There is panic in the air. People are worried about their retirement accounts, about their jobs, and about the future. Wall Street is in full panic mode, dire pronouncements are a daily occurrence, banks are failing, Congress passes an $800 billion dollar bailout, a number large enough to get almost everyone's attention, and both left and right are proclaiming/fearing the passing of capitalism. If we are to believe our eyes and ears, we are clearly in the middle of a dramatic paradigm shift, liberal capitalism has failed, and no one knows what can replace it.
On Saturday night I watched a bit of Saturday Night Live, a show that has been cutting edge (at least in their own minds) for 30 years. They had a skit about the bail out which was instructive and suggests a sub-text to the financial panic that may well make itself felt in surprising ways as the current paradigm shift evolves.
The SNL skit featured George W. Bush acting like a boob (no surprise) and Nancy Pelosi acting like a hyper-partisan, blaming the entire melt down on the Republicans, only to have Barney Frank whisper to her that the financial mess was actually the Democrats fault. There then followed a parade of John Does injured by Wall Street. First up were a pair of young men who exhibited every social pathology that the writers could insert into a short skit. One young man was white and one black. They both were unemployed drop-outs, both had an unmarried pregnant girlfriend (or two), both had had dishonorable discharges, were drug and alcohol addicted, and had prison records. They had both taken out balloon mortgages which they didn't have to pay for an extended time and had lost their houses when the bill finally came due. The second injured parties were a yuppie couple who had bought 12 timeshares to flip and couldn't pay their mortgages when the housing bubble burst. The third injured parties were a couple who were worth $24 billion before the bailout and $30 Billion after; they didn't know why they had been invited to the press conference. The SNL caption under their image was "People who deserve to be shot." Although I may have some of the details wrong, the skit was merciless in skewering everyone involved, and more than that, clearly assigned the bulk of the blame for the meltdown to Congressional Democrats, Wall Street greed, and indirectly, the social engineering that underlies the crisis.
Numerous writers have suggested that social engineering, in the guise of fighting against racist practices and increasing minority home ownership, is at the core of this crisis. Paul Mirengoff finds it ironic that the disaster in the economy is helping Obama when he was intimately involved in furthering the very policies that led to the current situation:
The operative vision ... was leftist and racialist, not free-market. As West puts it, the social engineers decided that not “enough” minorities had homes because not “enough” minorities were eligible for mortgages. The solution was to junk the bottom-line, non-racial markers of mortgage eligibility traditionally used by banks to distinguish between good and bad credit risks -- steady employment, clean credit, and a down payment. Obama, then, is the beneficiary of the terrible failure of affirmative action style policies in the mortgage banking sector.
But the irony extends further. For it turns out that intimidating banks into making bad loans to minorities was a major activity of “community organizations” during the 1990s. And, according to Stanley Kurtz, Obama himself trained and funded ACORN activists who engaged in such intimidation.
Using a combination of intimidation and white guilt to plunge the banking industry into the crisis that brings a radical activist to power – even Saul Alinsky couldn’t have drawn it up this well.
Diana West, whom Paul Mirengoff quotes, is quite direct in her description of the etiology of this crisis and the results should Americans become aware of the history:
Social Engineering Derailed Our Economy
The fact is, if American citizens become too widely acquainted with the fact that race-based social engineering virtually created the sub-prime mortgage industry that has transformed the U.S. economy into The Titanic, Obama will sink in the polls. That's because race-based social engineering is what Obama both advanced as a so-called community organizer, and later funded as an official of Chicago's Woods Fund, where he served alongside unrepentant terrorist and political ally William Ayers -- another phantom political fact citizens now pondering their presidential votes are not supposed to consider.
But I digress. The question is, how exactly did the government overlay of race-based goals onto the real estate marketplace help create the sub-prime mortgage industry, which, having imploded, triggered the current economic crisis, and what did Obama have to do with it?
The answer goes back to one of those totalitarian drawing boards where social engineers draft their human havoc. Not "enough" minorities owned homes, the social engineers decided, because not "enough" minorities were eligible for mortgages, the social engineers concluded. Therefore, in the bean-counting name of what "should" be, the social engineers effectively junked all bottom-line, non-racial markers of mortgage eligibility, from steady employment and clean credit to the all-important down payment, that banks have traditionally relied on to determine the difference between a good and a bad credit risk. This paved the way for increasingly unconventional "sub prime" loans for all (including rubber-check-writing deadbeats, speculators and novices-in-over-their-heads of all races). The social engineers claimed victory for what they called "affordable housing" -- which also paradoxically created a vast market of extremely unaffordable housing -- but it was just a house of cards. The real estate bubble popped, the bad loans came crashing down, and the world markets came tumbling after.
I suspect that the story is more complicated, and that the lowering of standards for mortgages for minorities was accompanied by an even more damaging lowering of standards for mortgages for white Americans, but the premise, that mortgage standards were lowered in order to combat supposed racist practices, has the virtue of simplicity and the appeal of feeling true to a great many people, and from such feelings do unanticipated paradigm shifts arise.
For a great many years there have been repeated polls showing that Americans believe that standards have eroded in order to engineer equality for under-performing minorities. Thus far, the elites who run Washington have not taken much heed of the undercurrent of anger and unrest that such practices engender. When the unfair practices were confined to schools (in the school district where my three oldest were educated, white children needed to score above 98% on standardized tests to get into the Talented and Gifted Program while minority Hispanic and Black children needed only to score above 90%) the slanted playing field was tolerated. It affected a small minority of children and was an acceptable cost for helping lift up those less fortunate. However, the current financial disaster threatens everyone in highly personal ways.
I do not think America is a racist country yet that is a subtext of Barack Obama's candidacy. Every criticism of Obama is immediately attacked as racism and we have already been told that if Obama is repudiated it will be because Americans are racist. Only by electing Barack Obama can we prove to the world and to ourselves that America is no longer a racist country. Beyond the "boy who cried wolf" quality of the charge, I suspect a great many Americans resent being called racist for opposing a candidate who is not only as far to the left as any candidate in memory but also uses race to further his political interests.
Americans may very well be the least racist people on the planet. Generally those who lecture us about our racism come from societies that have invisible minorities or are overtly tribal and racist themselves. Because of liberal sensitivity to discrimination, and a legacy of racial discrimination (though England and America, two white religious societies at the time, were the first societies to actually outlaw slavery), Americans have traditionally been vulnerable to charges of racial discrimination. From that sensitivity emerged a generation of affirmative action programs, especially in education and business ("diversity" is a multi-billion dollar industry which adds nothing measurable to the GDP and is effectively a diversity tax on our economy) which were tolerated as long as those who suffered from the discrimination inherent in affirmative action were themselves a small minority. With the current financial crisis it is worth wondering how such underground sentiments will play out.
[I have argued that affirmative action is itself racist, supporting the notion that minorities cannot compete with whites on a level playing filed. This has its most insidious effect on the very minorities it is supposed to help, creating a victimhood mentality and raising questions that must then be denied and, as a result, reside forever in the uncoscious.]
The current financial crisis places a dollar value on our diversity anti-racism racialist policies and that dollar value is affecting almost every American. The anger and fear that people experience when they see their retirement money dwindle or the value of their house disappear is quite labile, existing like a virtual crystal waiting to precipitate from a supersaturated solution. If the financial crisis passes with minimal pain for Main Street and we can get on with the business of working, going to school, and feeding our families without great disruption, the anger will dissipate; if however, we really are in the early stages of an economic paradigm shift similar to the Great Depression, the anger will indeed crystallize and the results will be as unpredictable as they are likely to be dangerous. Let us hope that whichever candidate wins in November, and those charged with executing the current bailout, will have the wisdom and luck to bring the economy in for a survivable, if rocky, landing.
Addendum: Reading Glenn Reynolds this morning, I wondered if the effort to repeal the Massachusetts State income tax is not a reflection of the anger that is lurking. Starving governments that have historically attempted social engineering (ie, liberal governments) may be a crystallization of the resentment I have described.
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