Friday, December 12, 2008

Who Speaks for the Right?

As to the financial meltdown:

The essential problem with the sub-prime loans was that the market value of the underlying asset could not be sustained forever on the willingness of buyers to pay ever higher prices, on the assumption that prices would continue to rise.

A view of Fannie Mae headquarters is seen in this July 14, 2008 file photo in Washington, DC.Why did investors and lenders operate on the assumption that market prices for housing would continue to rise?

So long as Freddie and Fannie would buy the loans without verifying the ability of mortgagors to pay them off with current income or other assets, there was no incentive to perform due diligence, to verify income, no need to require a down-payment.

Where were the normal checks of free-market capitalism? Does anyone actually believe lenders would behave the way they've behaved during the real-estate boom, if they did not have two government agencies willing to buy whatever was offered? Asked in another way, how many lenders do you suppose would write no-money down deals without verifying income if they were to keep such loans in their own portfolios?

Who is the politician who can make this clear and defend capitalism?

As to the Republicans:

The Republicans lost for a lot of very good and understandable reasons. First and foremost, Republicans have given Americans some very bad government recently. Yes, there were some Republicans, including President Bush, who posted warnings. But what did Republicans do?

The principal disaster of the Bush Administration was the overwhelming and unaccountable failure to exercise leadership, to give an articulate voice for those Americans who believe the United States government is a government of limited powers delegated to it by the states and by the people, and that government is best that tries to perform its specific constitutional duties of providing for the common defense, rather than "reform" society according to the latest and best theories put forth by the liberal social engineers that constitute the Democratic Party.

The other disaster of the Bush Administration was its spending public money recklessly, extravagantly, and with utter disregard and contempt for the idea of limited government. Not once did the Bush Administration even threaten to veto Congressional approved spending bills, at least while Republicans ran the House and Senate.

Click to view image detailsOne has to ask, as I did while the Bush Administration's basic trajectory was becoming clear, where is the political constituency for the big government Bush advocated? Social conservatives, economic libertarians and national defense hawks form the basis of the current Republican Party and Bush sought to appeal only to Social Conservatives and hawks. If any proof were needed of the importance of economic philosophy to a party's electoral success, we have it here.

Over the years of the Bush Administration I have spoken with many ordinary Republicans who became appalled by Bush's spend-without-consequence philosophy. It is rather difficult now, to oppose the spending plans of Mr. Obama, whatever they may be, because Republicans, under Mr. Bush, have completely and totally surrendered the tax issue, a marker for smaller, more limited government, to Obama and the Democrats, who promised a tax break to 95% of all Americans.

The American people may be mistaken to trust Obama and the Democrats with the responsibility of creating smaller and more effective government, but electing Obama was the only way to rid the country of the despised Republicans whose nominee only national defense hawks could respect, who went out of his way to insult social conservatives, and demonstrated complete contempt for economics by declaring he didn't know anything about the subject.

Even then he managed to get 46% of the vote. What would have happened had a candidate of the Right been the nominee, a candidate who was pro-life, pro-national defense, and pro-laissez-faire?

He (or she) would have won.

Tom Anderson
December 2008

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