Opinion

The Great Debate

from Bethany McLean:

How Ralph Nader learned to love Fannie and Freddie

Corrects story issued February 18 in third-to-last paragraph regarding efforts to contact Ralph  Nader.

“It is time for [government-sponsored enterprises] to give up ties to the federal government that have made them poster children for corporate welfare. Most of all, Congress needs to look more to the protection of the taxpayers and less to the hyperbole of the GSE lobbyists. –Ralph Nader, testimony before the House Committee on Banking and Financial Services, June 15, 2000

“Fannie Mae and Freddie Mac should be relisted on the NYSE and their conservatorships should, over time, be terminated. –Ralph Nader, letter to Treasury Secretary Jacob Lew, May 23, 2013

People certainly do change.

Right now, one of Ralph Nader’s key projects, Shareholder Respect, is supporting a group called Restore Fannie Mae. They are fighting for “an end to the unconstitutional conservatorship of Fannie Mae and Freddie Mac by the U.S. government.”  To that end, Nader has written an op-ed in the Wall Street Journal, “The Great Fannie and Freddie Rip-Off” and sent the above letter to Treasury Secretary Jack Lew, as well as one to the new Federal Housing Finance Authority director, Mel Watt. Nader also held a roundtable to drum up support for the cause, which largely seems to be about making sure shareholders get paid--but which seems an argument for a return to the status quo.

For most of their existence, Fannie and Freddie have been controversial.  Critics argued that their gains during good years would go to shareholders and executives, while taxpayers would be saddled with any losses, thanks to an implicit government guarantee. That’s indeed what happened during the 2008 economic crisis.

Halting the Corvair made America safer

This is a response to an excerpt from Paul Ingrassia’s Engines of Change: A History of the American Dream in Fifteen Cars, published this month by Simon & Schuster.

The causal stretch by Paul Ingrassia over three decades and millions of intervening human events leads him to conclude that “decades after its demise, in the election of 2000, the Corvair’s legacy improbably helped to put George W. Bush in the White House.”

Egads! – as the British say. His otherworldly trek through American history reminds me of Edward Lorenz’s “butterfly effect,” in which the trail of a tornado is traced all the way back to the flapping of a butterfly’s wings thousands of miles distant. It is one thing to lament the deadly, dancing design of the Corvair until the 1965 model, when the stabilizing, dual-link suspension system was finally installed; it is quite another to burden this automotive offspring of GM’s Ed Cole with the lawless, corporatist, war-starting, anti-democratic Bush regime selected by five Supreme Court justices-turned-Republican politicians in their 5-4 dictate of Bush v. Gore.

How the Corvair’s rise and fall changed America forever

This is an excerpt from Engines of Change: A History of the American Dream in Fifteen Cars, published this month by Simon & Schuster.

However it unfolds, this year’s U.S. presidential election is unlikely to be as close as the one America experienced in 2000. That election was decided, after months of contention and suspense, by disputed ballots and a razor-thin result in Florida.

The historic events, however, were set in motion 40 years earlier by a badly flawed automobile, the Chevrolet Corvair. In the mid-1960s the Corvair made Ralph Nader famous. It also made lawyers ubiquitous, thereby making lawsuits one of the great growth industries of the late 20th Century. And decades after its demise, in the election of 2000, the Corvair’s legacy improbably helped to put George W. Bush in the White House. The car’s story is one of genius, hubris, irony and tragedy, not to mention unforeseen long-term effects on American life and thought.

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