GSE Article Shows How Little Writer Has Learned

Just when we were in need of an example of media ignorance and bias, along comes Jeff Horwitz with an unwarranted attack on ideas he doesn't agree with ("GSE Debates Show How Little We've Learned," July 5).

The event he attended (or watched in streaming video) was a forum on a book by Oonagh McDonald entitled "Fannie Mae and Freddie Mac: Turning the American Dream Into a Nightmare." The book is a thoroughly researched, detailed and footnoted study of how an ideological bias in favor of low-income lending, implemented primarily through Fannie Mae and Freddie Mac, degraded underwriting standards for residential mortgages in the United States, and caused both the mortgage meltdown and the financial crisis. It is very doubtful that Horwitz has read it.

Oonagh McDonald is a widely respected expert in financial regulation, a former Labour Party member of the British Parliament, and a Labour Party spokesperson on Treasury and Economics. She is currently a member of the Financial Services Authority, the regulator of the financial services industry in the U.K. With this background, one might think that Horwitz would have shown a little respect for her views. Instead, he snidely took a single quote among her statements at the conference out of context and sought to make it seem that she didn't understand the subject about which she'd written so thorough a book. It was a low point in journalistic behavior—exhibiting all the bias and ignorance of a subject that one sees elsewhere, but not usually in American Banker.  

McDonald can defend herself, but it's possible that as a scholar she does not realize that, in the United States, outlining a different narrative about what happened in the financial crisis opens one to political attack.

Peter J. Wallison is the Arthur F. Burns Fellow in Financial Policy Studies at the American Enterprise Institute.