Why Oh Why Can't We Have a Better Press Corps? (AP Edition)
In a good world, Julie Davis and David Espo would be provided with an awful lot of employment counseling, and maybe a free box or two of Lawn Darts(TM). Outsourced to Robert Waldmann:
Robert's Stochastic Thoughts: Briefly the extreme bias of the facts overwhelmed the Associated Press's quest for Ballance. Now JULIE HIRSCHFELD DAVIS and DAVID ESPO write:
In one small sign of progress, House Republicans dispatched their second-ranking leader, Rep. Roy Blunt of Missouri, to join the talks after their objections to an emerging compromise had brought negotiations to a standstill the day before. They also demanded "serious consideration" for a plan of their own, involving less government intrusion and lower cost to the taxpayers than the $700 billion that Treasury Secretary Henry Paulson has been seeking.
So how do they know that the House Republicans' plan will cost taxpayers less ? Whjy the House Republicans said so, so it must be true. I think it is obvious that it will cost much more than the Dodd-Frank plan and create new risks for the financial system. The AP has gone back to stating completely unsupported partisan assertions as facts, so long as the partisans are Republicans who don't know anything about the issues (Matt Yglesias has the goods but the thinkprogress hamster is tired)
Alarmingly and unsurprisingly the Democrats are caving and proposing a totally crazy dog's lunch compromise "Democrats and Bush officials said the insurance proposal was acceptable as an option but not as a replacement for the administration's more sweeping approach."
One small thing that Robert misses is that the "insurance option" was already in the mix for the long term. Let's turn the mike over to Henry Paulson three weeks ago:
hp-1129: Statement by Secretary Henry M. Paulson, Jr. on Treasury and Federal Housing Finance Agency Action to Protect Financial Markets and Taxpayers: At the end of next year, the Treasury temporary authorities will expire, the GSE portfolios will begin to gradually run off, and the GSEs will begin to pay the government a fee to compensate taxpayers for the on-going support provided.... Because the GSEs are Congressionally-chartered, only Congress can address the inherent conflict of attempting to serve both shareholders and a public mission. The new Congress and the next Administration must decide what role government in general, and these entities in particular, should play in the housing market. There is a consensus today that these enterprises pose a systemic risk and they cannot continue in their current form. Government support needs to be either explicit or non-existent, and structured to resolve the conflict between public and private purposes. And policymakers must address the issue of systemic risk...
The fee that Fannie Mae and Freddie Mac must pay starting in 2010 is what the House Republicans are calling their "insurance proposal": it's money to compensate the Treasury for the guarantee the government offers to Fannie and Freddie. The idea is that not just Fannie and Freddie but other participants in the mortgage market could--or maybe, if they are too big to fail, must--pay the same fee and get the same guarantee.
This was set up last September 7.
The "insurance program" that Treasury and the congressional Democrats are agreeing to add to the Paulson plan is something that was already there--and everybody is pretending that this is a concession to the House Republicans in order to keep them (and McCain) from throwing another hissy-fit.
