The Liberal Housing Crash

Conservative writer, economist, and icon Thomas Sowell has just published a new book on the housing crisis. It is simply called The Housing Boom and Bust.

I'll be writing a full review this weekend, but let's just hit the high points of his argument.

• The housing boom was not nation-wide. It was centered in a few places where land-use restrictions make it very difficult to build houses for people.
• The problem was not a lack of regulation. There was plenty of regulation. Most of it was bullying banks into lowering their credit standards to offer loans to people that were bad credit risks. Some politicians attacked regulators that reported on the developing problems at Fannie and Freddie.
• There was no significant discrimination against minority borrowers. There were corrupt politicians that took contributions from banks, insisted on lower credit standards, and then blamed the banks for greed. Think Barney Frank and Chris Dodd, for starters. There were liberal activists shaking down banks for cash by accusing them of racism.
• Political actors never have to deal with costs. Political activists with a "vision" never have to deal with reality. They can blame and shame and posture and order people around. But when things go south, they refuse to face reality.
• Business has to face reality. Unregulated banks can't just loan money to anyone. They have to think about the costs of risky action. But when the government insists they act recklessly, on pain of political sanction, what can they do?
• The derivatives mess grew out of the government's reckless policy. Given that the banks were forced to load up on risky debt it made sense to lay the risks off. But nobody had any experience with the new financial instruments, not the rating agencies, not the banks, not the analysts. So people made mistakes in pricing risks. But then the finance players wouldn't have invented the new instruments unless there was a need to spread the risk around.

It all points up the importance of limited government. It's all very well for the government to plunge off with its mega programs. But what happens if things go wrong? Since government is very bad at recognizing and dealing with the costs of its initiatives, there is always a chance that government will make a complete mess of things. Then it will try to patch up the mess with another mega program that makes things worse.

So we get back to the "too big to fail" conundrum. If it is too big to fail, then it is too big! That applies to banks and automakers, and it also applies to government.

Maybe, after a century of anti-trust bumbling and fumbling we have an anti-trust principle. If it's too big to fail, then it's too big! Whaddya think, Senator?

But does this make any difference? Will liberals ever learn? Never mind blaming them for the crisis. Can we at least get them to see how their interventions hurt the poor that they are trying to help?

Probably not. That's why we have politics. You don't need the liberals to realize their error. You just need to persuade enough moderates and independents so you can repeal stupid liberal programs that lead to a stupid liberal housing crash.

But nobody said it was going to be easy.

Empathy and the Double Standard

Just about on the same day two political assassins struck and killed Americans in America.

Abortion doctor George Tiller was killed on a Sunday in church and anti-abortion Christian extremist Scott Roeder is the suspected killer.

On Monday two military recruiters were killed in Arkansas. The suspected killer is Abdulhakim Mujahid Muhammad, a black convert to Islam.

Everyone from President Obama to pro-life groups has condemned the murder of George Tiller. Everyone from President Obama to anti-war Code Pink has NOT condemned the Arkansas killing.

It just shows the problem with the "empathy" approach to the law advocated by President Obama and mainstream liberals everywhere.

You see, when you have empathy for someone then you might be willing to understand why they were driven to murder an evil abortion doctor. Or, you might be willing to understand, from another perspective, why they might feel driven to kill an evil military recruiter.

People are social animals; they pick up cues from their peers and from authority figures. So when President Obama hurries to condemn the terrorist killing of an abortion doctor, he sends a message. When he doesn't hurry to condemn the murder of recruiter Pvt. William Long, he sends a message.

When President Obama talks about "empathy" as an aspect of judging, he is sending a message. He is launching the notion that, where certain favored groups are concerned, he would hope that his judges would nudge the scales of justice. What does that mean for people not included in the warmth of his empathy?

Judge Sotomayor is a woman who has talked about the special qualities of a "wise Latina woman." But statements like that raise questions about her impartiality when she participates in a appeals case on race and turns down one side or another flat without formal review.

Justice must be done, and also justice must be seen to be done. The process is as important as the result.

If I were advising our liberal friends, I would tell them that they have a problem on this. Liberals have had a grand old time for the last half century running around accusing people of being racists, sexists, and homophobes. There is almost no way of rebutting such accusations without getting into the "when did you stop beating your wife" situation. The trouble is that with that sort of talk you make enemies every time you open your mouth.

Life was easy for liberals when they were running around calling Bush a liar. When you are in opposition, you got a right to get a bit of slack.

But when you are the government, then your careless accusations get taken very seriously indeed. That's when people start looking at your actions and your rhetoric and discovering a double standard.

Pretty soon they decide it is Time for a Change.

Liberal Fascism and Civilization

Today Jonah Goldberg is celebrating the paperback edition of his bestseller Liberal Fascism with Kathryn Jean Lopez.  Of course, he'd like to be getting the sales that Mark Levin is getting with Liberty and Tyranny, but who's complaining?

Of course, fascism celebrates violence, and the liberal fascism a kind of violence-lite as it trashes the rule of law in favor of elite paternalism, and political payoffs to powerful supporters.

In the same issue John Derbyshire delights in a recent dinner with Steven Pinker, of The Blank Slate.  And that leads to the decline of violence.

This wasn’t an intimate one-on-one dinner, but the monthly meeting of my gents’ dinner club, at which Professor Pinker was guest of honor. He talked about the historical decline of violence, the subject of his next book, then a general discussion took off in several different directions.

I've been reading about this recently in Nicholas Wade's Before the Dawn and in Charles Taylor's Secular Age. Taylor discusses how the West "civilized" the elite and the poor over the past 500 years, by reducing instinctive violence and sexual license.

This can go overboard, he explains, as in the sexual renunciation ethic of Augustinian Christianity.  But clearly the modern era is built upon a repression of the base instincts.

Naturally there are revolts against this, led in our time by the elite.  Fascism and the Sexual Revolution did not come from the gutter; they came from Romanticism, Nietzsche, and Freud, and well-born chaps like the Bloomsbury set.

Even in our smooth well-ordered world--especially in our well-ordered world--people hanker after the rush of violence and sexual release.  And it's hard to tell who is the good guy.

Christianity has championed sexual repression and also tamed the princes.  But it has also sanctioned religious wars and a celebration of ordinary life and sexuality.

The secularist opponents of Christianity have made much of its sexual repression and its religious wars.  But now they are regulating sexual behavior on campus and establishing speech codes so that people can be free, not of rowdy thugs, but of rowdy opinions.  Or alternatively they celebrate Peace on the one hand and sexual liberation on the other.

You can see that the question of the "civilizing" of the human race is complex, more complex than we allow in our routine partisan exchanges.

And the question lurking over it all is: how far can we go with our civilizing before we turn into vegetables?

Auto Bankruptcy Morning

It's telling, isn't it, that the New York Times had on its website the day of General Motors' bankruptcy a photo of a Chevrolet Corvair. You know, Unsafe at Any Speed, Ralph Nader, and all.

Because the Corvair is a symbol of the liberals' 70 year relationship with General Motors. They just couldn't keep their hands off.

You could say that it all started in the 1930s with the Wagner Act that allowed the auto unions to organize the automobile industry and first raise wages above the market rate (and plunge the economy into the 1937 recession).

After World War II liberal economist John Kenneth Galbraith wrote American Capitalism. It was an apology for the economic arrangements brought in by the New Deal and the Wagner Act. In Galbraith's view it was a good and beneficial thing for Big Business to be balanced by the countervailing power of Big Labor with Big Government as a arbitrator between labor and business. That is what Galbraith said. Now we can see how completely wrong he was.

Instead of countervailing power there arose a narrative of countervailing power. Underneath the narrative and the rhetoric, the auto companies capitulated to the union, choosing a cosy life of appeasement rather than a principled stand against government-sponsored monopoly. But then, what else could they do?

Under this cosy arrangement Big Labor and Big Business racked up wages and car prices in a kind of hands-off collusion. Profits were good and it looked like they would go on forever. So the United Auto Workers bargained for and the auto companies agreed to wages and benefits that assumed continued prosperity and robust earnings far into the future, with expensive pensions and retiree health benefits that would have to be paid not from savings in the present but auto company earnings in the future.

Then there was Ralph Nader in the mid 1960s and the auto safety movement. Then there was the 1970s energy crisis and laws to regulate automobile mileage.

Now, of course, we have the green energy movement that wants to regulate Detroit into building green cars that are fuel-efficient and have a small carbon footprint.

What's surprising is that it has taken this long to completely destroy the domestic auto industry. Now, of course, the US government owns a majority interest in both GM and Chrysler. The stockholders and bondholders have been more or less completely stiffed and the United Auto Workers union gets a big minority interest. That, my friend, is what piracy and plunder looks like.

Now that the government owns GM and Chrysler will it help them get on their feet and get out of the way? Or will it meddle even more in the auto business?

What do you think?

But there is one comfort. The auto companies failed on the Democrats' watch, and now they own the problem.

Why Be Scandalized When Politicians Act Like Voters?

Everyone in Britain is agreed that their MPs are outrageous, claiming for expenses on all kinds of questionable things, like moats and duck islands.

But let's be fair. All they are doing is signing up for benefits, just like everyone else, from welfare recipients to corporate welfare recipients. Everyone thinks they should get stuff for free from the government. So why be surprised if the legislature acts just like the people?

Anyway, this is nothing remarkable. Most all insurgencies, formed to protest the injustices of the present, eventually slip into comfortable incumbency, rewarding their loyal servitors with patronage and with loot, just like the ancien regime.

Modern conservatism is built upon another idea. Conservatives believe that you don't need to get your daily bread by force, by conquering the powerful, taking away the surplus they have squirreled away and giving it to your followers. Conservatives believe that the way to thrive is to become useful to other people and to offer your services to them. It believes in the unlikely notion that you can prosper by serving other people better than by dominating them.

The astonishing thing is that anyone, let alone conservatives, believes such a ridiculous notion. Of course you have to fight. Of course you have to protect yourself by attaching yourself to a powerful patron. What other way is there?

Yet people do believe this impossible notion. We believe it because it works. The story of the rise of the bourgeoisie in the last 500 years is the story of the middle class and its culture of trust and service.

In the last 150 years the middle-class culture has ben sorely tried by a new class, the education progressive class. This new class does not believe in trust. It does not believe in service. And it does not believe in limited government.

Conservatives say that if you want to understand the last century then the best way to understand it is as a succession of disasters brought on by the progressive educated class. Boom and bust? The progressive educated class developed the notion that they and their experts could manipulate the business cycle and smooth it out. Health care? The progressive educated class believed that only centralized compulsion could deliver decent health care to the workers and their families. Education? The progressive educated class decided that only a universal compulsory system could deliver literacy and competence to the masses. And so on.

Actually, this system has worked, in its way. It has delivered power and influence to the progressive educated class. All the great heads of government expenditure are programs devised, advocated, and administered by the progressive educated class.

The great mission for conservatives in the coming generation is to bear witness to the monstrous suffering and injustice brought about by the pride and the follies of the progressive educated class.

Conservatives maintain that society would do much better if the progressive educated class would just butt out.

As we struggle out of the Crash of 2008, caused by multiple political interventions to manipulate the business cycle, it is time to stop the conceit of politicians and their experts that they know better than businessmen and financiers how to run the economy.

As we contemplate another huge government intervention in the health care system, it is time to stop the conceit of politicians and activists that they can do a better job of running the health care system that patients and their doctors and nurses.

As we contemplate a century and a half of educational folly, it is time to stop the conceit of politicians and activists that they can do a better job of running the education system than teachers, parents, and students.

When we have done that, then we conservatives can go out into the good night. For our job will be done, and the world will move on.

But until then there is work to be done.

Liberals and Empathy

We know conservatives are outraged by the question of Empathy vs. Justice. But what about liberals? After all, it was Candidate Obama who brought "empathy" onto the national radar when he talked about the importance of empathy in a Supreme Court Justice.

Feminist Wendy Kaminer wrestles with the question over at The Atlantic.

Sonia Sotomayor is either an injudicious advocate of identity politics or candidly realistic about the possibility of entirely objective decision-making.

You are not really supposed to admit that you have biases. But then we all have them.

Admitting such a bias goes against the life-work of Ruth Bader Ginsburg, you see.

In the early 1970s, as founding director of the ACLU Women's Rights Project, Ginsburg led a groundbreaking battle against discriminatory laws that meted out rights or entitlements on the basis of sex and assumptions about characterological, temperamental, and intellectual differences between men and women.

But, as we conservatives have complained, the problem that feminists immediately ran into is that women really are different and really do have special needs in law. So they smuggled discrimination back into the law through the back door. Only now, of course, the new discriminations would have a liberal secular cast rather than the cultural assumptions of a the white patriarchal culture that produced Anglo-Saxon law.

But Kaminer sees a problem in the excitement of the sisterhood over a second woman on the court.

Does the chauvinistic reaction to Sotomayor's nomination represent a repudiation of Ginsburg's fight for equality?

But it's ok. She notes that even Ginsburg has often railed against the insensitivity of the males on the court to feminine sensibilities.

[It took a] Ginsburg to decry the evident inability of her male colleagues to recognize the shame a junior high school girl feels when strip-searched by school administrators who suspect her of hiding advil in her underwear.

The problem is, though, that conservatives don't trust liberals when it comes to "empathy," the special shame that teenage girls may have over strip searching. In our hearts we agree with Ann Coulter when she says:

But all liberals only have empathy for the exact same victims -- always the ones that are represented by powerful liberal interest groups. As Joe Sobran says, it takes a lot of clout to be a victim.

And that means, writes Coulter, that for liberals, "'Empathy'... is nothing but raw political power."

That's because the further you travel from the notion of blindfolded Justice balancing the scales with no thumbs in sight, the closer you inevitably come to simple patronage politics and raw power. Because that's the natural political instinct: to take care of your own.

Empathy and Justice

President Obama spent paragraphs in his introduction of appeals court Judge Sonia Sotomayor telling the Teleprompter how judges should follow the law and not their personal preferences. David Limbaugh was not impressed.

True to form, President Barack Obama... said he was doing one thing while doing the exact opposite. He articulated his criteria for the optimal nominee yet chose someone who falls squarely outside those criteria -- as best we can tell.

That's because, in her speeches and her actions as a judge, Sonia Sotomayor has demonstrated pretty clearly that she belongs to the "empathy" school of jurisprudence. Never mind the law, vote your heart.

Of course, the law has always recognized, in the words of a famous fictional woman lawyer, that the "pound of flesh" in a contract must always be leavened with the quality of mercy. That's because if you bite too hard on the letter of the contract, it will end up biting you back.

But we know what liberals mean by "empathy." They mean that they will put a thumb on the scales of justice to make sure that the result is correct. Sonia Sotomayor understands what it means. That's what the mandatory quote about a "wise Latina woman" is all about. It's OK to upend centuries of white male jurisprudence if it helps the poor and the weak in their struggle with an oppressive world.

If that were all, it wouldn't be so bad. But empathy leads quickly to injustice, as the New Haven firefighters case so conveniently demonstrates. After all, who deserves empathy there? The black firefighters that didn't come close in the promotion exam, or the dyslexic Italian American who studied night and day to pass the exam? Does race trump disability? No doubt the lawyers that prepared the case for the firefighters knew exactly what they were doing in setting up two liberal enthusiasms to fight each other.

I keep coming back to the same point. The progressive educated class has dominated the culture and the public square for the last century. In or out of office they have had the power to enforce their view of government and society upon America. After a while, however idealistic the revolution that brought it to power, a new elite becomes just another ruling class. It is not that they are bad people, although there are always bad applies in the barrel. It is just that an established ruling class becomes insensitive and unable to understand the injustices that they inflict upon the people they rule.

In a way, our liberal masters understand this. That is why President Obama is always saying one thing and doing another. As Rush Limbaugh puts it: liberals can't admit who they are. On this view the Obama campaign and presidency thus far have been masterpieces of misdirection. Yes, he's all for Hope and Change, but his policies mean more of the same Big Government.

In the Wall Street Journal today Bret Stephens invokes the South Park "Gnomes" to explain this. These gnomes are running around South Park episode in 1998 collecting underpants.

What's the big idea? The gnomes explain:

"Phase One: Collect underpants.

"Phase Two: ?

"Phase Three: Profit."

That seems to be the way that the Obama administration works. The all important Phase Two always gets elided. How do we get to actually close Gitmo while keeping those high-value terrorists in custody? How do we lower costs in health care while providing universal coverage. And how do you do "empathy" on the Supreme Court without sacrificing justice?

Go ahead, Mr. President. This is your moment. What is your plan? You do have a plan, don't you?

The trouble is that President Obama really does have a plan. It is bigger government. It is more of the cruel, corrupt, unjust, wasteful, and deluded liberal administrative state.

Understandably, he can't tell us that because if he did, the American people would upchuck him immediately.