April 14^th

 

Mona Charen has brought forth, yet again, an argument about the cause of the late and unlamented housing disaster. She titles her effort, “Still worth arguing about.” I doubt that, but Mona has latched on to a new book written by a demi-god from the American Enterprise Institute named Peter J. Wallison whose politics about this issue are agreeable to her. Naturally enough she must revisit all the old arguments.

According to Wallison the fault was entirely the government's, what else? The government demanded that more and more loans be created encouraging people who couldn’t afford expensive housing to borrow money and get into the market. He is entirely right about that but the crises had more contributors; the big banks which repackaged these risky mortgages and flogged them to the market was also at fault; particularly when the whole business began to go sour.

Mona claims that Wallison’s book, “Hidden in Plain Sight” makes a convincing case for why the received wisdom is wrong; the credit- default swaps, predatory lending and other nastys were not at fault here, government policy created the financial crisis at every step. Her recitation of Wallison’s points could have come directly from the description of the book’s contents listed on Amazon. She mentions nothing that you couldn’t read in the book’s description. So, did Mona read the book, or just its description on Amazon? Who knows?

Mr. Wallison message has had some detractors: They point to the incontrovertible fact that other real estate than housing also suffered a disastrous decline, that other countries than ours, without our benign loan  arrangements, also suffered declines and that the proportion of government arranged loans had been declining since 2000. Wollaston addresses none of these issues; Charen doesn’t care.

The Amazon’s listing for this book has a large number of five star and an almost equal number of one star reviews. That is very unusual. The publisher, a devotee of right wing causes, has, in a fit of pique, ceased sending books for review to the Times book review. Apparently this is not a publisher committed to presenting even-handed viewpoints.

Charen concludes by telling us that, “Voters need to know that the greatest risk to their financial security is benign sounding government assistance.” Perhaps she should try to convince recipients of food stamps, Social Security, Medicaid and Medicare of that.