My father write# a good letter explaining the conventional wisdom of

My father write# a good letter explaining the conventional wisdom of

the American right. However, tike all conventional wisdom, it is pop* ukirly-believed falsehood.

The idea that FVwnie and Freddie are to blame (or the current financial crisis is of recent vintage. It began to be disseminated soon after John *1 still need to be educated (about economRa)* McCain put his Riot in his mouth with the statement, "the fundamentals of our economy are sound* on Black Monday, the day after Lehman Brother* filed fur bankruptcy Merrill Lynch sokl itself to Bank of America, and AIG hurtJkd towards the abyss.

McCains campaign desperately needed an explanation for the crisis no center-right or center-left economists saw coming. Someone in that campaign st umbled on Freddie and Bums*. and wove a tab with these I twin giants as the had guys rcaponsibk* for bringing the international economic system to its knees.

The story is bunk; to quote from one of the few economists worth his salt. Dean Baker, who predicted the housing bust and subsequent credit crisis front the beginning: "Fhnnie and Freddie made a conscious decision to dive into (junk ntortgagesl in order to protect their market share (from) private giants like Citigroup and Merrill Lynch. The market share of ttuinie tuid Freddie in the years 2004 to 2007 never came close to its level before tlie junk market took oft According to data from the Federal Reserve Board. Fannie and Freddie securitised $815.2 billion worth of mortgages in 2002 accounting for 50.1 percent of the new mortgage debt that year. In 200B, they securitised $276 billion in mortgagee, giving them a market share of just 34.8 percent,"

Freddie and Fannie can be accurately blamed for roughly a third of the subprime fiasco, and not the overall financial crisis.

Tlie real story behind the financial crisis is much more complex, poorly suited to campaign trail soundbites, and favorable neither to Clinton Democrat* or Republicans. The crisis has its roots in the 70s. when the global economic policy shifted from Keynesianism to neoliliernlism, which pit'acla'S the God like wisdom of the free market and the propriety of [ kicking government out of the economic sphere altogether.

From then til now. all over the world we have seen a pattern of wealth concentrating at the* top, while the poor and middle class work harder and longer for the same or less, histoid of well-paid consumers, over Uh* past decade oapt<cmlly, our society had highly-lndebted consumers, mid so investors put their money into financial speculation - highly unregulated thanks to Clinton. Bush and McCain - instead of factories and American job rmitkiti.

Wlw invest in producing tilings when no one can afford to buy them? A bubble of trvnsit'd financial speculation developed, and eventually burst thanks to massive amount* of mortgage-backed securities, collateralised debt obligat ion*. credit default swaps mid other weapons of mass financial destruction. Fannie and Freddie wen* bit players.

Giving her ek*cU>ral college votes to Mr. Dcngulator John McCain would bt* just about the dumbest tiling Virginia could da

IVter Beattie, Brooklyn, N.Y.