Crisis (of faith) averted

A couple weeks ago, conservatives were having a crisis of faith. The economy was heading into free fall, and everyone was saying it was deregulation's fault. McCain was suspending his campaign and rushing to Washington like a crazy man, and the House Republicans were supporting a nonsense plan that knocked 10% off the retirement accounts of millions of Americans in just a few days.

For the first time in decades, conservatives were being forced to ask themselves "Could our way of looking at the world be wrong?" They were suffering enormous amounts of what psychologists call "cognitive dissonance" - that angry, lost feeling a teenager feels when he first realizes his parents are jerks. They knew, deep down in their hearts, that liberals had to be at fault for all of this mess, they just couldn't quite figure out how.

Two weeks later, conservatives are safely back in the bubble. They managed to stitch together a narrative that explains how the economic crisis is completely the fault of the same people conservatives believe are at fault for everything. This New Narrative is a rickety thing, held together by bad logic and leaps of intuition. But it's all conservatives have got right now.

The New Narrative goes something like this: liberal Democrats forced the federal government, through Fannie and Freddie, to give mortgages to blacks (and maybe Hispanics) who couldn't afford to pay those mortgages back. Voila - economic crash.

This narrative is very convenient because it blames the crisis on A) blacks, and B) liberal Democrats. Especially convenient because Barack Obama is both of those. The message went out via talk radio and Fox News, and sure enough, within a week conservatives all across the country believed this New Narrative as if it were the Gospel of Jesus. Bill O'Reilly was calling for criminal investigations of Barney Frank and Chris Dodd (Democratic legislators who deal with financial matters). Saturday Night Live came out with a skit portraying black subprime borrowers and shysty Jewish mortgage lenders as "people who deserve to be shot."

Of course, back in the real world, it's obvious that the New Narrative is 100% pure Grade A pasteurized homogenized horseshit. See Daniel Gross for the full list of reasons why, but here's a quick rundown:

1) The Community Reinvestment Act, which encourages mortgage lending to minorities, was passed in the 70s. Subprime lending began in the late 90s and took off in the 2000s.

2) Barney Frank and Chris Dodd, the men O'Reilly wants to put behind bars, had zero control over financial policymaking from 1994-2006, when all the subprime lending took place, because Republicans held all those committee chairmanships.

3) If the problem was government-forced loans to minorities, why didn't bankers recognize that these loans were trash, and treat them like toxic waste? Fannie and Freddie sure didn't force Lehman Brothers to buy billions of dollars of those mortgages.

4) In fact, Fannie and Freddie didn't get into subprime lending until 2005 (almost 30 years after the Community Reinvestment Act was passed!). And they started their subprime lending under a Republican congress.

So yes, the New Narrative of "blame the blacks and liberals" is in fact horseshit. But it accomplished its purpose - allowing conservatives to put their hands back over their ears and resume screaming "Lalalalalala, there's nothing wrong with our ideas, lalalalalala!!!" Crisis of faith averted.