Old Wives' Tales
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Toxin du jour
Claim: The 2008 U.S. economic downturn resulted from Democratic control of Congress in 2007.
Example: [Collected via e-mail, March 2008]
Origins: This piece is one of the more ludicrous examples of the post hoc ergo propter hoc ("after this, therefore because of this") fallacy we've received in a long time.
We'll start by noting that it's not technically correct to claim the public voted "in a Democratic Congress in 2006." The Democrats did gain
The other major fallacies here are the notions that a single party with control of only the House of Representatives (but not the Senate or the White House) could have, by itself, brought about all the economic conditions described above, and that it could have done so in the space of a single year. The financial woes currently being experienced in the U.S. are due to a multiplicity of factors (many of which are completely outside the purview of Congress), including policies of the current and previous presidential administrations, previous Congressional actions (or inactions), institutional investment decisions, credit expansion, market forces, and global events. Moreover, all these factors are part of ongoing processes that were underway well before 2007, as political/economic commentator Kevin Phillips described in his 2008 book,
Mr. Phillips begins with an overview of the current debt debacle. The 1980s were the start of "three profligate decades," when the expansion of mortgage credit and the invention of financial instruments like collateralized debt obligations (C.D.O.'s) led to an orgy of leveraging and irresponsible speculation. The Federal Reserve kept the bubble afloat with easy money, while regulators and ratings agencies looked the other way.America may have "voted for change" in 2006, but the detrimental changes that have manifested themselves so far are the product of forces that have been a long, long time in the making, not the sudden caprices of one political party.
By 2007 total indebtedness was three times the size of the gross domestic product, a ratio that surpassed the record set in the years of the Great Depression. From 2001 to 2007 alone, domestic financial debt grew to
The second component of the perfect storm is the upheaval in the oil industry. Domestic production peaked in 1971, and there are signs that production worldwide is also peaking.
Finally, Mr. Phillips turns to what he terms America's "calcified" political system. We may need new regulations to deal with the debt mess, along with an energy policy to address the changing world of oil, but Washington, he says, has become dedicated to "the politics of evasion," reluctant to pass dramatic reforms or to call for sacrifice from the public. Democrats and Republicans alike are so entrenched, so dependent on campaign money and special interests, that "the notion of a breath of fresh air has become almost a contradiction in terms."
Last updated: 21 April 2008
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