Sen. Marco Rubio of Florida, who gave the Republican rebuttal to President Obama's first State of the Union address of his second term, will be a speaker at the 40th annual Conservative Political Action Conference (CPAC) in March. His rebuttal gives a clue to what he may say at that conclave of over 10,000 conservatives and dozens of conservative groups. Because he is likely being groomed for the presidency, we should pay attention to what he said.
What is most memorable about Rubio's rebuttal was not his stretching to reach for a glass of water. Rather, it was him blaming "big government" for all that is bad. In that speech, Rubio articulated a key component of conservative dogma: "If anything goes wrong, it’s the government’s fault." For them government is the straw man on which we blame all our ills.
In particular, he repeated the Republican mantra that "a major cause of our recent downturn was a housing crisis created by government policies." That claim, left unchallenged, has inevitable corollaries such as: "let the financial world police itself," "no new regulations are needed," and "consumers don't need more protection."
What government policy is Rubio talking about? The first one that comes to mind is the outlawing of "redlining," so that qualified buyers could get a mortgage no matter where they lived. Redlining referred to a bank's delineation of areas where it would not lend.
Another is the government’s encouragement of home ownership. Under George W. Bush, first-time owners "under certain circumstances" could buy with no down payment.
Such guidance cannot explain the rampant excesses of the mortgage industry. Was there a government document that said, "Lend to anyone. Don't check whether they can repay the loan?”
Or one that put borrowers in high interest loans even though they qualified for a low interest ones? That maneuver generated higher commissions.
Or one that ordered appraisers to inflate the value of a house?
Or one that ordered credit rating agencies to give triple A to junk?
Or one that said, "Burden someone who already owns his home clear of any lien, with a loan that could not be paid off?"
I have never heard of such documents. There is no mention of them in the 450 pages of The Financial Crisis Inquiry Report. Even the dissenting opinion at the end of it don't mention government as the cause of the debacle.
Instead the crisis was the result of a perfect storm with a variety of causes, including: massive accumulations of money searching for investments, leveraging debt to equity at almost 40:1 odds, and government watch dogs ideologically clinging to the belief that the private sector was best able to manage risk in spite of numerous warnings that a disaster was brewing.
Brokers, appraisers, rating agencies, and Wall Street had a feeding frenzy. The brokers told themselves, "If I don't grant the mortgage, another broker will, and that one will get the fees." The appraisers, the rating agencies, and Wall Street thought the same way. They all wanted market share. A culture of transferring risk and collecting fees swept through the world of finance. It even had its own acronyms, such as NINJA for "no income, no job, no assets" and IBGYBG for "I'll be gone and you'll be gone" when the music stops.
Rubio is being launched as the new Romney who will capture the Latino vote. His message, however, is the same one Romney offered: government is bad, taxes are bad, abortion is bad, same-sex marriage is bad, deficits are bad, guns are good. Of course, the program is more nuanced than that. For instance, it really means "deficits under Democrats are bad" and "deficits under Republicans are good," as anyone who checks the record will discover.
At the moment the Republican Party is cobbled together out of a few special interest groups. It may think its slow decline is due to failure to send its message effectively via Facebook and Twitter. Or it may hope Rubio, who appeared on the cover of Time as "The Republican Savior," will rescue it.
In the meantime, the GOP games the system by redistricting, voter suppression, and massive exploitation of the filibuster. These may only delay its irrelevance for awhile. Until it offers a program that clearly benefits the American people, there will be the suspicion that it has an unwritten compact with the rich: "We will keep your taxes low and you will fund our think tanks and campaigns."