Radical Right Reality Check

And the right wing’s absurd attempt to blame the subprime mortgage crisis on borrowers

By Rob Schofield

Next month, one of Raleigh’s market fundamentalist “think” tanks will hold an event in Charlotte at which it will charge attendees $60 to hear from George Will. For the sake of those in attendance, let’s hope they’re serving a pretty good meal.

Will, of course, is the longtime designated right winger at the Washington Post Company and one of the high priests anointed by the Powers That Be to pontificate on all things public and political on Sunday morning television.

Throughout most of his career as an “opinion journalist,” “Reverend” Will has been the quintessential modern, establishment figure – spouting a dour and unrepentant affinity for 19^th Century Victorian values that appeals to both the oligarchs of the corporate establishment and the wacky, nativist, right. 

Will has parlayed his position with the Post and on TV to become a close confidant to powerful Republican politicians and elected officials – most notably Ronald Reagan, who he infamously and inappropriately prepped for his debate with Jimmy Carter and whose administration employed Will’s first wife as an administrator and his second as a speechwriter.

Increasingly out of touch

Like most right wing observers, Will has occasionally hit the mark every now and then – particularly early in his career when he was exposing some excesses or malfeasances of the bureaucracy. Some of his criticisms of the war in Iraq have also been on the mark and he and his first wife did some useful work on behalf of persons with disabilities after their son was born with Down syndrome.

For the most part, however, Will sticks to the same tried and untrue formula with numbing frequency: “Free” markets are always good and government attempts to “intervene” are almost always bad – especially when designed to help people who should, according to the Right Reverend, be pulling themselves up by their own bootstraps. Mix this premise with a heavy dose of sniffy, holier than thou, impatience for anyone unable to negotiate the market maze on their own and you’ve got a typical sermon from Pastor George.

As classic case in point is Will’s most recent column on the mortgage foreclosure mess. The column ran in the Post under the headline “The New Entitlement.” The Raleigh News & Observer entitled the piece “In search of mortgage ‘victims’.” His thesis: it’s folly to bring the power of the government to bear in order to help subprime borrowers whose loans have recently crashed on the rocks of declining home prices and ballooning adjustable interest rates – especially given the support for such action by one of his favorite bogeypersons, Hillary Clinton.

Like his local brethren at the Locke and Pope-Civitas shops, Will reckons that any effort to regulate the lending industry is merely a pretext by which “statist” politicians seek to pursue their ultimate, burning desire – to micromanage everyone’s life.

“Clinton perhaps regrets that the plan President Bush has enabled and endorsed is voluntary. Today’s liberalism, combining tolerance and statism, cares less what happens than that it be mandatory.”

According to Archbishop Will, the current mortgage foreclosure crisis is plainly the fault of no one but those greedy and slovenly heathen, i.e. the subprime borrowers themselves, who should’ve known the likelihood that they would be struck down for their own good by the vengeful and wrathful god of the Market.

“Perhaps Washington’s intervention in the subprime problem reveals the tiny tip of an enormous new entitlement: People who voluntarily run a risk, betting that they will escape unscathed, are entitled to government-organized amelioration when they lose their bets. The costs of this entitlement will include new ambiguities in the concepts of contracts and private property.”

The notion that borrowers might’ve been duped into their absurdly overpriced loans by low, “teaser” interest rates, hidden fees, outrageously complex contracts and prevaricating mortgage brokers is simply too much for his eminence to countenance.

“Jesse Jackson speaks of ‘victims of aggressive mortgage brokers.’ But given that foreclosure is usually a net loss for all parties to the transaction, what explains the ‘aggression’? Who thought it was in their interest to do the luring and leading that Clinton alleges?”      

In other words, “Tough it out you miserable peons. All is fair in love and war and the free market. If you ‘worship’ properly and are lucky, maybe you too can take advantage of someone yourself someday.”  

Reality Check

Will’s column is a classic example of what happens when someone – be it a politician or an academic or an “opinion journalist” –  has been on the inside so long that they become infatuated with the sound of their own voice and forget to look at (or remember) the facts. As even a brief review of the current mortgage foreclosure crisis makes clear, the ongoing meltdown is the result of one overriding cause: an inadequately regulated market.

Who thought it was in their interest to do the luring and leading Clinton alleges? asks Will. Good grief George, read your own newspaper! How about the gosh-darned mortgage brokers who sold the loans and the predatory lenders who laundered them? Those are the first two that come to mind. 

Sure, many borrowers and would-be homeowners (perhaps millions of them) have gotten into mortgage deals that they should have never considered. Save for the odd sophisticated and well-heeled consumer, it’s hard to imagine anyone that should ever consider a “2/28 loan” (in which the interest rate spikes after two years) or one that’s loaded with tons of hidden fees that provide a windfall to the broker who gets the consumer into the deal in the first place.

Yes, many borrowers might well have guessed that the deals they were signing up for (often on the hood of a broker’s car) were too good to be true. But, of course, the same is true for any number of abusive market practices that civilized societies long ago made unlawful.

The central premise of Father George’s blessed “free” market is that bargainers will have relatively equal amounts of information. When and where this is not the case, it is essential for public institutions to provide regulation so that the two parties will be on something akin to even terms. That’s why we have (or had at one time) meat inspectors and airplane safety rules and truth-in-lending laws.

While it seems all but certain that Will doesn’t have a mortgage now (at least not on homes one, two or three) it’s an equally sure thing that when he did, there was no way that he understood each and every term of the agreement – even though he assuredly hoped and expected to profit from the transaction over time. Instead, he trusted the professionals that helped him and the public bodies that regulated those professionals; just like today’s subprime borrowers – most of whom, of course, don’t have a PhD or a gig as a high paid columnist and advisor to the powerful.

Given this fact, one has to wonder what Will’s position would have been had his mortgage turned out to be a rip-off for which there was no remedy. Would he have chalked it up to tough, free market love? It seems unlikely.

Pass the Pepto

In light of the nature of the event, it is doubtful that the Reverend will receive many tough questions when he comes to preach in Charlotte next month – much less learn anything about the city’s ongoing foreclosure boom or the lives it is ruining. In all likelihood, the event will feature a heavy serving of pious self-congratulations about the importance of the “free market” and the notion that, if the other George made any mistakes over the last seven years, it was in his inadequate devotion to the infallible directives of Milton Friedman and the other members of the supply side college of cardinals. The appearance will then, in all likelihood, be dutifully reported by star struck reporters and endlessly flogged by the local sponsors.

Those with sensitive stomachs are urged to take precautions.    

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This entry was posted on Friday, December 21st, 2007 at 9:56 am and is filed under Radical Right Reality Check. You can follow any responses to this entry through the RSS 2.0 feed.