Morgensen’s and Rosner’s new book appears to have breathed new life into claims that responsibility for the housing bubble can be laid at the feet of Democrats, ACORN, and Fannie and Freddie. Given that buyers of the book at Amazon are also snatching up works by Ann Coulter, Glenn Beck, and Andrew Breitbart, I’m pretty sure that it is on its way to becoming the housing-bubble bible for all those who also are learning how Constantine’s conversion to Christianity and the Battle of Poitiers were key “tipping points” in the history of human freedom.
It strikes me as unlikely that a closer chronicle of the shady political dealings surrounding housing policy in the 1990s tells us very much new about the causes of the bubble. But I find it interesting that conservatives are so gleeful about their account because it implicates a lot of Democrats. As a partisan matter, that’s obviously of interest. But as a policy matter? It seems odd that conservatives would be so eager to swallow a story ultimately more consonant with progressive goals than their own.
The underlying problems here center around deregulation (including the loosening of lending standards), a federal reserve that refused to exercise oversight or take steps to deal with a growing bubble, and the influence of moneyed interests on policy. The drive to extend homeownership to poor minorities who had, because of discriminatory practices, been excluded from access to housing equity, certainly played a role here, e.g., it led to some well-intentioned policies that soon became co-opted by housing lenders.
But without those other mechanisms we can’t really get from the “progressive” policy (more homeownership for poor minorities) to the current economic crisis, and those mechanisms are overwhelmingly ones that progressives, rather than conservatives, want to address. Indeed, can overwhelming proportion of the failures attributed to the Clinton administration stem from its tack rightward on financial and regulatory policy. The bad behavior of Democrats largely centers around their pursuit of corporate cash.
However desperately folks like Mead may try to link this to a general criticism of third way politics, the core “problems” have little to do with the progressive elements of that fusion.* Conservative policies aren’t designed to rectify these failures, but to entrench them in American politics and policy.
*The giveaway? One of Mead’s examples of a “third way scheme” discredited by Morgensen’s and Rosner’s account of the housing bubble is the “cap-and-trade” approach to reducing carbon emissions. But the cap-and-trade approach was embraced by progressives in an attempt to find common ground with conservatives, who generally supported the approach until Obama proposed it.**
**While I’m on the subject of Mead, I remember how every “economic collapse” scenario from when I debated in high school (c. 1991) culminated with a quotation from him about how a major economic slump would lead to outbreaks of interstate conflict around the globe. As it obviously did. Just look at all those interstate wars in, er, well, uh….