If a conference concerning one of the greatest housing crises in American history happens and the media don’t report on it, did it really take place?
On August 17, the Treasury Department convened a conference on ‘The Future of Housing Finance.’ Led by Treasury Secretary Timothy Geithner and Housing and Urban Development (HUD) Secretary Shaun Donovan, the conference included a panel of experts from the mortgage, lending, and banking industries to discuss ways to reform the mortgage market, specifically government-sponsored entities (GSE”s) Fannie Mae and Freddie Mac.
The big three evening news shows, on the contrary, felt this wasn’t vital enough for major coverage. Only ABC’s ‘World News Tonight’ aired a two minute and nineteen second-segment, whereas CBS and NBC failed to mention the conference. Rather than reporting on the conference, CBS’s ‘Evening News’ aired a two minute, thirty six second-segment on the fedora hat making a comeback.
In short, the media paid more attention to a hat popular during the Great Depression than to experts hoping to prevent another Great Depression.
When the media did report on the conference, they touted Geithner’s calls for increased government presence in the mortgage market. Major print outlets such as the AP, New York Times, and Washington Post all ran stories on the conference and each of their stories parroted Geithner’s calls for more government.
“The Obama administration invited banking executives Tuesday to offer advice on changing the government's role in the mortgage market. Their response: Stay big,” wrote Alan Zibel of the AP.
The Times followed suit:
“Mr. Geithner said continued government support was important ‘to make sure that Americans can borrow at reasonable interest rates to buy a house even in a downturn.’’ Reporter Binyamin Applebaum wrote in the New York Times.
Geithner, while critical of the GSE’s, didn’t hide his distrust of the private sector at the conference.
“This crisis – where we saw a full retreat by private financial institutions from many forms of mortgage and consumer lending – provides a compelling illustration of why private markets, left to their own devices, find it hard to resolve financial crises,” Geithner said during his opening remarks.
The print stories also championed panelist Bill Gross’s calls for additional stimulus money and nationalizing the mortgage market. Gross, managing director of Pimco, was featured in all three major print stories, most prominently in the AP story, where he was mentioned in the third paragraph, before Geithner or Donovan.
“Bill Gross, managing director of bond giant Pimco, said the economic recovery required more government stimulus, particularly in the housing market,” Zibel wrote. “Without such stimulus in the next six months, Gross said, the economy will move at a ‘snail's pace.’”
The New York Times highlighted Gross’s anti-private sector sentiment:
“’To suggest that there’s a large place for private financing in the future of American housing finance is unrealistic,’ Mr. Gross said.”
Despite the media’s big government hype, the panelists did not “overwhelmingly advocate” bigger government, as the AP stated. Panelist Alex J. Pollock, resident fellow at the American Enterprise Institute, a free market think tank, made a compelling case for reducing government involvement in the housing sector by eliminating the GSE’s and establishing a private secondary market to handle middle class mortgages.
“There is a verse in the book of Proverbs which addresses guarantees and it goes like this: ‘He who stands a surety of the debts of another shall smart for it,” Pollock said during the conference.
However, only the Washington Post mentioned Pollock’s argument, in the ninth paragraph, behind both Geithner and Gross’s comments.
The media have refused to cover the GSE’s for years and continued that trend by not covering the first major discussion on reforming them. Even though taxpayers could end up paying $1 trillion on the GSE’s, at least the media informed viewers where they could buy a $10 fedora.