The subprime mortgage mess, elite “do as I say” social engineering, and other stories of note…

By Jefferson Flanders

With a tip of the ballcap to legendary New York newspaperman Jimmy Cannon, nobody asked me, but…

EXHIBIT “A” FOR HOW GREED MAKES RATIONAL PEOPLE DO IRRATIONAL THINGS: the subprime mortgage mess. It has become a growing crisis, roiling financial markets in America and elsewhere and threatening hedge funds with large holdings in the risky investments. Mortgage lenders, investment banks, due diligence firms, credit rating agencies, and investors played a game of high-stakes financial musical chairs over the past several years with subprime mortgages; it’s becoming apparent that many of the players knew that there were major problems with the home loans extended to low-credit borrowers, but were too greedy to act responsibly and end or exit the game.

A worrisome development is, as Business Week reports, the potential for the subprime crisis to spread:

Through the rest of this year and into next, a raft of adjustable-rate mortgages will begin adjusting to higher interest rates. The higher monthly payments could squeeze even borrowers with good credit histories, leading to a new round of mortgage defaults.

At the heart of this crisis: an easy credit boom (or bubble) with far too many mortgage brokers writing adjustable loans (ARMs) for unsuspecting borrowers with poor credit histories or limited income, and far too many investment banks and investors “securitizing” these shaky mortgages. The consequences: delinquencies, defaults and foreclosures in the U.S. housing market and concerns now about global credit markets.

AN EXAMPLE OF ELITIST “DO AS I SAY” ON DISPLAY IN Massachusetts, as white parents in the People’s Republic of Cambridge shy away from public schools with “too many minorities,” according to a story in the Boston Globe. Cambridge has tried to keep its’ schools racially integrated by a system that uses family income, not race, but the Globe reports: “the efforts to diversify schools have only been able to go so far because Cambridge allows parents to choose from all city schools.”

And when Cambridge’s upper income white parents (mostly Democratic and liberal), who are generally in favor of social engineering in theory, are given the choice, they have voted with their feet—slighting schools with higher levels of blacks and other minorities. One parent commented to the Globe: “If you’re not teaching these kids at a young age not to discriminate and if their parents are saying, ‘I don’t want my children to go to school with your children,’ what happens when they grow up and become in positions of power in politics?”

SWEET LAND IS A QUIET LITTLE LOVE STORY set in the Upper Midwest, made by independent director Ali Selim in 2005, and just now available on DVD. The film focuses on a 1920’s Minnesota farming community and the conflicts that arise when an undocumented German woman (played by the luminous Elizabeth Reaser), arrives to marry a Norwegian-American farmer (Tim Guinee). Based on a short story by Will Weaver “A Gravestone Made of Wheat,” Selim’s minimalist directing and David Tumblety’s evocative cinematography makes Sweet Land a memorable consideration of love, family and identity in small-town America.

THREE CHEERS FOR ONE-TIME JIHADIST MANSOUR AL-NOGAIDAN, now a moderate Muslim who writes for the Bahraini newspaper Al-Waqt, and his courageous call for Islamic religious reform. Ignoring death threats, al-Nogaidan has publicly argued that Islam needs a Martin Luther figure to lead an overdue Reformation. He wrote recently in the Washington Post (in an opinion piece entitled “Losing My Jihadism“):

Muslims are too rigid in our adherence to old, literal interpretations of the Koran. It’s time for many verses — especially those having to do with relations between Islam and other religions — to be reinterpreted in favor of a more modern Islam. It’s time to accept that God loves the faithful of all religions. It’s time for Muslims to question our leaders and their strict teachings, to reach our own understanding of the prophet’s words and to call for a bold renewal of our faith as a faith of goodwill, of peace and of light.

What caused al-Nogaidan to abandon extremism? He cites two books (one by a Palestinian scholar, the other by a Moroccan philosopher) that encouraged him to re-examine the rigid theology he had embraced. It raises this question: would encouraging cultural and intellectual engagement between the West and moderate Islamists prove a better-long term strategy than one focused on military and diplomatic levers?

THERE IS SOME IRONY TO BE FOUND IN THE REASONS FOR JOHN McCAIN’S failure to catch fire in the 2008 presidential campaign. Lauded in 2000 by the news media for his “straight talk,” McCain’s candor hasn’t been as appreciated by many of his former admirers when it has been exercised in defense of the American occupation of Iraq. And yet, it can be argued, McCain is just displaying the very maverick qualities that many journalists found appealing when he was pushing for campaign finance reform or battling the Christian Right.

CONSIDER THE CARPENTERS UNION AS CLUELESS WHEN IT COMES TO PR, based on the Washington Post story entitled “Outsourcing the Picket Line; Carpenters Union Hires Homeless to Stage Protests.” The Post reporter, Keith L. Alexander, explains that a local of the The United Brotherhood of Carpenters and Joiners of America has been employing non-union “hired feet” to walk the picket line in Washington, D.C. Alexander quotes another union official, who doesn’t like the practice, to explain why it isn’t a great idea (at least if you are sympathetic to organized labor):

“If I was a member of the general public, and I asked someone picketing why they were there, and they said they don’t work for the union and they were just hired to stand there, that wouldn’t create a very positive impression on me, nor would it create a very sympathetic position,” said Wayne Ranick, spokesman for the United Steelworkers of America.

Ranick gets it (loud and clear); why don’t the leaders of the Carpenters Union, who ducked calls from the Post, understand how damaging paid picketers are to the image of the labor movement?

NEITHER RED NOR BLUE HAS ATTRACTED ATTENTION FROM VARIED QUARTERS OF LATE. In Macleans.ca, Jaime Weinman quoted from NRNB’s “Campaign songs and the candidate” in his piece entitled “You and I: Clinton, Dion in 2008!“; a website dedicated to Whittaker Chambers, the conservative anti-Communist icon of the 1950s, linked to “Wilder Foote and ‘The Mystery of Ales’“; and the Foundation for Critical Thinking alerted its visitors to “Clear Thinking, Clear Writing.” Perhaps the Internet does create strange Web fellows…

AMERICAN TRANSCENDENTALIST RALPH WALDO EMERSON is author of this month’s words of wisdom: “Put the argument into a concrete shape, into an image, some hard phrase, round and solid as a ball, which they can see and handle and carry home with them, and the cause is half won.”

Reprinted from Neither Red nor Blue

Copyright © 2007 Jefferson Flanders
All rights reserved

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