Sunday, March 21, 2010

5 Myths that Deserve to Be Put to Bed


1) "The Community Reinvestment Act is what triggered the sub-prime lending collapse." Ludicrous conservative talking point meant to discredit the Democratic agenda and feed into the usual fears of the middle class that poor people are to blame for everything that goes wrong. While it's true that the CRA did lead to a government mandated easing of regulation on a particular subset of lenders (namely minorities), this deregulation barely scratched the surface of the tsunami of deregulation that followed in an attempt to provide investment infrastructure to the booming real estate market. Fannie and Freddie may have culpability for fomenting deregulation, but the CRA had little to do with it. In fact, minorities who benefited specifically from CRA loans accounted for a startlingly low percentage of the "sub-prime lenders" that led to the crash. The sub-primes were mostly regular old middle class folks trying to live like they were ballas. Deregulation allowed them to do so.

2) "The Health Care overhaul legislation WILL NOT add to the deficit." Serious legit lol at this one. I'm a firm supporter of health care reform because I've been at the mercy of our health care system before and know first hand how it can send you screaming into debt, but come on, let's be real. The proposed expansion of tax credits and the beauracracy embedded in the "exchange" system will undeniably add to the deficit. As much as Karl Rove is a blowhard, he's right about the fuzzy math in this bill.

There are a number of things that were left out to be added later and there is the very real possibility that this reform will trigger an expansion of entitlement coverage down the road. Granted, reform will save our economy a considerable amount of money and bring down health care costs as a whole, but the ability to pass a budget where revenues will equal or surpass expenditures (which is what the deficit after all is) is nearly impossible even without this mammoth legislation. It's going to cost us, but the question is is it a price worth paying? You decide.

3) "The stimulus saved or created XXX numbers of jobs." I can personally vouch for the fact that the stimulus saved my job. It also saved a bunch of jobs at my agency and throughout the human services, emergency response and education sectors. In general, if you were a public employee or an employee whose job involved some kind of service to the public, i.e. non-profit, your job was probably saved by the American Reinvestment and Recovery Act. But if you weren't, you were largely out of luck. Unemployment obviously continued to rise and gimmicks like funding summer youth employment may have led to a token rise in the retail market and hypothetically "created" jobs for people administering said programs and/or the less than ten percent who actually got hired by a company in lieu of someone else they would have hired anyway, but realistically few jobs were created.

Many companies who hired did so at a relatively consistent or slightly less depressed rate. The stimulus certainly staved off the crisis for about a year, but this year is figuring to be much worse and I know for a fact that there's going to be a lot of pink slips handed out at my job come the summer. The money just isn't there. The Fed doesn't have the political will and the city and state governments are beyond strapped. Every NYS politician I've spoken to in recent months has told us to start prioritizing because it's not a matter of what can't be cut, but what you can't live without. Hard times ahead. The stimulus worked for 2009, but it was a band-aid. Hypothetically it may have given businesses and governments enough of a breather to regroup, but signs are not looking good. Either way, we won't know for at least another 2 years.

4) "Partisan bickering in Washington is out of control." Realistically partisanship is no worse now that it's ever been despite naysayers like Eric Cantor and Evan Bayh. Any politician trying to highlight partisan bickering as their reason for stepping aside from anything should be looked at crosseyed because it's more likely they're leaving public service for the decidedly more cushy job of being a pundit or a consultant. Relatively speaking, this current incarnation of Congress is much less hostile than the group that impeached Clinton for a blow job in the 90s or other historically hostile legislatures like the one that reigned from the mid-1800s to about the 1890s. FDR's Democratic coalition treated the Republican minority like utter insignificant fleas and rammed through legislation like there was no tomorrow. In fact, the encroaching gridlock of partisanship was already a significant enough issue as early as the late 18th century for George Washington to explicitly and famously warn against it during his farewell address. Washington is no more or less divided than ever. Politicians just have a lot more avenues through which to spread their discourse with the interwebz, cable news, talk radio and successfully mobilized community organizing apparatuses (both left and right leaning).

5) "The worst is over."