A bit of bitter humor about housing mess

Here's humorist P.J. O'Rourke's latest take on the housing crisis. Amazingly, I think he sums it up better than most of our hifalutin' analysts:

"For almost three decades we've been trying to teach average Americans to act like "stakeholders" in their economy. They learned. They're crying and whining for government bailouts just like the billionaire stakeholders in banks and investment houses. Aid, I can assure you, will be forthcoming from President Obama.

Then average Americans will learn the wisdom of Ronald Reagan's statement: "The ten most dangerous words in the English language are, 'I'm from the federal government, and I'm here to help.' " Ask a Katrina survivor.

The left has no idea what's going on in the financial crisis. And I honor their confusion. Jim Jerk down the road from me, with all the cars up on blocks in his front yard, falls behind in his mortgage payments, and the economy of Iceland implodes. I'm missing a few pieces of this puzzle myself.

Under constant political pressure, which went almost unresisted by conservatives, a lot of lousy mortgages that would never be repaid were handed out to Jim Jerk and his drinking buddies and all the ex-wives and single mothers with whom Jim and his pals have littered the nation.

Wall Street looked at the worthless paper and thought, "How can we make a buck off this?" The answer was to wrap it in a bow. Take a wide enough variety of lousy mortgages--some from the East, some from the West, some from the cities, some from the suburbs, some from shacks, some from McMansions--bundle them together and put pressure on the bond rating agencies to do fancy risk management math, and you get a "collateralized debt obligation" with a triple-A rating. Good as cash. Until it wasn't.

Or, put another way, Wall Street was pulling the "room full of horse s--" trick. Brokerages were saying, "We're going to sell you a room full of horse s--. And with that much horse s--, you just know there's a pony in there somewhere."

Anyway, it's no use blaming Wall Street. Blaming Wall Street for being greedy is like scolding defensive linemen for being big and aggressive. The people on Wall Street never claimed to be public servants. They took no oath of office. They're in it for the money. We pay them to be in it for the money. We don't want our retirement accounts to get a 2 percent return. (Although that sounds pretty good at the moment.)

What will destroy our country and us is not the financial crisis but the fact that liberals think the free market is some kind of sect or cult, which conservatives have asked Americans to take on faith. That's not what the free market is. The free market is just a measurement, a device to tell us what people are willing to pay for any given thing at any given moment.

The free market is a bathroom scale. You may hate what you see when you step on the scale. "Jeeze, 230 pounds!" But you can't pass a law making yourself weigh 185. Liberals think you can. And voters--all the voters, right up to the tippy-top corner office of Goldman Sachs--think so too."

Here's the whole thing. It's a longer article about the missteps of the Republican/conservative movement. 

Comments

[JP]

P.J. O'Rourke is an idiot. Please stick to real estate and stay out of politics.

[Brian]

Telling the truth with a comedic flair, is the farthest thing from idiocy. Thanks for the link James.