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A short-lived brilliant idea
(Note: Some people, like James N. below, have a much more radical view of this crisis. Talk about being mad as hell and not wanting to take it any more.)
I was about to say, if they want to make a deal that will get more Republicans on board to pass the bailout, how about repealing the 1977 Community Reinvestment Act and its various amendments and regulations and offshoots that push or require or help banks to give mortgages to uncreditworthy persons?
That would surely get some additional Republicans to vote for the package. But it would surely push a lot of Democrats away. For Democrats to give up the CRA and subprime mortgages would be the equivalent of giving up Brown v. Board, giving up the 1964 Civil Rights Act, giving up the Equal Opportunity Commission, giving up affirmative action, giving up Title IX, giving up any major piece of the infrastructure of modern liberal society. And the liberals will never do that, until, perhaps, the society literally crashes as a result of liberalism.
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Ron K. writes:
You wrote, “I was about to say, if they want to make a deal … how about repealing the 1977 Community Reinvestment Act … ?”
You’re not the only one thinking about the Republican rump leveraging its power. This even better proposal was posted (anonymously) on Steve Sailer’s blog:
How about this trade:
- End of birthright citizenship Immigration from all categories restricted to 200,000 per year
- End of judicial review of immigration policies (immigration judges can not grant citizenship nor prevent deportation)
- Mandated use of E-verify for all employers
- 287 (g) programs for all jurisdictions
- End of all government benefits and subsidies for all noncitizens
- End of all guest worker visas
In exchange for
That seems like a fair trade.
Now, either of these deals are good, but imagine putting both out there, and letting them compete? Offer your proposal to the Mexiphiles in the House, and the other to the CBC and its allies, and see who bites first. Even if it fails, the resultant squirming should be most entertaining to watch!
Ben W. writes:
LA wrote: “Until, perhaps, the society literally crashes as a result of liberalism.”
I for one am quite willing for our financial structure to collapse and take down with it anything attached to or dependant upon it. Then let the country rebuild itself from scratch on principles that can work rather than on liberal illusions.
Like the false immigration bill, the American people have told their representatives, “No bailout.” Let the whole damned house of cards come down and let’s see what endures and what is enduring. I have no interest in “coming together for the sake of the country” with a bunch of people who took my money in the first place and gave it to others who did not earn it. Let it crash—the good will survive and rebuild.
LA replies:
Have we reached the John Galt moment?
LA writes:
Speaking of which, S. Trifkovic writes:
The Big One Is Nigh!
“The global economy is like the St. Andreas Fault: You know that a terminal disaster is inevitable, but you keep your fingers crossed and try not to think about it,” I wrote in the print issue of Chronicles seven months ago (“Waiting for the Big One,” March 2008). “When a tremor occurs, you often fear it could be the Big One and sometimes panic,” I went on, “but then, when the dust settles, you sigh with relief to find yourself alive and the Golden State still above the ocean.” Well, the Big One is nigh; and here’s the rest of that old column in which I argue that, in the end, the meltdown may be all for the best…
James N. writes:
Count me among those who say, “Let it collapse.” Of course, I can say this because I believe the “system” is already insolvent and the techniques used to obscure that fact are destructive of self-government and Liberty. Here’s an exchange on Free Republic between myself and a FReeper whose handle is “politicalmerc”:
politicalmere:
If they start doing that we are FINISHED. There is no where near enough money in banks to withstand large withdrawals. We must fix this crisis. This is not a drill. This is not a hoax. If we do not fix this, there will be no economy and even those who are piously proud of their fiscal responsibility will be BROKE.
James N.:
Get a grip.
Was there “no economy” before 1913?
As a matter of fact, the greatest nation on earth was created and built without the Federal Reserve, without 401(k) and 403(b) accounts, without an income tax, without credit swaps or derivatives, and without ANY significant federal intrusion into the real economy.
The economy to which you refer (as in “there will be no economy”) is a fraud and a scam, consisting of people moving around frantically doing nothing of importance while exchanging little green slips of paper and acquiring things which, for the most part, have no value. The ACTUAL economy, which is the sum of our invention, resource exploitation, and production plus the mutually beneficial exchanges among free people which happen in consequence has been savaged by your illusory “economy.” The sooner the “economy” which exists as a result of nonproductive and noncreative fiscal maneuvers with phony money is destroyed, the better.
The destruction of the Federal Reserve and its associated bloodsucking fiscal devices is the greatest blow for Liberty which could possibly occur in our lifetimes. It will pull down the whole rotten structure of income taxation, wealth redistribution, payments and rewards for nonproductive activity, and unconstitutional government, and it can’t come fast enough.
Burn, baby, burn!
James N. writes:
In my FR post which you so kindly cross-posted on VFR, I capitalized the word “Liberty.” You corrected me and placed the “L” in lower case.
I do this under certain circumstances, because it is capitalized in the Preamble to the United States Constitution (“…to secure the Blessings of Liberty to ourselves and our Posterity”). I tend to use the caps when I am referring to the IDEA of Liberty in the American political system (and I capitalize the People for the same reason).
I’m flattered that you refer to my ideas as “much more radical” than your own. Because I am not a radical in the political sense about social issues, I’ve been feeling sort of inferior to you, Gintas, Howard Sutherland, and others.
But in the originalist Constitutional sense, I take a back seat to no one. When we are talking about what’s wrong politically, and what’s needed, I am a FANATIC. Thanks for the compliment.
LA replies:
Ok, Mr. 18th century capitalization, I’ve restored the two “Libertys.”
James N. replies:
What better century for rules?
October 1
Andrew E. writes:
I am in sympathy with much of what James N. says here. The Federal Reserve is what makes it possible for banks to leverage themselves 20 or 30 times over, leveraged to such an extent that a substantial downturn in the value of one class of their total asset holdings, sub-prime mortgages, could unravel the whole structure and bring it crashing down. The Federal Reserve is necessary for the government to maintain its chronic budget deficits. Without control of the money supply the government could never grow as big as it has. The growth of government and its chronic deficits is what has destroyed our national savings and capital accumulation which in turn is what has hollowed out our industrial might and sent it overseas instead. The Federal Reserve rigs the game in favor of banking professions which is why so many college graduates (myself included I admit) find their way to Wall Street to work in jobs doing nothing more than devising more clever ways to write IOUs to one another as James N. mentions.
I only hope that when the system does crumble, and I feel it eventually must, bailout or no, there’s someone there among the rubble to advocate for sound money.
Ben W. writes:
The following supports James N.”s statement that, “The sooner the “economy” which exists as a result of nonproductive and noncreative fiscal maneuvers with phony money is destroyed, the better.”
“For decades, Austrian School economists have warned against the dire consequences of having a central banking system based on fiat money, money that is not grounded on any commodity like gold and can easily be manipulated. In addition to its obvious disadvantages (price inflation, debasement of the currency, etc.), easy credit and artificially low interest rates send wrong signals to investors and exacerbate business cycles.
Not only is the central bank constantly creating money out of thin air, but the fractional reserve system allows financial institutions to increase credit many times over. When money creation is sustained, a financial bubble begins to feed on itself, higher prices allowing the owners of inflated titles to spend and borrow more, leading to more credit creation and to even higher prices.”
This also supports Lawrence Auster’s point (made many times at VFR) that liberals have a view that money and economic resources (and subsequent social progress) appear “out of thin air” and can be made widely available to everyone at no intrinsic cost to anyone.
Ben W. writes:
Trifkovic’s article is worth a read, he focuses on the character of our people and not on technical details of the system. The second half, which I’ve included here, is a meditation on how liberalism could be discredited.
Keeping the markets oxygenated with billions of “our” dollars will not save them in the long term, however, because the malaise is moral and spiritual. Just like under San Andreas, the plates move past each other, producing cumulative strain. The Fault that will produce the global meltdown is the gap between the postmodern heart and mind, the impossibility of ever consuming enough goods and services to feel sated, and the unwillingness to settle the bill for those goods and services in cash. When mere servicing of the ever-growing tab leaves nothing for further consumption, however, the end will be nigh:
“The merchants of the earth will weep and mourn over her because no one buys their cargoes anymore—cargoes of gold, silver, precious stones and perils; fine linen, purple, silk and scarlet cloth; every sort of citron wood, and articles of every kind made of ivory, costly wood, bronze, iron and marble; cargoes of cinnamon and spice, of incense, myrrh and frankincense, of wine and olive oil, of fine flour and wheat; cattle and sheep; horses and carriages; and bodies and souls of men.” (Revelation 18:11–13)
If reasonable men agree that our civilization is spiritually diseased, morally rotten and demographically moribund, then a colossal, rapidly spreading global economic crisis should be neither feared nor wished away. It may yet be our last best hope for survival.
The meltdown has to be rapid and brutal, however. Only the collapse of hoi polloi confidence in the ability of the all-pervasive State to manage relief would force blighted billions to re-examine their lives and their assumptions. By getting no relief from the collapsing State (including the European Union, the World Bank, the IMF, or Oxfam) they would rediscover self-reliance—or die. Being disillusioned by progress, they would rediscover the value and force of tradition. The ensuing struggle for diminishing resources may make them drop the neurotic becoming in favor of just being—that is, surviving. The Hobbesian mayhem in New Orleans after Katrina offered a glimpse of what is to come.
A predictable benefit for the survivors would be the return of fertility to historically normal levels. Even in darkest Tuscany or the Upper East Side, children would no longer be seen as a burden, an obstancle to self-fulfilment, and a financial liability. In the aftermath of the burst bubble, they would regain their traditional value as economic assets and the long-term substitute for collapsed welfare programs, entitlements, and pension systems. The family would reemerge as the essential social unit. Amid collapsing political structures all ideological “propositions” would be recognized as empty abstracts. Communities linked to their native soil and bonded by kinship, memory, language, faith, and myth would be revived. And in adversity, the eyes of men would be lifted, once again, to Heaven.
We do not know when this will happen, just as we don’t know when San Francisco will turn into rubble; but when it happens—and it will happen—the American interest demands that it takes the form of a short, sharp shock, utterly unmanageable by the ruling political and economic elite that is destroying us.
Posted by Lawrence Auster at September 30, 2008 01:18 AM | Send
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