Glawe: Rubio’s “You Need Me” Strategy

Michael Glawe

Republican Sen. Marco Rubio’s response to President BarackObama’s State of the Union speech included a bold assertion concerning the recent global financial crisis: “This idea — that our problems were caused by a government that was too small — it’s just not true. In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies.”

It has become something of a banality for the Republican Party to blame the recession on just two culprits: Government Sponsored Enterprises (such as Fannie Mae and Freddie Mac) and the Community Reinvestment Act.

The claim is derived from Peter Wallison’s dissention on the Federal Crisis Inquiry Commission (which, at the time, was composed of six democrats and four republicans). His argument is that reforms to the affordable housing goals for Government Sponsored Enterprises caused lax lending standards. In addition, Wallison claims that Community Reinvestment Act forced banks to dole out high-risk loans to low and moderate income borrowers.

However, there is no evidence whatsoever that suggests that either Government Sponsored Enterprises or Community Reinvestment Act caused the housing bubble. It is a myth that has been proven wrong time and time again by the Financial Crisis Inquiry Commission, 16 separate case studies performed by all 12 Federal Reserve banks, and countless independent studies (it has taken me weeks to read through them all).

Though Government Sponsored Enterprises like Fannie Mae and Freddie Mac  did engage in risky subprime lending, it was done at a very late stage in the bubble. Federal data shows they had little impact on the recession. This doesn’t mean they are justified in their actions, however. Government Sponsored Enterprises like Fannie Mae and Freddie Mac lost up to $230 billion during the crisis.

Still, Republicans place blame on Fannie Mae and Freddie Mac to soften the criticism aimed at private sector lending — their constituents.

We call this “denial.”

All of this evidence is contrary to Rubio’s agenda. But he needs to sell his product, and if history doesn’t like his product, all he has to do is rewrite history. By rewriting history, Rubio may bolster himself as a prospect for presidential nominee.

Why do we allow politicians to practice illegitimate revisionism? History is a source of identity, and when historical revision is used for ideological gains rather than for scholastic means, that identity is lost.

Revising the events leading up to and causing the Great Recession is dishonest, but belief in the purity of free market capitalism is at the foundations of the Republican Party. The recession revealed the flaws in private sector lending (and the failure of government oversight), and in so doing unearthed weaknesses in the Republican platform.

Nevertheless, Rubio’s attempts exemplify the marketing involved in politics nowadays. Both Democrats and Republicans are guilty of fabricating a false sense of demand for their political expertise. It seems that oftentimes both parties stimulate this demand by casting the opposite side as tyrannical. By doing this, the public places an unrealistic value on the warrior who will fight the tyrants for us.

In Rubio’s case, the tyrannical democrats caused the recession and we need him to defend us.

French sociologist Jean Baudrillard neatly describes this demand as “need creation” in his work “For a Critique of the Political Economy of the Sign”. Baudrillard contends that needs are constructed, rather than innate. We attribute value to objects that stimulate production. The “ideological genesis of needs” precedes the production for those needs.

Ideological marketing sets in motion the genesis of needs.

Thus, political entities must create value in their platform by displaying themselves as the mega-superhumans ready to save the world from destruction. In order to establish demand for this, there must be a villain. To Marco Rubio, “more government is going to limit our opportunities”, therefore, government must be the villain. Otherwise, with no villain, why would we need our Florida hero?

For the decade leading up to the collapse, the Federal Reserve, under both Chairman Greenspan and Bernanke, “failed to stem the flow of toxic mortgages” (FCIC). The banks enjoyed thirty years of deregulation on the shadow banking system and the over-the-counter derivatives market. Not to mention that the government bought up all of those toxic loans, instead of allocating capital to depository banks.

So who really needs a hero? The taxpayers who had to pay for an irresponsible government that failed to regulate a reckless out-of-control market.

Rubio can make the government his villain, but not based on the myth that it created the recession, rather that it allowed for the recession to happen. But first, Rubio has to admit the flaws in pure capitalism.

I fear that if we keep revising history for our own political gain, we may not learn from our mistakes. If we don’t learn from our mistakes, history will repeat itself. And I mean the true history, not the rewritten one.

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Michael Glawe is a junior in mathematics and economics from New Ulm, Minn.