|Don't Cry for Milton||Liberal Coercion|
by Christopher Chantrill
June 11, 2009 at 12:22 am
THE AMERICAN people are pretty well convinced that the mortgage meltdown was the fault of greedy bankers, stupid borrowers, and the odd Friend of Angelo Mozilo like Sen. Christopher Dodd (D-CT). Thats hardly surprising, since the mainstream media has shown a vivid disinterest in getting to the bottom of it all.
Thats why we have Thomas Sowell. His latest book, The Housing Boom and Bust, is a workmanlike analysis of the housing crisis. Its short enough, at about 50,000 words, for anyone to get through on a weekend.
Needless to say, Dr. Sowell does not find that the meltdown was all the fault of greedy bankersor even foolish borrowers. He puts most of the blame on politicians and activists that insisted that the US had an affordable housing crisis when it didnt. The government agencies that implemented the will of the political sectorthe Federal Reserve System, Fannie and Freddie, and the US Department of Housing and Urban Developmentthey were the guilty suspects with actual fingerprints on the victim.
When analyzing a political scandal, our liberal friends usually like to expose the myths that the stupid American people were in thrall to. Dr. Sowell does not descend to such oversimplification, but we will.
Myth #1: The Housing Boom was Nationwide. No it wasnt. It was concentrated in just a a few places. News reports and scholarly research have found that even during the boom affordable housing has been the norm across most of the country, but with glaring exceptions[.] Writes Dr. Sowell:
Almost invariably... these are places where severe local government restrictions on land use, and other impediments to building, have driven the cost of houses and of apartment rents to levels that take as much as half of the average familys income[.]
In cities like Dallas and Houston where there are few restrictions on land use, home prices have not skyrocketed; nor have they collapsed in the downturn. In Dallas the home price decline was only 3 percent.
Myth #2: Greedy Bankers Foisted Sub-Prime Loans on the Poor. Oh no they didnt. It was government. You see, liberal politicians and activists were convinced that banks were unjustly denying loans to minorities and low-income borrowers. They even had studies to show that minorities were discriminated against. The solution? Force. Liberals would force the banks to loan money to less-qualified borrowers.
Various community activists across the country have been able to pressure banks into making concessions in money or in kind, in order to get those activists to withdraw their objections to pending mergers or to banks opening new branches in another state, for example.
Myth #3: Lack of Regulation Caused the Crisis. Actually the regulators were part of the problem. With the politicians cheering them on, the regulators were all over the banks forcing them to lower their lending standards. And when the regulators finally did try to restrain the banks, the politicians reined them in.
When the Office of Federal Housing Enterprise Oversight... turned up irregularities in Fannie Maes accounting and in 2004 issued what Barrons magazine called a blistering 211-page report, Republican Senator Kit Bond [R-MO] called for an investigation of the Office of Federal Housing Enterprise Oversight, tried to have their budget slashed, and sought to have the leadership of the regulatory agency removed. Democratic Barney Frank [D-MA] likewise declared: It is clear that a leadership change at OFHEO is overdue.
These three myths are familiar. They are verses from the favorite refrains of the liberal songbook. You can also find them in the whereas sections of countless liberal Enabling Laws. Whereas theres a national crisis; Whereas business is to blame; Whereas government doesnt have enough regulations: Now therefore... more liberal administrative power is the answer.
Then the liberals act surprised when the Law of Unintended Consequences kicks in, and government ends up hurting the very people liberals want to help. The result of cranking up house prices in San Francisco is that the black population has been cut in half since 1970. Who knew?
Whatever your grand vision, you cannot ultimately escape from the costs of your vision, writes Sowell.
One of the biggest differences between economic decisions in the market and political decisions in government is that costs are an inescapable factor in economic decisions, while political decisions can often ignore costs[.]
But not for ever.
For some legitimate functions of government, like defense, excessive cost goes with the territory. When you are defending against Hitler, you crank up the National Debt to 150 percent of GDP and worry about paying it off later.
But cranking up the National Debt over 100 percent of GDP to clear up the mess after some liberals had a dream of affordable housing that they thought other people should pay for is something different. After paying for that, people might just decide they want to change their governing elite for another one.
Buy his Road to the Middle Class.
[W]hen I asked a liberal longtime editor I know with a mainstream [publishing] house for a candid, shorthand version of the assumptions she and her colleagues make about conservatives, she didn't hesitate. Racist, sexist, homophobic, anti-choice fascists, she offered, smiling but meaning it.
Harry Stein, I Can't Believe I'm Sitting Next to a Republican
[T]he way to achieve a system of determining admission to the public schools on a nonracial basis,
Brown II, 349 U. S., at 300–301, is to stop assigning students on a racial basis. The way to stop
discrimination on the basis of race is to stop discriminating on the basis of race.
Roberts, C.J., Parents Involved in Community Schools vs. Seattle School District
[T]he Liberal, and still more the subspecies Radical... more than any other in these latter days seems under the impression that so long as he has a good end in view he is warranted in exercising over men all the coercion he is able[.]
Herbert Spencer, The Man Versus the State
[To make] of each individual member of the army a soldier who, in character, capability, and knowledge, is self-reliant, self-confident, dedicated, and joyful in taking responsibility [verantwortungsfreudig] as a man and a soldier. — Gen. Hans von Seeckt
MacGregor Knox, Williamson Murray, ed., The dynamics of military revolution, 1300-2050
[The Axial Age] highlights the conception of a responsible self... [that] promise[s] man for the first time that he can understand the fundamental structure of reality and through salvation participate actively in it.
Robert N Bellah, "Religious Evolution", American Sociological Review, Vol. 29, No. 3.
[In the] higher Christian churches... they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm
[Every] sacrifice is an act of impurity that pays for a prior act of greater impurity... without its participants having to suffer the full consequences incurred by its predecessor. The punishment is commuted in a process that strangely combines and finesses the deep contradiction between justice and mercy.
Frederick Turner, Beauty: The Value of Values
Within Pentecostalism the injurious hierarchies of the wider world are abrogated and replaced by a single hierarchy of faith, grace, and the empowerments of the spirit... where groups gather on rafts to take them through the turbulence of the great journey from extensive rural networks to the mega-city and the nuclear family...
David Martin, On Secularization
What distinguishes true Conservatism from the rest, and from the Blair project, is the belief in more personal freedom and more market freedom, along with less state intervention... The true Third Way is the Holy Grail of Tory politics today - compassion and community without compulsion.
Minette Marrin, The Daily Telegraph
These emerge out of long-standing moral notions of freedom, benevolence, and the affirmation of ordinary life... I have been sketching a schematic map... [of] the moral sources [of these notions]... the original theistic grounding for these standards... a naturalism of disengaged reason, which in our day takes scientistic forms, and a third family of views which finds its sources in Romantic expressivism, or in one of the modernist successor visions.
Charles Taylor, Sources of the Self
There was nothing new about the Frankish drive to the east... [let] us recall that the continuance of their rule depended upon regular, successful, predatory warfare.
Richard Fletcher, The Barbarian Conversion
The Union publishes an exact return of the amount of its taxes; I can get copies of the budgets of the four and twenty component states; but who can tell me what the citizens spend in the administration of county and township?
Alexis de Tocqueville, Democracy in America