Follow Up on the 'CRA Led to the Mortgage Meltdown' Myth

Bear with me if I get a little like a dog chewing on a bone about this subject, but if I had a craw one of the things that would stick in it would be the 'CRA led to the mortgage meltdown' nonsense that was the subject of one of last week's posts. Although this theory has been disproved eight ways to Sunday, there are still a few who hang on to it. One of those misguided souls being Ms. Sparkle at the Chronicle.

When, after writing on this subject last week, she was questioned by commenters about sources to back up these allegations, two were cited, both taken from the Wall Street Journal op-ed pages, both written by Peter Wallison, a senior fellow at the American Enterprise Institute. When challenged on the objectivity, or lack thereof, of the WSJ Opinion section and conservative think tanks like AEI, the response was "Sorry, but they are the ones with the facts," and that "just because they are conservative doesn't make them wrong."

As they say in the NFL, upon further review here's a little more info on Peter Wallison, truth, and facts. Along with his work at AEI, Mr. Wallison was also a member of the Financial Crisis Inquiry Commission. In July the House Committee on Oversight and Government Reform released a report entitled "An Examination of Attacks Against the Financial Crisis Inquiry Commission." That report contained the following, from Mike Konczal at Rortybomb:

"...on November 3, 2010, the day after the mid-term congressional elections in
which Republicans took control of the House, Republican Commissioner Peter Wallison emailed Republican Commissioner Douglas Holtz-Eakin: "It's very important, I think, that what we say in our separate statements not undermine the ability of the new House GOP to modify or repeal Dodd-Frank."

The next day, he sent a similar e-mail to Vice Chairman Thomas, attaching an article
entitled "GOP Pledges Major Changes to Dodd-Frank, Fannie and Freddie, CFPB." He wrote:

"Garrett [Rep. Scott Garrett] has also suggested in the past a complete repeal of Dodd-Frank. This effort should not be undermined. That law will suppress economic growth because it was based on the idea that more regulation was necessary. Boehner also said yesterday that changing this law was a priority."

Think about this. Wallison is putting pressure on his fellow Republican members to write their FCIC report to serve the political ends of the Republican party and its backers in their legislative quests.  Not goals of the public, which we as taxpayers were paying him at the level of a level IV of the Executive Schedule to do, a pretty nice pro-rated six-figure salary, and not the goals of disinterested research.  This is the person who leads the financial reform team at the American Enterprise Institute.

There's also this about AEI and truth, from Barry Ritholtz at The Big Picture:

"Peter Wallison, FCIC member: Before joining the financial commission, Wallison was the Co-Director of co-director of the American Enterprise Institute Financial Deregulation Project. Since the crisis occurred, the AEI changed the project's name to the more benign "program on financial policy studies." They also scrubbed Wallison's bio from any mention of the Financial Deregulation Project."

No Kathleen, just because they're conservative doesn't make them wrong. The fact that they're...well, wrong makes them wrong. The conservative part just means they're all about furthering their political agenda. Truth and facts be damned.