Tag Archives: Housing Crisis

Op-Eds and other opinions, Things that are false

The virtue of selfishness

Today's Washington Post features an unreadable article about liberal Hollywood and another one which contains a long and rather stretched analogy between George Bailey of It's a Wonderful Life and the current housing and financial crisis.  I have seen It's a Wonderful Life probably a thousand times, so I'm fairly certain that this analogy is too stretched to be meaningful. I know, but the author's (Ross Douthat) point is something or other, someone may say, and the actual facts of the film don't really matter that much.  They do, I think, because the facts always matter, even if they're fiction.  Douthat writes,

If the global economy survives the autumn and our cable-TV companies are still in business come Christmas, Americans surfing the channels for classic Yuletide movies may finally figure out exactly whom they have to blame for the housing bubble and everything that has followed. Forget the predatory lenders, Wall Street sharks and their government enablers: It all started with George Bailey.

Yes, that George Bailey — the hero of Frank Capra's "It's a Wonderful Life," the most popular man in Bedford Falls, the man so indispensable that he earned a private visitation from a guardian angel just to show him how dreadful a world without him would have been. It's easy to forget, so potent is the supernaturally charged final act of Capra's classic, that before he was visiting looking-glass worlds where he'd never been born or scampering through the snow and shouting "Merry Christmas!" till his lungs burst, Jimmy Stewart's George Bailey was actually a pretty savvy businessman. And it's even easier to forget the precise nature of his business: putting the downscale families of Bedford Falls into homes they couldn't quite afford to buy.

This is the substance of the great war between Bailey and Lionel Barrymore's Mr. Potter, the richest, meanest man in Bedford Falls. Potter is against easy credit and the suburban dream, against the rabble moving out of his tenements and buying homes, while the Bailey Building and Loan exists to make suburbia possible.

Rather unlike the bankers of today, George Bailey didn't make much of any money off of his home loans, nor did he misrepresent the nature of the loans to their recipients, or to the bank's investors, or accountants or the federal bank examiners.  When something went wrong with his bank's accounting system, that is, when Potter stole Uncle Billy's money, George Bailey personally took the blame as the head of the bank. 

Potter, the evil capitalist, might have been skeptical of easy credit.  But he wasn't skeptical out of a sense of financial responsibility.  He was skeptical out of classicism, racism (Garlic eaters!) and a shortsighted devotion to maintaining the status quo, where everyone rented from him and no single person could challenge his financial empire.  

George Will, Straw Man, Things that are false

Built on sand

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George Will compares the housing "crisis" (his scare quotes) to another one of his famous pseudo crises:

The housing perhaps-not-entirely-a-crisis resembles, in one particular, the curious consensus about the global warming "crisis," concerning which, the assumption is: Although Earth's temperature has risen and fallen through many millennia, the temperature was exactly right when, in the 1960s, Al Gore became interested in the subject.

There is a big difference, someone ought to point out, between the "climate" and the "weather" or the "temperature" at any given year.  Suggesting that these are the same–and then pointing out how silly global warming is–is just dumb.  I'm not even sure if this would rise to the standard of the straw man.  At least with the straw man you have to approximate someone's real argument in order to make the deception work.    

Anyway, on the strength of this astounding misunderstanding, Will launches into an a priori, and rhetorical-question-driven, assault on the housing crisis.  He writes: 

Are we to assume that last year, when housing prices were, say, 10 percent higher than they are now, they were exactly right? If so, why is that so? Because the market had set those prices, therefore they were where they belonged? But if the market was the proper arbiter of value then, why is it not the proper arbiter now? Whatever happened to the belief, way back in 2007, that there was a housing "bubble"? Or to the more ancient consensus that, because of, among other things, the deductibility of mortgage interest payments from taxable income, too much American capital flows into the housing stock?

Where's the drooling dunce who holds the position Will ever so skillfully skewers (that's two alliterations) here?  Nowhere I bet.  People may be wrong about the nature of the housing issue–they may even exaggerate it in a bit of political hyperbole–but Will should do us a favor of describing someone's actual position rather than the a priori incoherence of a straw man's position.