Transcript: Thom Hartmann: Thom Hartmann Breaks Down Joe Walsh's Big Fat Lie. 9 November '11
Wanna see a Congressman completely freak out? Take a look.
Joe Walsh: And it's not the private market place that created this mess. What created this mess is your government, which has demanded for years that everybody be in a home. ...
Don't blame banks and don't blame the marketplace for the mess we're in right now. I am tired of hearing that crap.
There are already mechanisms in place!
No, you know what, ‘cause this pisses me off! Too many people don’t listen! ...
You know what you got, you got Dodd-Frank, you got Dodd Frank now that’s tying everybody’s hands, you want more reform, more regulation, that's what you got. Is that what you want, more regulation? ... Is that what you want, do you want Dodd-Frank? Is that what you want?
I need more coffee. It's so freakin' easy. It's so easy.
Quiet. Quiet for a minute. Quiet for a minute! Or I’m going to ask you to leave. You need to listen.
Are you listening?
That was Tea Party Congressman from Illinois - Joe Walsh - also known as the dead-beat dad Congressman who owes more than $100,000 in child support and earns far more than that every year. Still in debt.
And he was responding to a constituent who tried to pin the blame for the financial meltdown in 2008 at the feet of Wall Street.
And besides going completely unhinged - which he claimed today was a result of not eating enough before the meeting - Joe Walsh was completely wrong.
Joe Walsh was telling - I should say screaming - the same old lie - and I use that word very carefully - that the banksters, their bought-off Republican Members of Congress, and the pundits on GOP TV - also known as Fox so-called News - have been telling for years now.
And that lie is that Wall Street wasn't responsible for the economic crash - that somehow our government - and too much regulation - was responsible for the Wall Street crash - and that poor little Wall Street, they're just a victim of misguided government policy.
Well, actually, let's let Joe explain it himself:
What created this mess is your government, which has demanded for years that everybody be in a home. And we’ve made it as easy as possible for people to be in homes. All the marketplace does is respond to what the government does.
So, Walsh isn't alone in blaming the government - here's what New York Mayor Michael Bloomberg said - a billionaire in his own right, by the way - a few weeks back:
It was not the banks that created the mortgage crisis. It was, plain and simple, Congress, who forced everybody to go and to give mortgages to people who were on the cusp....
But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody.
So it was government - in the form of Fannie Mae and Freddie Mac - that caused this mess.
Seems like a decent argument...except for the fact that it has no grounding in reality whatsoever.
Government agencies did not push people into loans they couldn't afford - banksters did.
Banksters who got nice fat bonus checks when they swindled more and more people into adjustable rate mortgages instead of safe, fixed-rate mortgages.
Banksters who didn't give a damn if the mortgages they were handing out were going to explode because they knew they were going to turn around and sell that junk mortgage off to some poor shmuck investor anyway.
Banksters who were incentivized to take enormous risks because their bonuses only depended on short-term performances - so they all figured they'd be out of the game, sipping from margaritas in Aruba - before the whole system caught fire.
So, if it wasn't Fannie and it wasn't Freddie - then it must have been the regulators, right? It must have been Democrats in Congress strangling the banks with new laws and burdensome regulations - right Joe?
Do you want to bombard them with more regulations? More government? Government screwed this problem up. You know what you got? You got Dodd-Frank. You got Dodd-Frank now that’s tying everybody’s hands. You want more reform? … more regulation? That’s what you got. John, do you want more regulation? Is that what you want? Do you want Dodd-Frank? Is that what you want?
Actually - that is what I want.
That's what most economists want - more regulation on the banks.
Regulations like Glass-Steagal - passed by Franklin Roosevelt after the last great economic crisis - Glass-Steagal that kept commercial banks and investment banks separate from each other - and prevented a major market crash for more than 50 years - for the first time in this nation's history we went that long without a crash.
It wasn't regulation that caused this mess - that's a lie!
It was DEREGULATION!
It was repealing things like Glass-Steagal in 1998.
It was deregulating derivative markets to allow banksters like Goldman Sachs to manipulate the prices of everything from food - to oil - to real estate.
It was deregulating reserve requirements - passing the "Bear Sterns exemption" - during the Bush administration, by the way - and letting five major banks go beyond the old rule of only being able to lend out 12 bucks for every one dollar in savings - instead letting banks lend 20, 30, even 40 bucks for every one dollar that they had.
And then, because there were no Glass-Steagal regulations anymore, they lent it to themselves - to their own gambling divisions - and they gambled with it on the derivatives market.
Which is why Bear Sterns - after whose name this exemption was crafted - got sold for pennies on the dollar when their bets went bad and they couldn't cover the 40-to-one margin calls.
The idea that OVER regulation caused this mess - is so far from reality - that even birthers should be laughing at the idea.
Deregulation - letting the banksters run wild - letting the so-called free market be free - that's what caused this mess - and now these free market hucksters have created this big fat lie to cover up.
And Joe Walsh is one of those liars - whether he wants to hear it or not:
Quiet for a minute. Quiet for a minute! Or I’m going to ask you to leave. You need to listen.
Maybe Walsh should spend a little more time listening - listening to the people who've actually studied the meltdown - instead of listening to his campaign contributors on Wall Street who give him lies to repeat.
That's The Big Picture.