Summary: Among our most serious problems is the success of well-funded engines of propaganda at manipulating public opinion, making effective public policy reforms almost impossible. Here we examine one example, convincing Americans that the government caused the housing bubble. This is a follow-up to Facts are an obstacle to the reform of America and Who should we blame for the mortgage crisis?
People become easily led once they are trained to believe appealing lies. Not just the occasional myths in the belief structure of every political movement, such as the Left’s doomster exaggerations about global warming, and their faith in the phantasm of the Social Security Trust Fund. Sometimes a movement’s leaders find that their followers have abandoned their skepticism, lost confidence in society’s experts, and become credulous about stories that confirm their biases.
It’s a national tragedy that this has happened to America’s conservatives. Their leaders investment large sums wisely and patiently, building a structure of plausible-sounding institutions to propagate well-constructed propaganda. After years of indoctrination, gradually they’ve spun increasingly wilder falsehoods. From misrepresentations about the adequacy of western europe’s healthcare to outright lies about Obama’s religion and citizenship.
So most discussions about public policy, especially economics, devolve into a debate about interlocking layers of falsehoods, exaggerations, and misrepresentations. Worse, conservative positions have become solidified — immune to facts. Obama’s citizenship is the extreme example. Here we look at another: the government’s role in the housing bubble and collapse.
Below are links to reports that examine the role of the and the 1977 Community Reinvestment Act (CRA) and Government-sponsored enterprises (GSE). I am aware of no analytical works coming to conclusions other than those shown. There are many books and articles blaming the government, mostly anecdotal in nature — and not remotely similar in depth of data and analysis to these studies. Yet to no effect, as faith-based conservatives hold to comforting stories told them by well-funded engines of disinformation.
Introduction to the subject
(1) An excellent introduction to the subject: “Did Fannie Cause the Disaster?” Frank Partnoy (Professor of Law and Finance at the U of San Diego) and Jeff Madrick, New York Review of Books, 27 October 2011
(2) One of the two most extensive studies done today: Report of the Financial Crisis Inquiry Commission, a bi-partisan inquiry, January 2011 — Excerpt: