The CNBC Republican Presidential Candidate Debate: Gingrich

So what did we learn in last night’s debate? My take, using CNBC’s transcript of the debate–which amazingly, doesn’t have Governor Perry’s famous flub, although CNBC has footage of it on their page–is that Cain is a talking point marketing expert, but nothing more; Romney is wrong on housing and nothing else matters; Huntsman makes a lot of sense at times but is also problematic; and Gingrich is a banking lobbyist not a candidate. I’m going to do each one separately.

There’s not much to say about Perry, since he displayed his Palinesque unfitness for the Presidency, or Paul, Santorum or Bachmann as none are electable or able to influence the public policy narrative like Gingrich. So I don’t mention them further.

A final note; just because I’m not interested in voting for any of these candidates doesn’t make me an Obama supporter; I’ve been extremely disappointed in him.

Note: All page numbers refer to the CNBC transcript

Gingrich

Newt Gingrich is not nationally electable and will not win the Republican primary. Maybe he really thinks he can and will win and that’s why he’s running; he certainly has an original way of viewing the world. For example, last night he claimed to be a historian not a housing lobbyist for Freddie, a comment that was derisively received by those that pay attention. But his original viewpoint and inability to win national election isn’t why I call him a bank lobbyist instead of a candidate. It’s because of the following statements of his, bold mine:

Governor Romney has said that the government should let the foreclosure process play out so that the housing market can recover and the free markets can work.

Speaker Gingrich, is Governor Romney right?

GINGRICH: We, he’s certainly right in the sense that you want to get through to the real value of the houses as fast as you can, because they’re not going to rise in value as long as you stay trapped, as Japan has done now for 20 years. But I think there are two specific steps you have got to understand in terms of housing.

To pick up on something Congresswoman Bachmann said, if the Republican House next week would repeal Dodd/Frank, and allow us to put pressure on the Senate to repeal Dodd/Frank, you would see the housing market start to improve overnight. Dodd/Frank kills small banks, it kills small business. The federal regulators are anti- housing loan, and it has maximized the pain level….

For starters, there is no “real value” of houses right now because there is no way for the demand that exists to be expressed–no loans because the nonconforming securitization market choked on all the securities fraud. That’s why the Republican let’s speed up foreclosures line makes no sense; there’s no natural bottom to the market at the moment. But it’s the language I bold that kills me.

Repealing Dodd-Frank has nothing to do with solving the housing crisis. It’s a complete non sequitur that needs challenging. And then he chases it with the claim that Dodd-Frank kills small banks, small business? When we’re talking about Dodd-Frank and banks, we’re talking about too-big-to-fail banks. We’re talking about reining in abusive lending practices. And which federal regulators are anti-housing loan? Most housing loans are government backed these days.

Another Newt beaut was this one, his claim about his non-lobbyist advice for Freddie:

And my advice as a historian, when they walked in and said to me, ”We are now making loans to people who have no credit history and have no record of paying back anything, but that’s what the government wants us to do,” as I said to them at the time, this is a bubble. This is insane. This is impossible.

The government did not cause the housing and foreclosure crisis or the financial crisis by forcing banks to make loans to people who couldn’t pay them. This meme is what Paul Krugman calls a Zombie Lie; it doesn’t matter how many times it’s debunked, it rises from the dead to mislead again because it the narrative it pushes serves powerful interests. For a reality check, see, e.g., my piece from the other day on how we got here, or even more on point, the rebuttals Paul Krugman links to in this piece.

But by pushing the Zombie Lie that irresponsible borrowers are to blame for our current crisis, Gingrich is again carrying banking lobbying water. The solutions that flow from defining the problem that way all help and protect the banks. And pushing the Zombie Lie helps prevent people from waking up to the reality  that big bank and Wall Street greed are what got us here.

Gingrich is a very skillful speaker, and Cain’s equal in staying on message, though he lacks Cain’s charisma. By pushing the lines he’s pushing he’s not getting elected but he is making our national crisis worse; he’s a tremendous asset to the banks. And I’m sure they know it.

One reason I think he’s unelectable: “Government Shutdown”. It’s not just potent history; Gingrich advocated shutting the government down this past February. I do not see independent voters, or even sufficient Republican primary voters, wanting a candidate that will shut the government down rather than do a deal. Gingrich has many other liabilities too. But the longer he’s in the race, the longer he hurts us all with his zombie lies and his new, Dodd-Frank ones.

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