I read the transcript of Harper's speech to the MCBD conference and did not find it as upsetting as other conservatives have. When Harper claims Wall Street abused its freedoms he says nothing but the truth: bad debt was peddled as solid gold through CDOs and auditing companies abused (more like didn't use) their freedom to write off some securities as junk. The present credit crisis is a gigantic systematic screw-up with no justification, as the entire economy bought into a Ponzi scheme by whose comparison Bernard Madoff is an innocent lamb.
Truth is, whatever we may seek to blame the crisis on it lands two personalities on the defendant's bench: social engineering and immorality. Liberals are to blame for the former (bullying banks for the sake of equal home ownership), while conservatives could take the blame for the latter. As the idea that looks to the future, conservatives in America failed to emphasize the concept of added value and ownership.
Handing out junk mortgages for the simple sake of selling a garbage CDO isn't banking, isn't libertarian and isn't moral. Giving mortgages with a policy to add value to the branch's area, hoping to attract more professionals, more banking business and more wealth is added-value lending.
Example: a young professional is more likely to marry and make career progress. This means he or she will put more money in a savings account and bring another customer to the bank while paying back the mortgage. As more young professionals move in, the area gets gentrified, more affluent and requires more banking. That's looking to the future from a conservative perspective.
When you give out a mortgage, it's your money in play. Until we hammer this concept back into the system we will not learn any lessons from this mess. That's ownership. You own the house, but I own the risk. If ownership is the nail and regulation is the hammer, so be it. We are defending a free market in which everyone passed the buck together with a time bomb. It ain't right. Banning CDOs won't work (after all, solid debt is still debt) but we can't keep them in their present form either.
Harper's emphasis on family and faith isn't big news either, nor is it an ultimatum to libertarians. The family is the foundation of society and Harper's faith in the speech's context is the belief in the existence of good and evil beyond mere economic calculation. Don't libertarians believe in morals too? Where's the problem? Fears of a socially conservative agenda are easily assuaged: if the so-cons even try it, we will have 1993 all over again.
Harper's speech is simply stating that there's a mess to sort out and it's not just liberals who are to blame. Those balking at government spending didn't have the prospect of losing one's seat in the PMO.
He could have said some things better, and I for one take offence at the allegation that libertarians don't like to take responsibility. It's the faux libertarians who are ready to go liberal at the turn of the tide, whom we tried to defend as members of the free market who refuse to be responsible for the cleanup. True libertarians will not peddle garbage and true libertarians will not ask for a bailout.
Harper didn't walk into a libertarian meeting with the intention of alienating his audience, he still wants to win elections (duh). He merely wanted to set the record straight, that things will change after this crisis toward a more qualitative rather than quantitative approach and if someone wants to criticize the stimulus one should first try stepping into the PM's shoes. Imagine handing over the country to Dion, Layton and Duceppe, who would undo almost three years of hard work grinding through the slimmest minority.
I still like Harper. True he still throws out the occasional bungle or two, but the man has cojones. He came out in the heart of dissent and faced it head-on. We should take it as an opportunity: he is now up to discussing policy rather than just politics. We can take offence and sulk, or we can respond. This time we'll have more public attention because the media portrays it as if Harper's bullying us. Nothing's further from the truth. Were he a bully, he wouldn't have come into the Manning conference.
Tuesday, 17 March 2009
In defence of Harper's speech
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2 comments:
Harper is wrong when he says it was a problem of capitalism. It was completely the fault of government. It was the government that forced the banks to loan to people that could not afford it. It was the government that lowered interest rates to 1% thus making money free. It was the government that failed to regulate derivatives. It was the government that took away all the risk of the mortgage originators by creating Fannie and Freddie to buy them from them thus turning the banks into volume businesses. It was the government that failed to act on the Madof scandal when warned 5 years ago about it. I could go on and on. The government can not condemn people for greed when it is they who created all the rules and turned a blind eye to it.
Yes and Yes again, that's preaching to a convert. Yet again, it doesn't exonerate those who should have used the free market to generate wealth, not a Ponzi scheme. Like it or not, who sold the mortgage securities is still the one mostly at fault.
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