Financial Crisis is Our Fault, too
“How the Democrats Created the Financial Crisis” by Kevin Hassett is getting heavy play in conservative circles (talk radio, the blogosphere), mostly because it is both an accurate piece of the story and attractively partisan. However, Victor Davis Hanson reminds us that, while there is plenty of blame to put on Wall Street and Washington, we also need to look in the mirror.
For two decades, we — as in we Americans — expected to buy homes, flip them, and walk away with thousands — without much thought about what might happen to the johnny-come-lately at the bottom of the pyramid when the game was finally up and housing prices cooled or crashed. Walking away from a mortgage on a house with negative equity was “smart;” putting someone in one who had no ability to come up with a down payment, monthly payments, taxes, and maintenance was “fair”; borrowing unduly against equity for cash expenditures was “understandable.”
We deified the masters of hedge funds, derivatives, and subprime mortgages, forgetting that passé oil production, mining, farming, manufacturing, engineering and construction were the real sources of our material wealth.
We assumed mega-returns on our portfolios, without a thought what Wall Street did to get them, or the effect on others who needed to borrow at such high interest to run their businesses.
Ours became a culture that wanted larger cars but less drilling to fuel them, more stuff and more credit from — and more anger at — the Chinese; less taxes but even more government hand-outs; ever more electricity, but fewer icky coal and nuclear plants — and always more health-care, education-care, prescription drug-care, housing-care, and always less care how to pay for it.
So by all means let us prosecute the lawbreakers, finger-point at the enablers, lecture the stupid, but at least spare us the sanctimonious “they” did this to poor “us.” If there were not a Senate Banking Chairman like Chris Dodd without shame cozying up to the creeps at Freddie Mac and Fannie Mae, or a Richard Fuld playing casino roulette with someone else’s money, we would have had to invent them.
But it’s easier to blame someone else, right? Yes, I know that some of Hanson’s litany could be attributed to what some would disdainfully consider “free market capitalism,” but look again and you’ll see government’s hand in all of it, too. We want it all with no risk to ourselves while expecting government to bail us out for our poor choices. And the people who are left to foot the bill are those who either made the right choices in the first place or are willing to take responsibility for not. In short, those who don’t regard government as the cure of all ills will be paying the bill for those who do.