Childishness and the Housing Bubble

It’s not often that the front page of the New York Times reminds me of Alice Miller, the German phychiatrist who wrote “Prisoners of Childhood,” the book that Al Gore decided was a precise description of his upbringing. The English translation has become a classic as “The Drama of the Gifted Child.”  Apparently, Gore used to hand the book out to everyone he could find, in an odd “if you want to understand me, read this” sort of gesture.  Read it,  and you’ll understand why his campaign peeps suggested he tone it down a bit.  But, I digress.

Anyhow, on Sunday, the NYT ran a front-page piece which lacerates the Bush Administration for its role in inflating the housing bubble.  Among other things, the author accuses the President and his staff of intellectual incuriosity, political boosterism, truth-twisting, and Andover cronyism.  In other words, nothing terribly novel. 

Nonetheless, Administration spokesperson Dana Perino saw much about which to be aggrieved.  She issued a harsh, 500-word statement that accused the Times of everything short of anti-Santa Clausery, including the commission of the ultimate journalistic offense that has lost all its meaning due to overuse:  gross negligence.

It seems appropriate that the three metaphors which come to mind all are firmly rooted in childhood:  the birthday pinata; the boy who cried Wolf; and the game of pin-the-tail-on-the-donkey.

First the pinata.   Rather than churning out flimsy, connect-the-dots journalism of this sort, perhaps the Times should  issue a blanket statement that, if it didn’t have to do with AIDS relief work in Africa, the Bush Administration stunk it up.  Period.  Case closed.  No more candy in that pinata, so go take swings at something else.

As for the Administration and its flaks, surely they now understand that when outrage is your default condition, the public ignores you even when the umbrage you take might actually be justified.   The proceedings long ago acquired the feel of a macabre call-and-response:  “you screwed up,” “NO WE DID NOT AND HOW DARE YOU QUESTION HOW MUCH WE LOVE OUR COUNTRY/MOTHER/KING CHARLES SPANIEL.”  Nobody is listening, Dana; least of all the readers of the NYT.  And unlike the Palin/McCain campaign, the base of voters who despise the vile and corrupt mainstream media has already deserted you.  Read the scorecard:  Nixon 26, Bush 29, Carter 33.  That pretty much says it all.

And finally, since we must blame someone for the housing bubble, where do we pin the tail?  Whereas the Times piece doesn’t say anything which is on its face outrageous or inaccurate, it misses a much larger point.  While the Bush Administration was plenty eager extoll the virtues of an “ownerhsip society,” their enthusiasm wasn’t exactly novel.   “Affordable homeownership” long ago became an archetype of the most dangerous political nostra of all:  one upon which everyone agrees. 

A far more intellectually satisfying–if hopelessly politically incorrect–analysis of the roots of the housing bubble can be found in the work of Stan Liebowitz, a professor at the University of Texas at Dallas and a fellow of the Independent Institute, which I know nothing about but suspect doesn’t trade inside jokes with Brookings.   His “Anatomy of a Train Wreck,” which was brought to my attention by my friend Rob Snyder, traces the inflation of the bubble to the 70s.  It also reminds us that when the words “innovation” and “financial” are used in proximity, it almost always means buying more of something with money that is not the buyer’s; and that in the context of housing, “expansion of opportunity” almost always means loaning money to people who have a pretty fair chance of defaulting. 

I highly recommend it Prof. Liebowitz’s article.

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