Over time it's become clear that McArdle has little to say and scant desire for growth or reassessment. No matter what the circumstances or how wrong she's been, she does very little analysis of where she went wrong and no analysis of why she was wrong. She merely says, I Wuz Wrong, a trivial little title for a trivial little mistake of supporting the killing tens of thousands of people. Her "explanation":
Reason the First: I was not Saddam. That should have occurred to her far, far earlier than it did. McArdle does not tell us why she thought she could read minds; perhaps it never occurred to her that she couldn't. Perhaps she has spent her entire life anticipating the sudden onset of psychic powers and merely jumped the gun a little. Either way, her bad.
Reason the Second: I forgot the entire history of WWII, substituting my own imaginary scenario of WWII in my head instead. I forgot the books I read, the classes I took, the movies I saw, the newspaper articles I read, the discussions I engaged in. All of them, gone. Poof! There goes WWII, down the memory hole as if it never existed and had to be recreated from scratch. Perhaps she confused playing WWII on the computer with the real WWII, and her role-playing in Imaginary Europe with Really Real Europe. Either way, History fail.
Reason the Third: I was insufficiently empathetic enough to imagine what it would be like to be invaded by a foreign country.
We liked the French for giving us military help during the Revolution. Now imagine that France had invaded in order to liberate us from the British. Even if they really did eventually leave, this would have had much worse results. Looking back, my confidence in our liberatory powers seems terribly callous, and it doesn't really do the dead Iraqis much good that I'm sorry for it.
Did France hang George Washington? Did France shell Boston, New York and Philadelphia? Did France fire the militias and send them back home penniless? But hey, who could possibly hate an American? Or American meddling in their affairs? Besides the Saudis who flew airplanes into the World Trade Center, of course. American Exceptionalism fail.
So much for our little wars. On to her economic decisions.
She predicted the housing bubble, but since it was nearly her only correct prediction and she has said that her boss at the Economist said we were in a housing bubble, I'm going with bowing to authority instead of analytical brainpower. She said she didn't know how bad the banking and housing situation would get, but that's because she has always ignored the negative effect of securitization.
7) I believed that securitization mitigated risk by spreading it around, rather than enhancing risk by reducing transparency.
The traditional mortgage model involved a bank originating a loan to the borrower/homeowner and retaining the credit (default) risk. With the advent of securitization, the traditional model has given way to the "originate to distribute" model, in which banks essentially sell the mortgages and distribute credit risk to investors through mortgage-backed securities. Securitization meant that those issuing mortgages were no longer required to hold them to maturity. By selling the mortgages to investors, the originating banks replenished their funds, enabling them to issue more loans and generating transaction fees. This created a moral hazard in which an increased focus on processing mortgage transactions was incentivized but ensuring their credit quality was not.
Securitization accelerated in the mid-1990s. The total amount of mortgage-backed securities issued almost tripled between 1996 and 2007, to $7.3 trillion. The securitized share of subprime mortgages (i.e., those passed to third-party investors via MBS) increased from 54% in 2001, to 75% in 2006. American homeowners, consumers, and corporations owed roughly $25 trillion during 2008. American banks retained about $8 trillion of that total directly as traditional mortgage loans. Bondholders and other traditional lenders provided another $7 trillion. The remaining $10 trillion came from the securitization markets. The securitization markets started to close down in the spring of 2007 and nearly shut-down in the fall of 2008. More than a third of the private credit markets thus became unavailable as a source of funds. In February 2009, Ben Bernanke stated that securitization markets remained effectively shut, with the exception of conforming mortgages, which could be sold to Fannie Mae and Freddie Mac.
She says she believed what the Fed told her, what the SEC told her, and what the banking industry told her. She makes absolutely no mention of her bad habit of believing whatever she's told by her favorite authorities, so she most certainly will continue to make the same mistakes. Self-awareness fail.
McArdle blames Fannie and Freddie for "distorting" the market and calls them toxic. Yet she also acknowledges that they were not the problem. It's utterly incoherent, but it will please conservative readers who don't think. Logic fail.
McArdle lists other things she got wrong, but I won't bore you with them. Basically her lack of judgement, introspection and core knowledge meant that she got a lot wrong, but being a hack means that you can be wrong all the time as long as you are wrong in the right way.
McArdle does not figure out why she went wrong. She doesn't even ask the question. I hope, however, that she will at least come up with some new excuses, since I am running out of new ways to snark on the old ones.
Bonus Jane Galt blogging: July 6,2004
Children, gather round. I have something very, very difficult to tell you. You aren't going to like it, I'm afraid. None of us likes it -- it makes us all very unhappy. But it must be faced, just the same.
You see, difficult as you will find this to believe, politicians lie. All of them lie. Even nice politicians who agree with us, and are smart, and have really good hair and a nice speaking voice, lie. They lie frequently. They lie about the outcomes of their policies, and they lie about their reasons for enacting them. They lie about their past accomplishments, and they lie about their future plans. In the vast soulless meat market that is our political process, the guy who gives the most misleading impression, without actually getting caught in an out-and-out falsehood, generally wins.
Welcome to adulthood. Sorry I couldn't break it more gently.
July 12, 2004--six days later
While I was away, the "Bush lied" meme seems to have pretty convincingly blown up, although of course Josh Marshall has tried a hail mary pass, arguing that it's really all a fabrication of that well-known Right Wing Spin Machine, the Washington Post.
I feel somewhat vindicated in my repeated insistence that while I was (and remain) willing to entertain the notion that the Bush administration was stunningly incompetent, I am not willing to entertain (without proofs an order of magnitude better than those so far offered), that Bush & Co. are uniquely venal, dishonest, and manipulative. Dishonest and manipulative are the entry requirements for politics, the sound byte being a horrifically poor means of communicating anything useful. And venality is surprisingly rare among politicians--almost all of them could be making more money doing something else, and George Bush certainly doesn't need any more money than he already had before he ran for office.
Oh, I see. All politicians are dishonest except for the politicians in my tribe. They really can convince themselves that they are exceptions to every rule, can't they?