Diagnosing America's Economic Stumbles, or Learning to Read the NY Times Closely

The NY Times, on 2/12/11, ran an article, titled "Limiting U.S. Efforts to Aid Home Buyers" by Binyamin Applebaum. Near the end of this news analysis, we read, "Peter J. Wallison, a conservative scholar at the American Enterprise Institute, is a leading proponent of the view that the companies (Fannie Mae and Freddie Mac) fueled the crisis by financing vast numbers of unaffordable loans. A larger number of scholars say that Freddie and Fannie chased after the bad behavior of other lenders to reclaim market share , and that their acquisition of bad loans -- while saddling taxpayers with huge losses -- was not a primary cause of the crisis."

Commentary on the root cause of the housing crisis has enriched the publishing industry. Suffice it to say a great many villains have been offered up. There's Alan Greenspan, who many feel should have seen this coming. There's the greedy bankers who saw a no-lose, risk-free opportunity to offer crappy mortgages. And, of course, there's my favorite; namely, Congress who saw a golden opportunity for doing some social engineering. But, let me be more specific. Rather than simply pointing to Congress, I'd like to point directly to Rep. Barney Frank and Sen. Chris Dodd. These men chaired the finance committees in their respective houses of Congress.

Did Chris and Barney control Freddie and Fannie? When you can appoint your buddies to high positions in such institutions, it's safe to say you control them.

But, getting back to the specifics of the NY Times analysis: the words, "A larger number of scholars (disputing Peter J. Wallison) . . . " deserve critical questioning. Who was it that counted the number of scholars on the two sides of this issue? And, if, hypothetically, Wallison is in the minority, does this establish his views as being less credible than that of those holding the opposing view? Note: The the NY Times piece does not say "a vastly larger number"; merely, "a larger number." For the NY Times, that constitutes
"fair and balanced."