation that conservatives actually believe such nonsense.
--Dean Baker
COMMENTS (8)
Anyone who reads two or three blogs such as Dean's can quickly see how shallow is the economic "reporting" by MarketPlace and some others on public radio. What really makes me angry is their frequent resort to including supposedly "funny" or "lighter" stories amidst the economic wreckage. Ha, ha, ha.
Posted by: EconDumbo | September 25, 2008 9:58 AM
I used to listen to NPR all day. Now they have guests on there who are clearly out of their depth. What a shame.
I remember on Diane Rehm, nobody could explain what happens to "the money" when assets are written off. Babble for the bored.
I have never liked Marketplace.
Posted by: Erich Riesenberg | September 25, 2008 10:32 AM
That assertion is all over the place. It appears that the right is trying to use it to "prove" that the public sector was really responsible for the mess we're in. But wouldn't it be fun to be a right-winger and get to be on TV every day saying any silly, stupid thing you wanted and have people take you seriously
Posted by: PeonInChief | September 25, 2008 2:23 PM
"... it is extremely unlikely that free market conservatives actually "believe" this assertion because it is so obviously not true."
This assumes that free market conservatives, pundits and politicians, are not hopeless morons. And that is making an ass out of you and me.
The only think most free market conservatives know is that Democrats are bad, bad, bad, (many Democrats can be linked to Fannie and Freddie, although so can many Republicans) and everything follows from that, truth be damned.
Posted by: Jack | September 25, 2008 2:36 PM
But this is the spin they are giving to protect the markets. My co-workers are being told that the banks were forced to take bad loans from illegal aliens buying houses in the US by the US government. They are actually blaming this on excessive government regulations. They are calling for even LESS government regulation.
Posted by: Code Name D | September 26, 2008 12:37 AM
I have no doubt that Dean Baker is correct given the accuracy of his commentary in the past. But not being knowledgeable in this area, and not wanting to simply take his word on it, I would appreciate if someone could point me to some data that backs up his case. I am referring to these statements of course:
"Fannie and Freddie got into subprime junk and helped fuel the housing bubble, but they were trailing the irrational exuberance of the private sector. They lost market share in the years 2002-2007, as the volume of private issue mortgage backed securities exploded."
Posted by: Wilcox | September 27, 2008 3:34 PM
Oh obviously not true.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a.6kKtOoO72k&refer=home
Posted by: SSBN617 | October 4, 2008 6:00 PM
The sad thing is that although NPR may not be a good news source on economics, it's better than any of the other cable/radio I've seen/heard.
Posted by: JNW | October 10, 2008 2:59 PM