Noncontiguous Information Streams

In last Sunday's New York Times, Alan Blinder offers several reasons for the financial crisis. (http://www.nytimes.com/2009/01/25/business/economy/25view.html?_r=1&scp=1&sq=%22Six%20Blunders%22&st=cse

What he writes sounds quite plausible, e.g., the SEC allowing leverage to more than triple by securities firms. And here is what he says about the subprime boom:

A SUBPRIME SURGE The next error came in stages, from 2004 to 2007, as subprime lending grew from a small corner of the mortgage market into a large, dangerous one. Lending standards fell disgracefully, and dubious transactions became common.

Why wasn’t this insanity stopped? There are two answers, and each holds a lesson. One is that bank regulators were asleep at the switch. Entranced by laissez faire-y tales, they ignored warnings from those like Edward M. Gramlich, then a Fed governor, who saw the problem brewing years before the fall.

The other answer is that many of the worst subprime mortgages originated outside the banking system, beyond the reach of any federal regulator. That regulatory hole needs to be plugged.

What remains unmentioned is the role of the Congress, the previous two administrations, and Fannie Mae and Freddie Mac. It seems quite well established that there was a strong push to increase home ownership, especially among minority groups, and this compassionate impulse took the form of coercive legislation and regulation designed to force bankers to ease their lending standards. The gimlet-eyed Snidely Whiplash banker was to be replaced by the kinder, gentler fellow who did not inquire too closely into sources of income and ability to repay mortgage loans. Both the Clinton administration and the Bush administration that followed loved to "point with pride" to rising percentages of home ownership. Barney Frank led the charge in the House to compel Fannie Mae and Freddie Mac to buy these increasingly suspect mortgages, which got them off the originating lender's books, and in turn encouraged even more suspect lending. Far from a case of laissez-faire, this was a case of powerful governmental intrusion into the functioning of credit markets.

Predatory lenders and fraudsters got in the game, while the Congressional panjandrums enjoyed pushing the market in the direction they favored; they were on the side of the angels, after all. To add to the mix, highly placed officials in the Clinton administration landed nice jobs at the GSEs and took home enormous bonuses, thanks to cooking the books.

None of this can apparently be mentioned. Indeed, in the article Blinder quotes Barney Frank with a totally straight face, as an expert who "sounded alarms." I should say he is an expert, since he helped turbocharge the mess. Remember his famous quote about wanting to "roll the dice a little bit"?

This article seems to me an example of what James Lileks calls "noncontiguous information streams." The different sides of an argument cannot even agree on the facts that are starting points for disagreement. Those who promoted and facilitated lax lending standards simply do not acknowledge any complicity of the mess we are now in, and the analysts choose not to recognize any public fault. Nor is there the slightest criticism directed to those people who lied about their incomes or just got themselves into a pickle by being imprudent.

Yet I am sure that honesty and prudence figure prominently in the personal lives of these economists. But diagnoses and prescriptions for these ills cannot take those factors into account. They are beyond the pale of policy discussions.

Open Houses

When it comes to open houses in Crocus Hill and Ramsey Hill, the ones that real estate agents put on, I have always been a voyeur. Unless the previous occupants had decamped with absolutely every possession, I have taken a guilty pleasure in roaming among other people’s things. A few decades of this harmless brand of voyeurism have taught me several things.

Back in the 70’s, it seemed, open houses revealed families in decline. The large frame houses that had served to raise large families (how did they do that with a 60 amp service, anyway?) were turning over. On the dressers were lots of black and white photos of young men in uniform. They stared out at me with jaunty confidence. But they had moved out. Oh, maybe the youngest child was still at home, but in those cases where I knew the family, it seemed like the youngest had received the dregs of the gene pool. Something heroic or at least substantial had been lost.

Open House at Garrison Keillor’s

I showed up at one open house in Crocus Hill and met the woman who was the seller. Apparently, she couldn’t stay away, as most sellers who are still in the house do. She was eager to explain that she had bought the house from Garrison Keillor, whose lasting contribution was to install a substantial sauna in the basement. I recalled how he used to describe St. Paul as the “city of private lives” and how the people were so civilized that they didn’t acknowledge him when he went for a walk. Well, some people, anyway. There was that kerfuffle when the Pioneer Press printed the address of Garrison’s newly purchased house in Ramsey Hill, which apparently prompted thousands of fans to drive out-of-town visitors past the place. Garrison raged at this breach of an unwritten rule about printing the addresses of local celebs. He lit out for the territory of Western Wisconsin, at least for several years.

Back to the woman selling Garrison’s former house. Even better than the sauna was a photo she produced of F. Scott Fitzgerald standing in the front yard. It must have been 1922, when Scott and Zelda rented the house across the street for six months or so, before moving on to Dellwood.

Most of the houses I have passed through were dumps, or at least had seen a lot of hard wear. It takes some imagination to see how they could be restored to something like their original condition. There was a Summit Avenue place I saw recently, for example. You might call it a mansion if it were not in such tough shape. A million dollar fixer upper, as it were. The rooms were empty, except for some boxes in a second-floor bedroom. In one box were framed certificates, including one admitting the house’s former owner to practice law before the U.S. Supreme Court. I had heard of this man, a prominent attorney in town, and here was proof of his exalted legal standing. But it was surrounded by an Ozymandias feeling, since the house was so decrepit, so tattered and worn out.

So many houses were like that, except not on the grand scale of this one. In every one I think about this memento mori aspect, the tendency of all things toward entropy, which in this case means dilapidation, painted-over wallpaper (why didn’t people strip wallpaper, anyway? Shoe molding that had long ago been ripped out to accommodate wall-to-wall carpeting that was now threadbare or missing. Hideous bedrooms with loud pink or green walls. Ceilings sporting nipples that once held lighting fixtures but were long gone. Peeling paint everywhere. Had the owners once been proud and prosperous? Had the family business fallen on hard times? Had someone taken to drink and let his business decline? Had the servants been dismissed, and had the elderly couple stayed on, living in just a couple of rooms, with the rest of the house shut up and moldering about them? It was easy to fashion a narrative to explain what one saw.

Of course, not all houses were like this. Some were marvelous renovations. Aga cookers, Subzero refrigerators, beautifully restored pantries with zinc counters and windowed cabinets holding china and crystal. One such house in my neighborhood had been lavishly and beautifully renovated, and the owners invited the neighbors in.

On the second floor, a small bedroom had been combined with a small bathroom, to make a much larger new bathroom. There was more than enough room to swing the proverbial cat, and the fixtures and accessories were perfect. One elderly neighbor gasped when she saw it. “It’s not Crocus Hill,” she said, and I knew what she meant.

The old-money people in the neighborhood prided themselves on not being ostentatious. They might have big houses, but they didn’t spend a lot to improve them. Their kitchens often looked like not much had been done since the 20s or 30s, for example. Perhaps that was because there was still someone cooking for them. Or perhaps it was just Olympian indifference. Better to use the money for a favorite charity, it seemed. I was in one such house for a small benefit concert once. It’s an enormous brick pile, where the drapes in the living room were tattered, the walls had probably been papered when FDR was president, and the kitchen looked like time stood still around 1910.

There is something quite romantic and admirable about the people who owned these places. Not the least of their virtues is that they gave some cover to those of us who were simply too impecunious to make improvements to our own old houses. But I fear those old-money folks are dying off, and taking their protective cover with them.

Antiwar Protesters at Macalester

On Sunday, I went for a long walk, which took me down Summit Avenue past Macalester College. There was a small group of demonstrators holding signs about how bad war is and how good peace is. There was nothing on the signs about the Russian aggression against Georgia, however. I thought it would be fun, in the spirit of Protest Warrior, to join the group holding a sign that said "Peace at Any Price" and then in smaller letters, "even at the price of war." It''s a quote from Chesterton, and I savored how the demonstrators might gasp for a half-second, in the manner of the AFLAC duck reacting to Yogi Berra, before descending on me in an unpacific manner.

June

I enjoy reading Mitch Berg's Shot in the Dark blog. I followed his bout of underemployment and his more recent success. I can relate, having been underemployed myself for a while. I responded to an Internet ad for a freelance writer with "deep technical experience" and I was selected as one of four writers on a long-term project for a well-known tech company. But there have been delays getting going. Then this morning I got a call from the ad agency where I used to work. They want a part-time copywriter to work on a quasi-technical project that will also last a few months. I can do some of the work at home. Hallelujah! When the other project starts, I can handle both, I figure.

Last Thursday through Saturday, I attended the annual conference of the American Chesterton Society, at the University of St. Thomas. It was wonderful, and I only regret not going to earlier conferences. There were interesting talks on Chesterton and Orwell, Chesteron and Sigrid Undset, Chesterton and E.F. Schumacher, to name a few. But the best thing was the great vibe: people of all ages, from high-school kids taking notes (!) at the talks, up to charming gents in their 80s, and everyone having a good time in a mellow, good-humored way. One custom I particularly enjoyed: beer and wine are free, while bottled water is $1 apiece.

Sunday, I watched the U.S. Open. It was great to see a chubby chain smoker win. The television crew seemed a little unsure of how to handle camera shots showing Angel Cabrera lighting up, but they seemed to decide to go with it, noting at one point that after a good holw, it seemed like a good time for a smoke. They also took note of pictures showing Jack Nicklaus puffing away 45 years earlier when the zopen was held at the same course. What was left unsaid was the sea change in governmental and public atitudes toward smoking that has taken place in the meantime. But they couldn't disparage one of the leaders in the tournament. It was fun to watch.

Posted by Finn MacCool

Blogs and Reading Groups

James Lileks has taken over the buzz.mn blog of the Strib. He overwhelms the other posters by sheer volume, breadth of subject matter, and wit.

The prolific bloggers like Instapundit and Lileks and Captain Ed remind me of the Victorian novelists in their productivity--lots of quality stuff all the time. Trollope, one of my favorite Victorians, wrote every day before going to work at the Post Office, cranking out five hundred words or so each time. He made the mistake of telling us about his output in his autobiography, which did not endear him to the Flaubertian school of critics. Anyway, there is a Victorian work ethic with these bloggers that is an inspiration.

I have been posting again to Dickens and Trollope reading lists on Yahoo. There is one crabby professor from George Mason who forced me off a different Trollope list that she owned because I had the temerity to quote George Will quoting Trollope. That was beyond the pale to her wway of thinking. Other than that individual, I enjoy these reading groups very much. They are mostly composed of not academic specialists, just enthusiasts.

One person I recall who also ran afoul of this crabby professor was a guy named R.J. Keefe. He has a number of blogs, and on one he reviews the book reviews in the New York Times Sunday book section. He does not appear to have or need gainful employment, signing himself R.J. Keefe, gent., of Yorkville, New York. I see that he has a link to the professor, so they must have patched up their relationship.

Posted by Finn MacCool

My Father's Oldsmobile

I noticed a Olds Bravada parked on the street yesterday, the discontinued SUV from the discontinued badge of Olds. It reminded me of the ad campaign from the 90's, "It's not your father's Oldsmobile." One of the TV ads in the campaign featured a grandson of Ernest Hemingway, and the ad somehow linked the Bravada to the novel "Across the River and Into the Trees." I loved that ad. It had a cool-looking guy (actually, he looked a lot like Papa Hemingway). It had an organic connection to offroading; you could take your Bravada across a river and into some woods, although of course almost noone really does. It made me think of the line from the novel, something like "He closed the car door quickly and well," which is a delicously appropriate parody of Hemingway's style, by the master himself. It made me think how much I liked "A Moveable Feast."

I also thought about my father's Oldsmobile. As it happens, my father actually did have an Olds. I think it was a 1955, which we had after the 1952 Buick and before the 1959 Ford wagon. With Dad at the wheel, an unlit Pall Mall hanging from his lip, the family took the Olds across the country in 1957, an epic journey that lives in our memory. So the ad campaign was right on target as far as we were concerned. But on the other hand, wasn't "Rocket 88" one of the early rock tunes? Wasn't that a love song to a powerful V-8 engine? How come Olds didn't come to have the cachet of, say, the '55 Chevy? Too bourgeois maybe. Too close to Buick to be cool.

Speaking of ads with literary associations, the Nissan Murano ran a series of spots featuring "on road adventures," which I thought were conceptually clever. People don't really take their SUVs off road. They buy them for safety and capacity. So the ads showed people doing cool on-road-oriented activities, e.g., buying a cello in a used-instrument shop, or hunting down a first-edition Vonnegut and having the great good fortune to run into Kurt himself, so he could autograph your new purchase. The tone of those ads was pitch-perfect. All of us boomers who grew up with Vonnegut were hit where we lived, unless we had outgrown our youthful enthusiasm, which I had. But the whole idea of flasttering the reader or viewer was great: we know you are the kind of person who hunts down great cellos and first editions. Yea, right. We know that's BS. but we love it anyway.
Posted by Finn MacCool

A Golden Age?

I was thinking how much I enjoy reading blogs. They consitute a golden age of writing and argument, instantly available and free. Part of the pleasure is iliterary--the joy of well-turned phrases. In the phrasemaking department, Lileks writes at a consistently high level. Today, he tackles his Strib colleague Nick Coleman on gasoline prices, and puts in Coleman's mouth some comical bits of inarticulate rage. Last year he described the new Walker Art Center as looking like an "angry robot god." I have used Bleats in my classes to illustrate similes and metaphors.

But the pleasure is also that of argumentation. What can match the back-and-forth of the writers on The Corner, for instance, or the logic of a Eugene Volokh? (Law professors in general make good bloggers.) Who combines humor and logic and fact so well as Tom Maguire on Plamegate or the Duke lacrosse miscarriage of justice? Mark Steyn, of course, is sui generis, although I must say I like him and Lileks better in print than on Hugh Hewitt. Writing gives you the chance to edit and polish. The mots tend to be more juste, less adulterated by the exigencies of the moment.

The other great benefit of blogs is that they provide a perspective usually missing from the MSM. Here are two current examples. The New Yorker this week has a Talk of the Town piece on Rachel Carson. It lambastes the Bush administration for gutting environmental regulations, to favor rapacious corporate interests. But the piece avoids all mention of the great debate about "Silent Spring" and DDT, and how the ban on its use has cost a great number of lives in poor countries because of the resurgence of malaria. Blogs have made the argument that Rachel Carson has indirectly been responsible for thousands of preventable deaths.

The other example concerns another Rachel, the U.S. Attorny for Minnesota, Rachel Paulose. The Pioneer Press today breathlessly reported that Monica Goodling admitted to considering party affiliation in the selection of Paulose. The PP is shocked, shocked to discover politics playing a role in political appointments. But as Powerline noted, there may have been a U.S. attorney appointed by a president of the opposite party, but it's not how things are done usually. More proof that the center-right blogosphere serves as a welcome counterpoint to MSM bias.

Posted by Finn MacCool