The Stew

Is it just my imagination, or are the Republicans deathly afraid of the status quo?

I keep hearing all of these horrible scenarios that will befall the U.S. if, as it is becoming increasingly likely, Obama is elected president next week. If that happens…

1) We’ll have (gasp) SOCIALISM! Obama is apparently a closet Marxist, and wants to take all your monies and give them to people on the welfare. The whole socialism argument would have made more sense before our current Republican administration started the process of partially nationalizing banks and insurance companies — also known as socialism.

It’s frightening to me that this Marxist argument has any kind of traction, because it’s so ridiculous on so many levels. While McCain and Palin rail against the redistribution of wealth — apparently forgetting that Palin helped orchestrate a huge redistribution from oil companies to Alaska citizens — George Will this week rightfully pointed out that the very purpose of Washington, D.C., is to redistribute wealth. We call it “taxes.” Look it up.

2) The economy will collapse! According to McCain, this is the wrong time to raise taxes on anyone — especially the folks making more than a quarter of a million dollars a year or more, since they create jobs. Raise taxes now, and companies will move jobs overseas, people will make less money, businesses will suffer… it’ll look a lot like the economy looks right now.

McCain’s entire economic solution rests on this idea that cutting taxes will solve our problems. In his mind, did the last 8 years not happen? Did Bush raise taxes when we weren’t looking? And yet we ended up where we are now.

Empirical evidence doesn’t seem to matter to the Republican mind. Got surpluses? We need a tax cut! Going to war? Tax cut! Rising deficits? Tax cut! Economic collapse? Why, a tax cut will clear that right up! Horse feathers.

3) Our enemies will be emboldened! Giving the reins to an untested Obama means that he won’t bomb bomb bomb, bomb bomb Iran and we’ll have other countries walking all over us. Reminds me of a great joke I heard a couple of years ago: What’s the difference between Washington, D.C. and Tehran? Tehran has a plan for Iraq.

Bush has been walking back from his own policies concerning Iran, Iraq, and North Korea because those plans just plain weren’t working. All of that walking has brought him to where Obama said we needed to be in the first place. The only person who seems to think we should keep doing what we were doing for years — with the opposite of what you’d consider an appreciable return on investment — is McCain.

4) We’ll have one-party rule! McCain has been late to this party, but he’s been getting a lot of help from the pundit class on this one. There’s a general consensus among thinking folk that this is a good argument: Since, as we know for sure, the Democrats are going to gain seats in the House and Senate this election, we need a McCain in power to keep one party from ruling both branches of government.

Technically, this isn’t an argument against the status quo — but it’s an argument against what was the status quo for six years out of the last eight in this country. So let me suggest to those trying to make this argument: unless you voted for John Kerry in the last presidential election, shut the hell up.

Sounds almost naughty. “Curious about foreclosed properties?” Click here for discrete information you can read in the privacy of your own home/apartment/ cardboard box.

I got this gem of an email the other day from a local real estate outfit. They’re trying to put as pretty a face as possible on the subprime debacle, and as a fellow marketer I can’t really blame them.

Speaking of blame, though, there’s something I’ve got to get off my chest.

There’s been this interesting thought cruising through the conservative ranks related to who’s really to blame for the mortgage meltdown. Unsurprisingly, they think it’s dark people.

Here’s how it works. In 1977, Congress passed and President Carter signed into law the Community Reinvestment Act (CRA), which forced banks to serve underserved communities. Typically, that meant poor- and moderate-income minority neighborhoods. Conservatives say that if not for this piece of regulation, banks wouldn’t have been forced to offer mortgages to colored folk who couldn’t afford them, and none of the subsequent capitalistic implosion would have happened.

I laughed the first time I heard that, since it was obviously concocted by some young white person. I’m old enough to remember that prior to anti-redlining laws like the CRA, banks could legally discriminate against minorities with impunity. And it’s not like that sort of discrimination has been eradicated – it’s just moved a few inches under ground.

I was prepared to write the theory off as one that would only appeal to the loony right, until I heard George Will utter something similar on the TV show “This Week” this week. While I am under no illusion that George will be reading this, I feel the need to respond now that an honest-to-goodness conservative thinker thinks this is plausible.

1) Why so long? If the CRA forced innocent banks to lend to those inconsiderate and undeserving black people, why did it take 30 years for the mortgage crisis to erupt? The easy answer: there’s no correlation.

2) The CRA specifically instructed banks to use the same criteria in evaluating loan-worthiness for poor people as rich people. E.g., if two people have good credit scores and income histories, you don’t get to say “no” to someone who lives in a bad neighborhood and “yes” to someone in a good neighborhood. So to the extent that Joe Suburb was offered a Ninja loan, Joe Inner City had to be offered one as well. I have no idea why the inner city folk are being singled out, when one suburban mortgage that implodes can be worth as much as 5 of those in the city.

3) I’d be more willing to accept this notion of “the government forced us to loan money to coloreds” defense if, at any time from 2002-2006, any mortgage originator had stood up and said, “Hey, investment folks, I know it looks like we’re making billions of dollars here, but we’re writing a lot of bad paper. The government has forced us to write loans we know are worthless, so be careful.” I don’t remember hearing that from anyone, do you?

4) Similarly, I’d be more willing to blame dark people for this mess if they’d had anything to do with the mortgage derivatives or securities that actually caused the financial meltdown. See, having a mortgage you can’t pay used to be an issue for only you and your bank. You defaulted, and your bank owned your asset. Suddenly, in this century, under this president (i.e., not last century, under Carter), it got a lot more complicated with people bundling huge swaths of mortgages and selling insurance against the possibility of those mortgages going down in value. All the cool kids on Wall Street did it, making billions in the process. We know now that what they were doing was pure, unadulterated gambling. And they lost. Guess what — you don’t get to blame the plastics company for supplying the raw material used to make the dice you used to lose your shirt at the craps table.

5) Subprime borrowers do share a measure of the blame. Not a huge measure, but a measure. If you make $50,000 a year, you have no business trying to live in a $300,000 house. I’m sorry your high school economics class didn’t prepare you for that little bit of truth.

But seriously, conservatives need to man up. Personal responsibility doesn’t end when you bundle a lot of personal irresponsibility and sell it to some dupe who resells it to some other dupe. If you think the market can do no wrong, and the government can do no right, you need to own this crisis — and don’t go blaming poor people or begging taxpayers for help.