Shuck and jive: Republicans dodge responsibility for housing market crash... by gimleteye

Florida Democrats bear their share of responsibility for grievous policy errors and wayward misdirection on behalf of big campaign contributors/lobbyists for the Growth Machine. Miami Lakes and Weston didn't spring from thin air: they did, from Everglades wetlands despite policies to protect the Everglades. Many Democrats had a hand in Florida's unsustainable development and political consequences. Democratic campaign money collectors like Mitch Berger and Chris Korge-- didn't help their candidate, Al Gore, because they, like Terry McAullife, for DNC Chairman, had their own hands in the wealth generated from unsustainable growth; Berger, as a land use attorney working for sprawling developments in South Florida, and Korge, a lobbyist and real estate developer.

But nothing that the F.O.B. did holds a candle to the damage caused by Republicans who worship at the altar of so-called "free markets" and have waged jihad against regulation; whether measures governing Wall Street finance or protections for wetlands blocking Miracle Gro Instant Maypo sprawl.

If you are a sailor, you can understand the difference through this metaphor: the Clinton/ Dick Morris strategy of tacking to the center was like hauling a sailboat 10 degrees closer to the wind.

What Republicans did who came to the White House and Tallahassee with dark suits and business school manners was put the sailboat on a reverse course, slamming the ship of state so hard downwind that that the whole contraption-- that would be the economy-- did a flying jibe, breaking all the rigging in the process.

Today, the US economy is virtually a dismasted ship.

The Miami Herald captures how it happened and its madness in an outstanding investigative series on mortgage fraud. The series does what muscular journalism should do: root out the damaging particulars and facts, scrupulously avoiding speculation. "State let crooked brokers keep working: State regulators caught mortgage professionals breaking the law but allowed them to stay in the business with few consequences, The Miami Herald found" August 10, 2008).

The proliferation of fraud, under the inattentive gaze of state regulators occurred at a time when Wall Street financial institutions were inventing new forms of debt and lobbying against federal supervision of excessive risk.

Republicans in the State Legislature, beginning with the terms of Governor Jeb Bush, were united in their zeal to suppress regulation, oversight authority, and any efforts to moderate infrastructure development with rules.

To understand the gross negligence and damage to the US economy by the Republican leaders, one has to look beyond the most often reported and visible story: how property values are crashing from 20 percent to 50 percent of peak values. The crash is having traumatic effects on consumers; and increasingly, not just subprime borrowers but the entire scale of affluence that borrowed more than they could afford because everyone else was doing it.

The loss of equity of fifty percent, staggering as it is, is peanuts compared to what the banks did: leveraging a dollar of loan value 20 or 30 times in collusion with quasi-public entities, insurance companies, rating agencies, and in the process shattering the fundamental facts of fiduciary responsibility.

So far, the Herald has declined from making these connections, and in its avoidance Miami's only daily newspaper is not alone. The mainstream media is still reticent to report how the atmosphere under which Florida House and Senate Republican leaders rejected regulations and enforcement was set from the top, by such national figures as Grover Norquist and Karl Rove, who attacked government regulation with zeal and also believed that government couldn't be fixed without creative destruction of its authority.

But it wasn't just federal regulations; state regulations were their target too. Don Saxton, Florida embattled Division of Financial Regulation chief, was only doing the bidding of his political masters, and if I had to guess: he's not taking a fall without a guaranteed golden handshake that lands him in a lucrative private industry job. But it's a bad moment to be looking for a sinecure (unless you are former House Speaker Marco Rubio and have an "in" at FIU).

The net result of the Republican shuck and jive was to enable thievery at the level where law enforcement is least capable of discovering, tracking, and prosecuting white collar crime: locally.

We are waiting for an honest accounting, after the Republican's flying jibe. For a more expanded version of this view, read my earlier post.



(Note: A jibe can be a dangerous operation in a fore-and-aft rigged boat because, as the direction of the wind crosses the boat's centerline, the "old" leeward side of the mainsail and boom suddenly becomes the new windward side, and the sails are always fully exposed to the wind. Load on the sail and mainsheet can remain high throughout the maneuver, and if uncontrolled, the boom and mainsail can swing across the deck with great force, injuring anyone standing in the path of the boom, the mainsheet or its tackle as they sweep across the boat. An uncontrolled boom slamming to the limit of its range may also put excessive stress on the rigging, and can break the boom or standing rigging, perhaps even bringing the mast down. A jibe can also result in a sudden change in the direction of heeling, which can cause unwary passengers or crew to lose their balance or even go overboard.)

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