The Bigger Big Picture

One of the things I love about the age of the Internet is that we are no longer beholden to a single version of any given story. One who pays attention to this dynamic over a period of time comes to the conclusion that there is no one truth, no really objective voice out there. Unless you want to be content being spoon-fed by your favorite information provider, curiosity and intellectual rigor are required in order to come to reasonable, satisfying conclusions.

Take the current so-called economic "crisis". I have heard Barak Obama and other Democrats say that Republicans' penchant for deregulation has been the root cause of the irresponsible lending and opaque securitizing that led to our present difficulties. Interestingly enough, Republicans tried repeatedly in the last 15 years to increase regulation of Fannie Mae and Freddie Mac, only to be blocked at every turn by Democrats. Why would Democrats block stricter regulation of these government sponsored enterprises? They blocked regulation because they felt they had fought hard to ensure fairer mortgage lending to Americans through the various incarnations of the Community Reinvestment Act. Tightening Freddie and Fanny's capitalization requirements would have required stricter lending policies which were seen at the time to be a euphemism for denying credit access to under-served portions of the population.

Why were Democrats concerned that stricter lending policies would put fair house ownership opportunity in danger? Because stricter lending laws _had_ been used for this purpose in the past. The Community Reinvestment Act was sponsored in 1977 to counteract the practice of something called "redlining". Until then, many lending institutions would literally draw lines around low-income communities on municipal maps in red pen and automatically deny mortgage applications from these areas. This lazy, crude strategy for financial risk management meant that lower income whites were able to get loans that middle or upper income blacks and latinos could not obtain. Which tends to piss you off if you happen to be in the latter category.

Obviously, we could continue further back in history to see more examples of this kind of back and forth, but these two snippets are enough for the point I'd like to make: In both of these cases (lenders unfairly redlining and politicians being unwilling to effectively regulate) we have a group of people who were paralyzed from doing what was clearly reasonable due to an irrational fear that any movement in the "opposite" direction would cause some kind of cascading domino effect to an undesired outcome. What is ironic is that, in both examples, it was not the perceived enemy, but their own misguided obstinance that produced an outcome they were hoping to avoid.

Bankers have no one to blame for disruptive community organizations like ACORN but themselves. Indeed, they produced them. And Congressional Democrats could do well to take to heart the words of one of their own, Rep. Arthur Davis of Alabama, who recently said, "Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong."

What I am interested in is that we as a nation (and as a species) make progress toward noticing this tendency to irrational obstinancy and interrupt the pattern. It is not sufficient in any particular circumstance to say, "This is the situation I find myself in, I guess I'll just perpetuate it." It takes guts and a determination to transcend the mental paths of least resistance so that we can create the kind of world we'd all rather have. But nothing less that this makes anything worthwile of us.