"Rick Perry’s Subprime Industrial Policy"
Conservatives have developed a lot of fake interest in the general issue of industrial policy and corporate subsidies, built entirely around their entirely genuine dislike of renewable energy. But Jack Gillum for the Associated Press has a great piece about industrial policy oriented around subprime mortgage lending in Rick Perry’s Texas, a subject that’s somehow escaped the right’s ire for the past several years:
As Texas governor, Rick Perry spent tens of millions in taxpayer money to lure some of the nation’s leading mortgage companies to expand their business in his state, calling it a national model for creating jobs. But the plan backfired. Just as the largest banks began receiving public cash, they aggressively ramped up risky lending. Within four years, the banks were out of business and homeowners across Texas faced foreclosure. In the end, the state paid $35 million to subsidize it.
An Associated Press review of federal mortgage data, court filings and public statements found that Perry downplayed early warnings of an impending mortgage crisis as alarmist. That’s even as Perry’s own attorney general would later investigate whether Countywide Financial Corp. encouraged homeowners to borrow more than they could afford. As Perry offered $20 million in grants to Countrywide and $15 million to Washington Mutual Inc. — each blamed for having a major role in one of the country’s most serious recessions — he took in tens of thousands of their dollars for his gubernatorial campaign.
It’s Texas Gaullism in action.