Dear PolitiFact Oregon: Check Out Today’s Oregonian
Chuck Sheketoff
An Open Letter to PolitiFact Oregon
November 18, 2011
Dear PolitiFact Oregon:
Please fact check a statement in today's Oregonian that wrongly places blame for "one of the greatest upheavals in American business history." The story headlined N17 action against Portland banks may start a new chapter for Occupy Portland stated:
The industry bashing comes at a time the financial sector is still trying to regain its footing after one of the greatest upheavals in American business history.
On Wall Street, some of the nation's biggest banks drove themselves to the brink of ruin selling and buying mortgage-backed securities of dubious value. At a local level, banks bet big on the housing market devoting huge shares of their loan portfolios to developers and builders.
Congress enabled it all by pushing the industry to make more mortgage loans to people of more meager financial means.
The last statement, made without attribution, has been shown repeatedly to be false. See, for example, this analysis by Media Matters and this analysis by the Center for American Progress.
No one, including The Oregonian’s news desk, should be above being fact checked by your team, especially when making claims on some of the most important political-economic developments in recent U.S. history.
I look forward to seeing the result of your investigation.
Chuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org.
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9:27 a.m.
Nov 19, '11
Yup, an absolutely false charge.
10:12 a.m.
Nov 19, '11
I'd have more sympathy for your complaint, Chuck, if the setence you complain about had said "caused" rather than "enabled" and "forced" rather tha "pushed."
Actually, Manning's article was very balanced. Of course, that's really what you're complaining about, isn't it?
6:06 p.m.
Nov 19, '11
I don't understand how injecting a widely debunked right wing talking point about the origins of the financial meltdown adds "balance."
If you mean political balance, Manning would have been on much more solid ground talking about bi-partisan support for deregulation of the financial services industry. But blaming the crisis on poor people is insidious, and Chuck's right to call this out in an otherwise decent article.
10:46 a.m.
Nov 20, '11
Dan, no one is blaming this on poor people; they were clearly victims. But the charge as Manning wrote is correct and has never been debunked.
As I indicated in my response to Chuck below, I do think the political environment that provided cover for a lot of predatory lending was created both by Congress and by the Bush White House, both of whom apparently thought housing prices would keep going up forever.
6:27 p.m.
Nov 20, '11
Jack - I don't think it's correct to say that predatory lending was created by Congress, or to suggest that predation was inherent in the attempts to end discrimination in lending.
I'm not trying to absolve Congress here - but it's important to understand that a great % of the loans that went bad were loans to potentially good borrowers who were steered (in many cases through misleading and fraudulent practices) into bad loans not because they were mandated to do so by Congress but because they garnered dramatically higher fees for the lenders and servicers.
In fact, the loans that were made by institutions regulated under the Community Reinvestment Act, etc. failed at markedly lower rates than those made by the non-regulated institutions.
7:29 p.m.
Nov 22, '11
Dan, if you can provide a citation for that last claim, I would LOVE to have that in my back pocket next time someone raises the "CRA made the boom/crash" argument.
1:59 p.m.
Nov 19, '11
Jack,
So your defense against pushing someone off a bridge would be "I didn't force him" and your defense against providing alcohol to a minor would be "I didn't force the minor to take the alcohol from me?"
Interesting logic and a your question is another example of you changing the subject and avoiding the issue -- the article leaves the reader to believe that fault lies with Congress not Wall Street, and you are apparently comfortable with that.
10:39 a.m.
Nov 20, '11
That's simply not true, Chuck. I've never bought into the charge that either the housing boom or bust was caused by Washington's efforts (by both Congress and the Bus White House, by the way) to encourage home ownership by people who ordinarily couldn't afford to buy.
Nonetheless, I think those efforts did contribute to an environment in which both well-meaning and unscrupulous lenders believed it was safe to make loans that would only work if housing prices continued on their upward spiral.
That view has never been "debunked" and largely hasn't even been addressed. In fact, it is the so-called "debunkers" who have argued that, since the CRA didn't apply to most of the lending institutions that made these bad loans and therefore weren't "forced" to make them, Congress and the White House have no culpabilityu for creating an environment which, at a minimum, provided cover for the people who made those loans and made doing so politically difficult to criticize until the bottom starting falling out.
Hence, Manning's use of the word "enabled" which I believe is blameworthy, and by your post it seems you should, too.
6:31 p.m.
Nov 20, '11
OK, now I see where you're going with this, Jack. I think we may well largely agree, and are quibbling over "enabled."
8:23 a.m.
Nov 21, '11
While we can certainly look back, in 20-20 hindsight, and complain about lax regulation, borrowers (adults, not minors, incidentally) actually borrowed and spent money, and did so voluntarily. In other words, it's not like anyone is claiming that the borrowers didn't borrow, only that they were allowed to borrow when many could obviously not repay the loan (unless, of course, real estate prices escalated forever).
9:06 p.m.
Nov 19, '11
This is one of those cases where one is entitled to their own opinions but not their own facts. Specifically, Chuck's observations are closer to what is known to be factual. By 2004, the FBI had sufficient information to begin prosecution of what are called "Liar Loans". Within the last few days the attorney general of Nevada has begun prosecutions against some mid-level criminals engaged in fraud.
Look. Read a book by William Black which is entitled "The Best Way to Rob a Bank is to Own One." The attorney general under GW Bush did not follow the law and now under Obama a similar weak, no lawless, approach has prevailed.
Bill Ryan how many were found to have committed crimes during the SNL scandal which cost one hundred fifty billion? Since the repeal of Glass-Steagall and the creation of a giant casino the costs are in the trillions. Obama has failed on this one folks. Get a grip. Demand that your elected representatives fix this or mark my word it is the end of the Republic.