What do you think is happening with the economy? What I read runs the gamut from "it's a necessary correction to an overheated market" to "it's a conspiracy by administration neocons to
shrink the federal government to nothing and drown it in the bathtub." I've started
reading more on economics, but it's not really helping my level of understanding--maybe because, as I'm also reading everywhere, nobody really knows what's going on with Wall Street right now.
My own no doubt overly simplistic take is that there was a lot of extra money floating around (where did it come from--overseas investors?) with few places to put it--industry had slowed and high tech bombed recently--except for home construction. Nobody had a real incentive to keep home prices down, so rather than the sweet, steady (but not excessive) appreciation home prices had shown since forever (in most places--John and I remember the boom and bust in Texas in the mid-eighties), home prices started up in what in retrospect should have been an obviously unsustainable way, as a proportion of people's actual income.
Because homeowners' equity was growing at such an incredible rate, ordinary people had a source of investment income known only to wealthy market players before that. Prospective home buyers were eager to get on board the cash-generating engine, and lenders were also eager, as the value of their investments grew almost exponentially with the passage of time. During the Clinton administration, Phil Gramm (R) and the Blue Dog Dems loosened regulations on loans to home buyers, and people began getting and making loans that in previous years would have been unbelievably reckless--balloon payments, adjustable rate mortgages, no down payment, no principal payment--in the wishful belief that home values would continue to escalate forever. I see commentators on the right blaming Clintonian efforts at making home ownership available to minorities (why not blame the brown people). I see commentators on the left with evidence that some lenders would actually steer naive borrowers to risky loans when they would have qualified for more conservative ones, because the profits for doing so were larger.
And then lenders/investers began inventing new ways of packaging the separate loans and selling them to each other, as a (supposed) way of reducing risk. The disadvantage was that nobody knew exactly the value of what they were buying. In our nearly twenty years of having a mortgage, our payments have gone to several different companies, as our mortgage was sold from one lender to another.
But the problem wasn't only with home prices. The economy outside of residential construction was in trouble, with actual standard of living stalling and by some measures even shrinking over the past eight years or so, personal savings disappearing, and people living on credit. Maybe this was due to easy credit on a personal and a national level, as our country plunged into a round of unprecedented deficit spending. Everybody else was still willing to lend to us,
nobody--
except the paleoconservatives maybe--really believed in a balanced budget anymore. There seemed to be no "moral hazard," no consequence for taking risky chances, on a personal or on a national level.
And then finally, and slowly, the whole unsustainable edifice began to collapse. When people begin to feel that they can't afford to buy a house no matter the projected increase in its value, they quit borrowing to buy. When enough quit buying, prices begin to fall. Even I get that, the law of supply and demand. So what's the problem--isn't that the way free markets work? Don't markets in the real world always eventually contract? What's the matter with just letting it happen?
A market contraction hurts poor people--I get that. Marginal people are always the first to lose their jobs and homes. I get why a democratic congress wants to avert or ameliorate that as much as possible. I also get that rich people will also suffer (relatively). I get that congresspeople of both D and R persuasions are unduly influenced by who takes them out to dinner and donates to their campaigns. What I don't get so much is the administration's plan--I wonder if my crazy conspiracy suspicions are real or not. Can it be that this "market contraction" and the administration's solution--a $700,000,000,000.00 transfusion from the public to the private sector--is just the next logical step in a "drown the government" effort? That the deficit spending, the deregulation, the resultant contraction, and the panicky "rescue" are all part of a feature, not a bug? That demonstrating--over and over--the truth that "I'm from the government, I'm here to help" is a statement to be feared, is
intentional?
I have opinions about politics, which are both passionate and fun, but I deeply distrust my own biases, my ignorance, and especially my temptation to believe in conspiracies. I gave up my attraction to them after an epiphany many years ago. I was driving to work along FM 1960 from Spring Branch to The Woodlands, looking at miles and miles of identical half-empty strip malls--pawn shops, check cashing joints, hair salons, karate studios. I was thinking about the newly elected mayor of Houston and what I had read about the city's lack of zoning laws. I suddenly realized, with a sense of panic, that
nobody was in charge. It was all totally accidental--like a metastisizing cancer. I felt that the whole world would be swallowed up.
I don't think there is a genius master villain smart or powerful enough to actually be in control of all this. But I wonder if some free market and small government ideologues in the administration are not pushing the rescue (
sans oversight and regulation) just a little too hard for truly responsible disinterest. But I also realize that I'm uncomfortably close to putting on the lefty tinfoil hat. What do you think?
to see Brett and his Chilean rock band at the Gallivan Center.
to Salt Lake Tuesday night so he could be on the plane the next morning. We visited with Rob & Nicolle 
and Brett & Betsy (everyone had their eyes shut in the picture of B&B), then came home fairly early because it was a school night. 
We miss you Dave! We were so glad to see you.
When we went indoors, everybody played Rock Band:
Tomatoes, peaches, pears, flowers. There's a good-sized pumpkin hanging off the grapevine. John wants to learn to make bread to go with his pear jam. Yum!
Brett was not feeling well and stayed upstairs, although he commented out the window occasionally. Colette was a horse for the entire time, galloping, neighing, and pawing the air, and eating grapes and baby carrots out of our hands. She had administered a haircut to herself just before they came over. 
Little blonde curls kept falling out of her hair onto the grass. Johnathan, now bipedal and completely mobile, spent most of the time making a dash around the house for the street out front. I had almost forgotten how much energy little ones require. Rob handled them good-naturedly. It will be great to see them all on Sunday for Betsy's birthday party.
