Tuesday, July 15, 2008

Big Mac Panic Attack

Peter Overby at NPR:
Fannie and Freddie have kept their profiles high because of their odd situation: They're not government agencies, but they're not regular corporations either. As government sponsored enterprises, or GSEs, they're often thought to have guarantees of federal support. It lets them get discounts when they borrow money.

To maintain that advantage and others, they hire well-placed politicos for big salaries.

A rival lobbyist once described Fannie Mae as a political organization that happened to be in the mortgage business.

Italics added.

What Overby, a very sharp reporter, is describing could be termed a "rhetorical object." This is not the guarantee of the federal government, but the appearance of that guarantee, the promise of a promise. The underlying blurry charter, history, and function of the Macs depend on the actions of a market that is constantly in need of being persuaded that something that could be true, or could just as well be illusory. Its status is constantly being contested and depends not upon a legal determination but upon the greasification of certain surprisingly august palms.

According to The Center for Investigative Reporting, the gaggle of palms, a distributed chorus of hortatory specialists, includes the likes of James A Johnson, Louis J. Freeh, Rahm Emanuel, Susan Molinari and more who work to maintain this state of affairs because upon its undecided status rests a good portion of their income as well as a considerable portion of their juice:

In the first three months of the year alone, Fannie Mae and Freddie Mac spent a combined total of about $3.5 million on lobbying and hired 42 outside firms.

If the object that undergirds so much of the housing, lending, and credit industry worldwide indeed is rhetorical in nature, rather than stable, fixed, and "guaranteed," it might be useful in public discussion to acknowledge this, rather than proceed as if the question of the Big Macs' promise were, in the reductive sense alone, rhetorical.

Update: Another take at Gifthub.

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Blogger jonhusband said...

it might be useful in public discussion to acknowledge this, rather than proceed as if the question of the Big Macs' promise were, in the reductive sense alone, rhetorical.

Well, yeah, but that's not how it works. That's too complicated and asks yer average Jane and Joe to think a bit.

7/16/2008 12:52 AM  
Blogger Tom Matrullo said...

well, it's their money...

7/16/2008 6:59 AM  
Blogger jonhusband said...

was their money ?

7/16/2008 9:18 AM  
Blogger Tom Matrullo said...

will be their money if FMs need bailout, IM needs FDIC, etc.

7/16/2008 9:35 AM  
Blogger jonhusband said...

just so's I'm clear, "their" being the hortatory specialists' gaggle of palms ?

7/16/2008 10:18 AM  
Blogger Tom Matrullo said...

ah, no, I had in mind the taxpayers who will be paying for the screwups - of course if certain Senators would have just kept it quiet, none of this would have happened, according to Rupert.

7/16/2008 10:24 AM  
Blogger jonhusband said...

ah, OK .. that's what I originally thought with the "was" amd what you addressed with the "will be" .... as in "will be what they have to fork over" given that the execs won't be handing back their salaries and the shareholders will be losing less than they might otherwise have done.

Very effective form of wealth transfer, no ?

I am somewhat surprised that no one (or few) have been writing about what things would look and feel like if Bushco et al had been able to privatize Social Security.

7/16/2008 10:47 AM  
Blogger jonhusband said...

Yeah, I understand that Schumer unfortunately told people what cards he saw ... ruined the game, for now.

7/16/2008 10:48 AM  
Blogger Tom Matrullo said...

Exploits one doesn't learn in civics. There must be special schools for economic gangsters, but they're not on any matchbook covers.

7/16/2008 10:58 AM  
Blogger jonhusband said...

I guess they're the varsity team at Shock Doctrine U ?

Naomi Klein makes the comparison(s) with the operations of the Mafia / Cosa nostra early on in the book, and then ther's always John Perkins' "Confessions of an Economic Hit Man".

Beyond all the past talk of Lakoffian framing and the influence of scots-irish historic cultural impulses, what I keep wondering about is whether the average not-too-highly-educated USian over 45 or so keeps remembering the relatively (or seemingly so) more honest 60's and 70's (before greed became good) and actually still thinks or wants to believe that the iconic Preznit and attached administration is what remains of that era (all evidence strongly to the contrary).

Seems goofy but something has to explain tolerance of two terms of gangsterism (let alone one).

7/16/2008 11:56 AM  
Blogger Tom Matrullo said...

psychotic alcoholic addiction for starters?

7/16/2008 12:21 PM  
Blogger jonhusband said...

The Shock doctrine as a homework assignment in the USian leadership development curriculum ?

It leaves a bitter aftertaste seeing all the recent events piling on, after saying for years that something like this would probably happen. No solace in being more-or-less right, but something's got to give .. or change. Let's hope it's not bigger Freedom Pens or expansion of the corrections system into a new line of business ... debtors' prisons..

7/16/2008 1:16 PM  
Blogger Phil Cubeta said...

Pump a bubble, dump at the top, take money offshore, bubble bursts, buy in cheap. Add a few subsidies for organizations you run, as with Freddie Mac and Mae, and you have a world where insiders make out like bandits, and the stupid get what they deserve. You manipulate on stock, you got to jail. You inflate and deflate an entire economy and you are a public servant

7/18/2008 7:52 PM  
Blogger Tom Matrullo said...

You're a public servant like the parents in Spy Kids are parents. It takes a certain genius to not just game the system, but to devise the system to be gamed. So many to thank.

7/19/2008 11:46 AM  
Blogger Tom Matrullo said...

Uh, didn't mean "you," there, Phil -- your comment's "you."

7/19/2008 11:48 AM  

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