| Advertisement |
With Wednesday being the original deadline for a report by the Financial Crisis Inquiry Commission, there's still time to ponder what the commission will say. While the commission has pushed back the release date until January for its formal report, Republicans on the commission have already written their own spin on the root causes of the financial crisis, copies of which have been dutifully passed along to The New York Times.
Advertisement
The Republican version and the clear bipartisan split on the 10-member panel is, without question, economically moot, which is to say two plus three equals five just as often as three plus two. From a policy perspective, however, whether the chicken or the egg came first in this case has vast implications.
The Republicans on the panel said, "While the housing bubble, the financial crisis and the recession are surely interrelated events, we do not believe that the housing bubble was a sufficient condition for the financial crisis," the Times reported.
The 13-page synopsis of the Republican viewpoint states, "The unprecedented number of subprime and other weak mortgages in this bubble set it and its effect apart from others in the past," referring to previous economic predicaments.
In short, Democrats are focusing their blame on bankers who dropped the ball. Republicans are focusing on decades-long government policies that supported home ownership, even the creation and subsequent mismanagement at the Federal Home Loan Mortgage Corp. and the Federal National Mortgage Association -- Freddie Mac and Fannie Mae -- which set the tone in mortgage lending with charters that declare home ownership a positive advancement for society.
Studies show home ownership is good for neighborhoods and provides economic incentive for individuals. At some point, it should be questioned why Republicans would undermine the validity of such a widely held doctrine. The idea that every nesting family should own its nest runs deep in the pioneer spirit.
In part, the 2008 financial crisis and the prolonged recession that followed becomes a cultural problem and a moral dilemma. Should American textbooks be rewritten to paint robust pioneers who moved the flag westward as misguided land-grabbers or should Lewis & Clark and Davy Crockett be allowed to keep their status as flag bearers of determined entrepreneurship?
Whether the government tempted fate or not, the habit of putting home ownership on a celestial pedestal needs to be reassessed. But bankers shouldn't be asking, "What are the country's long-term goals, so we know what to exploit?" That doesn't make sense, either.
In international markets Wednesday, the Nikkei 225 index in Japan lost 0.07 percent while the Shanghai composite index in China lost 0.54 percent. The Hang Seng index in Hong Kong dropped 1.95 percent while the Sensex in India fell 0.76 percent.
In Australia, the S&P/ASX 200 index rose 0.02 percent.
In midday trading in Europe, the FTSE 100 index shed 0.37 percent while the DAX 30 in Germany dropped 0.66 percent. The CAC 40 in France slipped 0.86 percent while the Stoxx Europe 600 lost 0.57 percent.
