The Sovereign Mind

Free thought on politics and real life

Orson Scott Card: Democrats Caused the Housing Crisis

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I am always impressed with independent thinkers, which is what I strive to be, if you haven’t figured that out by the title of my blog.  This is probably why I was very impressed with Colin Powell’s endorsement of Barack Obama.  It wasn’t just the fact that Powell endorsed a Democrat, but I thought his explanation was extremely well thought-out, and showed that he had made the decision for the right reasons, without relying on any partisan talking-points (although some disagree with me on that).

Today my attention was drawn to an article by another independent thinker: Orson Scott Card. Although a Democrat, he has written articles before criticizing his own party. But this one’s a doozy:

This housing crisis didn’t come out of nowhere. It was not a vague emanation of the evil Bush administration.

It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people. Fannie Mae and Freddie Mac were authorized to approve risky loans.

What is a risky loan? It’s a loan that the recipient is likely not to be able to repay.

The goal of this rule change was to help the poor — which especially would help members of minority groups. But how does it help these people to give them a loan that they can’t repay? They get into a house, yes, but when they can’t make the payments, they lose the house — along with their credit rating.

They end up worse off than before.

This was completely foreseeable and in fact many people did foresee it. One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules. The other party blocked every such attempt and tried to loosen them.

He goes on in his scathing criticism of both the Democratic party, as well as the media for failing to report on the facts of the story.

I believe he is right as far as the media goes. Journalists have, for the most part, gotten lazy. It seems most prefer to regurgitate what some other news story said, rather than do real research. That’s no more apparent than in the current election, where the news only reports the horse race, rather than talking about real issues.

However, as far as the Democratic party goes, I think he goes a bit too far. I do agree with him that McCain and Bush did try to pass stricter regulation on Fannie and Freddie. But I don’t think it’s 100% accurate to say that the failure to do so was all the Democrats’ fault. After all, Republicans were in charge of Congress at the time. The bill passed the committee vote 9 to 11 (down party lines, with Republicans favoring the bill to add more regulation), but the Republican leadership did not bring it up for a full vote, despite McCain’s attempt to revive it by becoming a co-sponsor. You could argue that Republicans didn’t because they knew it would fail since no Democrats supported it. So there’s room for debate, but at least I don’t think it’s as cut-and-dry and Card suggests.

Additionally, his column points out that all of this started under Clinton. That is true, but Republicans had six years to correct it, and failed to do so. It seems there is plenty of blame to go around.

Still, I credit him for at least thinking for himself and holding his own party accountable. We could use a lot more of that.

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Written by Mike

October 22, 2008 at 10:17 pm

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