Speaking of Fort Smith’s City Wire, the website reports on a talk by former Alltel CEO Scott Ford to the local Chamber of Commerce. Ford formed a coffee company that does business in Rwanda. That might at least begin to attempt to explain why he compares the Occupy movement to the genocidaires in Rwanda:
Ford compared the “We are the 99%” Occupy protest slogan to the turmoil that existed surrounding Rwanda’s 1994 genocide. There, he pointed out, was where 90% of the poorest looked upon the 10%, “who were wealthy enough to own cows,” and said “that we the 90% being the bravest people we know are so poor, and the 10% are so rich, they must be cheating. How can they be making more money than us? They’re less than us,” Ford said.
Ford continued: “And from there it went to ‘you (the 10%) are subhuman.’ Then, the political leadership and the wife of the (Rwandan) President embraced it. They gathered their children together and held seminars for how to use a machete. From that point, it went from, ‘you are subhuman’ to ‘you are cockroaches and need to be killed.’”
“In 90 days, they killed a million people by hand,” Ford said.
Well, at least City Wire reports that Ford later clarified that he doesn’t see the Occupy protests turning into a Rwandan-style genocide.
But even then he’s out there:
Bringing the comparison home, he noted the Occupy movement is “so dangerous economically that you should be putting money in other countries.” He clarified he didn’t see the Occupy movement turning to the violent extremes found in Rwanda, but that “when you start this kind of class warfare, it ends not with people doing better, but worse.”
— Jeff Madrick and Frank Partnoy give a harsh review in The New York Review of Books to Reckless Endangerment, the book by Gretchen Morgenson and Joshua Rosner that, bafflingly, blames Fannie and Freddie for the financial crisis.
The one claim that Morgenson and Rosner depend upon most for their extreme conclusions about Fannie and Freddie is especially poorly documented. Fannie, they write, started influencing the private sector in damaging ways beginning in the 1990s, when the GSEs reduced the down payments required for mortgages in order to help poorer Americans acquire housing loans. Fannie’s lower standards “set the tone for private-sector lenders across the nation.” In support, they cite two quotes from one unidentified former Fannie executive. They offer no empirical evidence, or even telling illustrations or anecdotes. A more recent paper by economist Edward Pinto offers more supposedly illustrative anecdotes about reduced down payments but remains unpersuasive. In fact, the loans guaranteed by Fannie in those years were always privately insured.
But the key point—which is largely missing from Reckless Endangerment —is that private lenders made far riskier loans than GSEs bought or guaranteed, especially during the 1990s, when subprimes issued to borrowers with low income and poor credit were relatively new. You will not read in Reckless Endangerment that the GSEs bought very few subprimes in these years. Rather than leading the way, Fannie’s market share of the low-income home buyers fell behind private industry’s far riskier lending to poorer home owners and others.
As noted, the GSEs bought very few subprimes in the 1990s. But it might especially surprise the inexpert reader to know that the GSEs did not own almost half of the “toxic mortgages” written by private companies, a remarkable exaggeration on the part of the authors. As usual, no source for the estimate is given, but it is likely based on the analysis of Pinto, who was a former Fannie official and is a colleague of Wallison’s at the American Enterprise Institute. To make the claim, Pinto radically redefined what qualified a mortgage to be subprime or an Alt-A, for which mortgage-holders were often not required to document their income, rejecting the conventional and widely accepted definitions. In his analysis, almost any mortgage held by Fannie and Freddie with modest above-average risk was categorized, to use Morgenson and Rosner’s term, as “toxic.”