Thursday, December 16, 2010

George Orwell is Alive and Well in the GOP

The 4 republicans appointed to the Financial Crisis Inquiry Committee have decided not to participate in the final report of the bipartisan committee. They wanted to ban the use of certain words from the report. One of the most important words that they wanted to ban was reference to the "shadow" banking system. That was the system that led to the failure of Lehman Bros. and Bear Stearns, and it characterized the nature of the mortgage securitization process that produced the toxic assets held by banks. They also wanted to ban "deregulation" which many believe was responsible for the risky behavior of banks. The overall purpose of the banned words is to put the blame for the crisis on the government as opposed to the private banking system. This is consistent with the GOP talking points that lay the blame on Fannie Mae and Freddie Mac which are government sponsored entities. The "Wall Street" (another banned phrase) banks captured 60% of the mortgage backed securities market but the GOP wants to exclude them from the report.

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