Grading PolitiFact: Gingrich, Dodd-Frank and 20 percent

The goal is to help readers judge for themselves whether they agree with the ruling.
--Principles of PolitiFact and the Truth-O-Meter

Context matters -- We examine the claim in the full context, the comments made before and after it, the question that prompted it, and the point the person was trying to make.
--Principles of PolitiFact and the Truth-O-Meter

The issue:

(clipped from PolitiFact.com)

The fact checkers:

Jon Greenberg:  writer, researcher
Bill Adair:  editor


Analysis:

This fact check by PolitiFact may end up perfectly accurate.  Unfortunately, the PolitiFact team failed to provide material sufficient for the reader to make a sure judgment other than through simple trust of PolitiFact and author Jon Greenberg.

Let's have a look:

With the 2012 election in their sights, Republican candidates spend most of their time trying to prove that President Barack Obama and the Democrats will make the economy worse.

Presidential hopeful Newt Gingrich recently used this tactic in discussing housing and the new law to regulate the financial industry known as the Dodd-Frank Act. In a June 13, 2011, appearance in Concord, N.H., Gingrich said that Dodd-Frank "establishes a mandatory 20 percent down payment to buy a house. So at a time when housing prices have dropped worse than the Great Depression, we’re now going to have a law that guarantees there’s no housing market for a generation?" Gingrich said this was just one of many reasons to scrap Dodd-Frank entirely.

First-paragraph snark?  Check.  There's nothing like a little snark to project the aura of objectivity.

Partial quotation?  Check.

This Greenberg fellow will fit right in with PolitiFact.

If Republican candidates really spend most of their time trying to prove that Democrats will make the economy worse, then PolitiFact certainly wouldn't need to go back in time a month for this supposed example.  Even more interesting than the dated example is the lack of context for the quotation of Gingrich.  The sidebar citation leads us to (shocka!) a month-old story by this same Jon Greenberg.

Here's how Greenberg represented Gingrich in that story (yellow highlights added):

He criticized the Dodd Frank act on many fronts, including its impact on housing. “ It establishes a mandatory 20% down payment to buy a house,” he said. “So at a time when housing prices have dropped worse than the Great Depression, we’re now going to have a law that guarantees there’s no housing market for a generation?”

That assertion is questionable. The Mortgage Bankers Association’s analysis of the law makes no mention of such a rule. The law does require that borrowers prove that they have sufficient income to repay a loan.

Greenberg gave us all but one word of the quotation from his original story and we're still left with no surrounding context and nothing regarding the question (if any) that prompted Gingrich's comment.

Was Gingrich talking about the text of Dodd-Frank specifically?  Maybe.  Probably.  But with respect to offering the reader the tools to confirm PolitiFact's judgment (see epigraphical PolitiFact principle), this story falls short.  It comes down to trusting Greenberg.  Yeah, the guy who gave us first-paragraph snark.

As it turns out, Dodd-Frank empowered regulators to determine a down-payment threshold for a certain class of home mortgages.   Under Dodd-Frank, banks must retain a portion of the value of the mortgages they issue.  But some mortgages would qualify for an exemption from that treatment.  And for those types of exceptions the Obama administration regulators voted to establish the 20 percent down payment requirement.

Gingrich appears to say that all mortgages must meet the 20 percent requirement (trust Greenberg?).  And Gingrich appears to say that the regulation comes from Dodd-Frank.  The latter, depending on how Gingrich presented it, may have a grounding in the truth, albeit indirectly.

Too bad Greenberg skimped on the context, though I should note that PolitiFact's lone expert (a journalist) disagrees that Dodd-Frank could be the origin of the 20 percent requirement:

"It's totally incorrect to say that Dodd-Frank came up with the 20 percent down payment standard," said Ken Harney, a real estate columnist with the Washington Post Writers Group. "It just could not be further from the truth.  So whoever says that is just misinformed."

Harney notes that after the firestorm of protest, regulators extended the comment period for rule making. Harney’s assessment?  This is "a proposal that I think has no chance of becoming reality."

Though Greenberg downplays the rule as "just a proposal," the fact is the Obama administration was poised to enact it as a part of its execution of the Dodd-Frank law.  And if it would not hurt the housing market significantly, partially supporting Gingrich's claim, then why so much bipartisan resistance?

WASHINGTON – U.S. Senators Johnny Isakson, R-Ga., Kay Hagan, D-N.C., and Mary Landrieu, D-La., and U.S. Congressmen John Campbell, R-Calif., and Brad Sherman, D-Calif., today hosted a news conference calling on federal regulators to revise their proposed 20 percent down payment requirement for Qualified Residential Mortgages. The lawmakers reiterated that the regulators’ proposed rule would shut out responsible homebuyers and further cripple the housing market.

Assuming that Greenberg has represented Gingrich's claim fairly, it seems as though Gingrich's claim does have some truth to it.  Federal regulators under the Obama administration and ostensibly exercising authority granted them under Dodd-Frank voted to institute a 20 percent requirement for a certain class of mortgages.  And that proposal drew bipartisan condemnation based on the damage it might cause to the housing market.

Obama's administration favors policies that make that economy worse.  Fortunately for those suspicious (racist?) types, Greenberg waves them away.  Move along.  Nothing to see here.

As a result of Greenberg's initial snark, his story ends up misleading the reader.  The raw information provides a good bit of evidence of economic incompetence in the Obama administration.  But the story conveys the impression that it contains nothing to show that Obama or Democrats do anything at all to harm the economy.  A close examination of the evidences shows the reverse.

Welcome to the wonderful world of PolitiFact fact checking.


The grades:

Jon Greenberg:  F
Bill Adair:  F

The story accomplishes the agenda of minimizing the appearance of economic cluelessness in the Obama administration.  And even assuming that Greenberg presented Gingrich's statement fairly Gingrich may well have warranted a "Barely True" rating.  The PolitiFact team also fails based on its failure to provide sufficient context for Gingrich's statement.


Afters:

PolitiFact is in the process of expanding its operation to New Hampshire.  New Hampshire, of course, is the home of New Hampshire Public Radio--Jon Greenberg's employer.

It's all too easy to imagine the genesis of this story.

BA:  Hey, Jon!  It's great to welcome you as part of the PolitiFact team!
JG:  Thanks, Bill!  I've got to say I'm very enthusiastic about this partnership.  I've found the PolitiFact approach to fact checking inspiring.  Your story about how you realized you were reporting things you knew were untrue struck home with me.  As a matter of fact, I recently did a story where I questioned a politician's statement.  I was actually thinking of you while I did the story.
BA:  No kidding!  What was the story about?
JG:  Oh, it had to do with Newt Gingrich.  He made some crazy claim last month about the Dodd-Frank bill and I knew he was full of it.
BA:  Hey, you know what?  We can use that story in PolitiFact National to kind of get your feet wet with our system.
JG:  Really?  Great!
BA:  Great!
:-)


In other words, it wasn't really about Gingrich.  He apparently made the claim only once that we know of and did not continue to repeat it.  It didn't get picked up and recirculated. Old news, as they say.  This was about giving Jon Greenberg a pat on the back a month after he published his original story.


Gingrich merely receives the harm from the relatively frivolous fact check.  Selection bias?  You bet.



Disclaimer:  Any resemblance between the above dialog and an actual conversation between Bill Adair and Jon Greenberg is purely coincidental.