Paul Krugman’s non-contradiction: In a blog post about Newt and Freddie, Paul Krugman explains the facts of life about Freddie Mac.
That said, a sad fact about American life lurks in this short presentation:
KRUGMAN (11/16/11): The thing I think people find hard to wrap their minds around is the following non-contradiction:We don’t know if people find it hard to wrap their minds around that particular non-contradiction. That said, it’s obvious that point 1 and point 2 do not contradict each other—“are not opposing statements.”
1. Freddie Mac was a deeply corrupt institution
2. Freddie and Fannie did not cause the financial crisis
These are not opposing statements. Those of us attacking the Big Lie about the financial crisis are not defending Freddie.
A second fact is obvious: As a nation, we are simply too unintelligent to process a non-contradiction like that. Simply put, a conundrum like that is far too complex for our mainstream press corps. The problem spirals from there.
At present, you are seeing the nation’s pundit-manned lynch mob running through the streets. Our pundits are very unintelligent. In particular, they have almost no ability to read elementary texts.
That can’t distinguish between the things a text really says and the stray thoughts that have run through their heads. And once they get one of their group stories going, nothing on earth can change it.
“Man [sic] is the rational animal!” From the earliest days of the west, this has been a basic tenet within our culture. But your press corps is almost impossibly stupid. They can’t read and they can’t reason; they can’t distinguish the ghosts from the facts. They chase after fame and recite preferred narratives.
A non-contradiction like the one Krugman cites is truly beyond their ken.
Our pundits have killed their targets before. Trust us—they'll do so again.
--*These are not opposing statements.*--ReplyDelete
Logically, bereft of context, they are not. But that isn't to say that they aren't true. Identifying fallacious logic does not necessarily identify a false conclusion.
In the case above, at least one of Krugman's premises is faulty.
It's very easy, for instance, to pick at the word "cause", and to substitute "substantially contribute to" to change Krugman's entire thrust.
Krugman's essential dishonesty can very often be identified by his verbal hedges, as long as one knows where to look.
Let's rephrase that first paragraph.ReplyDelete
Just because premises are not contradictory does not speak to their logical soundness. Non-contradiction does not irredeemably imply non-falseness.
Further, the essential corollary is that a set of incompetently formed premises doesn't necessarily render the conclusion erroneous, just suspect.
It's very easy, for instance, to pick at the phrase "substantially contribute to", and to substitute "be a minor part of" to change MikeSoja's entire thrust.ReplyDelete
But, like his original presentation, it's not necessary, because nothing is proved. Showing up, calling Krugman essentially dishonest and providing _nothing_ in the way of a proof or cite tells us far more about you than it does about Krugman or his argument.
Poor Mike proves that what Bob says is not confined to the press corps albeit that group is especially noticeable. The right wing punditry and their minions simply can't help their reflex action upon seeing the names of the GSEs.ReplyDelete
Every study, including the Financial commission in Congress found the attempts of conservatives in think tanks and on the committee itself to be wrong, false and blockheaded.
The GSEs did not cause the real estate bubble neither were they big players in the securitization or purchase of the instruments. Regulated institutions did not cause the bubble or originate and purchase sub-prime debt.
But the cons will always send their minions to make the claim everywhere they can - just like Mike (the good) Soldier, er Soja.
Ok so if Freddie Mac and Fannie Mae weren't corrupt would it have prevented the bubble? Isn't market stability part of why they were formed? If they did not do what was expected but instead in 2005 asked to play the game too can we hold them accountable?ReplyDelete
Both political parties were wetting their beaks in the waters. Hell they were guzzling from the faucet. When a regulator stepped forward and said it had to stop, who chose to roll the dice and why?
So let's phrase it with more specificity for Mike Soja:ReplyDelete
Absent any evidence that Fannie and Freddie (or the CRA, for that matter) are responsible for the issuance of Alt-A, sub-prime and liars' loans, and the tens of trillions of uncovered derivative bets which were placed on that paper, and the fraud which beset the entire Alt-A mortgage market (estimated to be as high as 80% of all instances--i.e., breaking laws *then* on the books), and the worldwide marketing of this designed-to-fail junk under the AAA banner (safe as Treasury bonds!), you can't reasonably assert that Fannie and Freddie caused this mess, whatever else was wrong with the way those companies were run.
Is that clear enough? Of course, if you do have proof that, in fact, Freddie and Fannie *are* in fact responsible for much or all of it, you really need to come forward and be a hero. Your contortions of logic, however, are not heroic.
--*providing _nothing_ in the way of a proof or cite*--ReplyDelete
Yeah, well, I wasn't really intending to go there, but now that you mention it...
Krugman: "Those of us attacking the Big Lie about the financial crisis"
If you follow Krugman's link to the Ritholtz piece that seeks to eSsPlOdE the alleged "Big Lie", what you'll find are short descriptions of several of the particulars of the housing debacle, like the trade in derivatives, the rise of subprime mortgages, and the ratings agencies' perfidy, but what is cleverly NOT discussed are the forces that pushed banks and mortgage dealers to relax their standards to try to hedge their holdings with the risky insurance paper. Reading Ritholtz's piece leaves on wondering why banks and underwriters would do the things they apparently did.
The fact is, avoiding the why IS the Big Lie.
Here's the why...
--*you can't reasonably assert that Fannie and Freddie caused this mess*--ReplyDelete
I don't know anyone that is asserting that, reasonably or otherwise. I mean, I'm sure someone somewhere has made the claim, but I haven't seen it from any of the people that I might give credence to. In other words, it's a straw man, sitting on Krugman's knee.
Fannie and Freddie did contribute to the house party, but that's not the same thing, and no one can reasonably assert that they didn't.
"Fannie and Freddie did contribute to the house party"ReplyDelete
Which means exactly what? Fannie and Freddie perpetrated mortgage fraud on an unprecedented basis? F&F gambled on derivatives? F&F gave AAA ratings to junk bonds? F&F loaned money to alt-l lender-banks to make liars' loans, then packaged the junk and sold it to unwitting customers?
Lots of factor CONTRIBUTED to this mess, in the same way my exhalations contribute to global warming. Are you trying to identify the real actors, or simply draw attention away from them? And this makes Krugman a liar?
"I mean, I'm sure someone somewhere has made the claim, but I haven't seen it from any of the people that I might give credence to. In other words, it's a straw man, sitting on Krugman's knee."ReplyDelete
Really, MikeSoja? The claim is common currency among Republicans -- it was the government's fault, along with all-powerful Barney Frank. And some poor people who outwitted the world's bankers and investment bankers.
But because you don't give "credence" to Republicans -- or claim not to -- Krugman has created a straw man? If MikeSoja doesn't give credence to any given source, or claims not to, that source must be a straw man?
Can't an accomplished logician like you do a little better?
--*it was the government's fault, along with all-powerful Barney Frank.*--ReplyDelete
Fannie and Freddie are a small part of "the government", so blaming "the government" isn't the same as asserting "that Fannie and Freddie caused this mess". Maybe you equate the two, but I don't, so when I say that I don't see people claiming that "Fannie and Freddie caused this mess" that doesn't mean that I don't see people claiming that "the government" was the driver of the debacle. They are two different things, but if that is what you're stuck on, I'm sorry.
--*Fannie and Freddie perpetrated mortgage fraud on an unprecedented basis?*--ReplyDelete
As early as 1994 or so they were promoting the 3% down mortgage and other "innovative" financing features, which were gradually improved upon (ie. made more risky) over the next decade. Of course, I wouldn't dream of blaming Fannie or Freddie, for they were really just co-conspirators with Clinton, Cisneros, Mozilo at Countrywide, and the folks at HUD pushing "The National Homeownership Strategy".
Did the folks at Fannie and Freddie commit the crimes that private sector lenders and bankers perpetrated? No, they just opened the door for all those people to run through.
"Did the folks at Fannie and Freddie commit the crimes that private sector lenders and bankers perpetrated? No, they just opened the door for all those people to run through."ReplyDelete
What does that even mean? All metaphors are not apt, you know.
@MikeSojo: "Fannie and Freddie are a small part of "the government", so blaming "the government" isn't the same as asserting "that Fannie and Freddie caused this mess". Maybe you equate the two, but I don't"ReplyDelete
Bro, what you think I equate is irrelevant. You claimed Krugman created a straw man, by asserting that many blame, or try to blame, F&F for the mortgage mess. What you or I believe created the mess is irrelevant to the truth of that assertion of yours.
Is there a contingent that does blame, largely or principally, F&F? Yes or no? To that end, there's a wonderful engine called google. I suggest you use it.
--*All metaphors are not apt, you know.*--ReplyDelete
I see I'm going to have to speak more slowly, around here.
Try: They aided and abetted.
--*Is there a contingent that does blame, largely or principally, F&F?*--ReplyDelete
I am not aware of a "contingent" asserting that Fannie and Freddie "caused" the financial crisis, as Krugman insinuates. Most people seem to instinctively realize that that's a simplistic view of the matter.
For the nth time, the fact that you're "not aware" of the large number of Repubs who claim F&F caused the financial crisis, or that you find the claim "simplistic", doesn't mean there aren't such people.
If you bothered to read Krugman's blog (he previously offered direct links for the F&F claim, including a phony think-tank study), or even listened to the current Repub front-runner, Newt Gingrich, you'd get some idea of who he was talking about.
But I get it now: any one or thing you're "not aware of", or a position you find "simplistic" (you evidently prefer the broader repub fantasy: anything which deflects from the real malefactors), is a "straw man" by definition.
--*the large number of Repubs who claim F&F caused the financial crisis*--ReplyDelete
Oh, lordy. How about, for starters, the Repub dissent on the recent Congressional report on the financial crisis -- folks who, hilariously, objected to using the terms "fraud" and "Wall Street" in the general report, in favor of blaming "the government", with no small nod to F&F. (BTW, this report also disposed of the claim, which they examined, that F&F were significant factors.)
Or that great sometimes Republican, now wise "centrist", billionaire, Mike Bloomberg:
"It was not the banks that created the mortgage crisis. It was, plain and simple, Congress, who forced everybody to go and give mortgages to people who were on the cusp….But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody."
I'll leave you to google the current Repub front-runner (the one who took $1.6M from F&F for his services as a "historian") and his serial absurdities yourself.
However, if you want a detailed description of claims and counter-claims about the role of F&F, start here:
and follow the links (notably here)
which will take you to a number of fellows making the claim, and others refuting it.
Of course, if you're going to insist that as long as F&F "contributed to" the crisis, it's guilty as charged, this discussion is nonsensical. The issue is over comparative importance, what's truly significant, and what isn't.
Thanks for wasting my time, bud -- I entertained the foolish notion, against my better judgment, that even if you weren't interested in the truth, you'd be silenced by evidence.
How very idiotic....
"The guy [Bloomberg] is an idiot, and a RINO in RINO pants."
Even your evasions are fascinating! Here you have a billionaire who's to the right of Ronald Reagan on economics and taxes (just like the Repub presidential field), who's in complete accord with hysterical anti-terrorism imperatives of the Repub presidential candidates, who's done everything in his power to lower his own taxes, who self-evidently thinks private money is and should be free to buy elections, who ordered the NYC police to pre-emptively arrest protesters at the 2004 Repub convention, and who like most Repubs (notwithstanding your denials) blames "government", not the finance industry, for the financial crisis, and he's still not pure enough for you, to be a "real" Republican.
It would be interesting to know what more he would have to do, to be ideologically acceptable. Denounce pot-smoking? Kiss Grover Norquist's ring? Discover Jesus? Declare himself a cured homosexual?
That's is one big tent, you've got....
David Brooks, George Will, Michelle Bachmann as well as some now debunked "studies" by right-wing think tanks, and all on the recording claiming that Fannie and Freddie caused the crisis.
Maybe you don't consider any of these sources credible or representative, in which case, where the Republicans on record denouncing the actual malefactors?
--*Here you have a billionaire who's to the right of Ronald Reagan on economics and taxes (just like the Repub presidential field)*--ReplyDelete
What has Bloomberg done respecting "economics" and taxes that would cause anyone to think him a conservative?
--*It would be interesting to know what more he would have to do, to be ideologically acceptable.*--
I think he should go find honest work and leave New Yorkers alone.
--*David Brooks, George Will, Michelle Bachmann*--ReplyDelete
Brooks is a disgrace. Will is right sometimes, and wrong others. Bachmann? Wee ooooooo.
--*where [are] the Republicans on record denouncing the actual malefactors?*--
Ah, the actual malefactors.
It's strange, isn't it? We're back at the fork in the road where we blame "Wall Street" or "The Banks" or "Capitalism" or "greed" or "unscrupulous lenders/real estate congolmerates/CDO arbitrage specialists" or we blame "The CRA" or "The National Homeownership Strategy" or "Henry Cisneros" et. al. or Fannie or Freddie or Bonney Frank or Chris Dodd or George Bush or Bill Clinton or Alan Greenspan or Socialism, but really, there is no fork, there is no real mystery.
In fact, there is a lot of crossover in there. Greed (or its half brother, best intentions) cares naught for political persuasion. Obama is known as "President Goldman Sachs". Wall Street and the banks and the mortgage industry are regulated out the wazoo by the government. Fannie and Freddie exist, though they should not. Despite the best misguided intentions of the CRA and NHS, both were (and continue to be) road maps to disaster.
Can you say whether Countrywide's Angelo Mozilo was an example of the malevolent free market, or a co-conspirator with the corrupt political establishment?
And what's to be made of the observation that Countrywide and Mozilo are gone, but we've yet to see heads on pikes up Capitol Hill way?
Do you need more than these fragments?