Newt Gingrich on The Ropes — GOP Lies About Housing Debate

Newt Gingrich On the Ropes – GOP Lies About Housing Debacle

Newt Gingrich did himself no favors in last night’s debate. He needed to score some major body blows on front-runner Mitt Romney – he did not. He barely treaded water, ending up with no more than a tie in the must-win performance. Prediction markets capture the feeling surrounding his candidacy, with the likelihood of his winning the Republican primary falling to under 7 percent (down from 30 percent less than a week ago).

Rick Santorum and Ron Paul are increasingly non-factors. Santorum heads home today, no longer bothering to campaign in the winner-take-all state of Florida that he knows he can’t win. Ron Paul isn’t really angling to win – he has his message, he’s using this bully pulpit to broadcast it, and we assume he’s enjoying himself on some level.

It could be all but over on the Republican side after Tuesday.

Just as well. Bring on the real debate, between the pasha of plutocracy on one side, and the proponent of pragmatism on the other. The contrast will be stark between Mr. Romney and President Obama. We can trust the Republican candidate to do what Republicans always do, and as they did last night, warp reality to fit their ideology of unchecked, unregulated capitalism.

When asked last night what they would do about the housing mess, all four candidates fell back on their easy ideology and the talking point they’ve created to cope with it: The government created the mess, through the vehicles of Fannie Mae and Freddie Mac.

In their lemming-like flight from reality, these four candidates – indeed, all Republicans – have re-written history for far too long. The housing debacle we are in was caused by unfettered capitalist excess, not government intervention. To reiterate: The housing crisis was created by unchecked oligarchs pushing bad loans and getting filthy rich in the process.

With increased deregulation and the consolidation of major banks, lenders no longer had to hang on to the housing loans they made. The numbers of bad loans mushroomed, with lenders realizing they could make a profit on ANY loan they made, as it could be passed up the food chain to a large investment bank. The investment bank then bundled the loans together and sold them as investment vehicles, bribing ratings agencies along the way to give the subprime loan bundles Triple A credit ratings. With no regulation going on anywhere, including the newly created investment casino-style games like CDOs and derivatives, the big players could make leveraged bets on almost any scenario, including huge bets on the decrease in value of the same mortgage investment bundles they were selling to investors.