I recently came across an astonishing assertion about the Community Reinvestment Act, the legislation tagged by many on the Right as to blame for the financial meltdown. According to what I was reading, the CRA was really a good thing since banks covered by CRA were only one-third as likely as other financial institutions to originate subprime mortgage loans, even though the former were denying loan applications at the significantly lower rate.

This might pose a problem for people who want to blame the crisis entirely on CRA, but other than weakening that argument, this claim actually says very little since CRA only applies to (some) banks and savings institutions, not to non-bank financial services companies like the late Countrywide Financial, which were the biggest speculators in the mortgage market. Now, were CRA banks less likely to roll dice on bad mortgages because of CRA, or were they less apt to do so because banks are generally more conservative than entities like Countrywide? Similarly, you can see the self-selection bias involved in the percentages of loan applicants denied. If you’re not very creditworthy, are you going to seek a loan from a stingy bank or from some riskier outfit? What CRA did was to worsen the financial crisis — not create it — by involving the banks more deeply in questionable mortgages. If it had not been for CRA, presumably banks would have originated even fewer than one-third of subprime mortgages (which is still many billions of dollars)  and would have been turning away more uncreditworthy applicants. That was definitionally and intentionally what CRA did — it instructed banks to give more loans to riskier customers. If that didn’t produce more defaults, it would be a miracle almost fit to get the U.S. Congress canonized. Read more…

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Actually, Joe set himself up. From the moment he set foot on Israeli soil, our vice president was in full pander mode.

First, he headed to Yad Vashem memorial, where he put on a yarmulke and declared Israel “a central bolt in our existence.”

“For world Jewry,” Joe went on, presumably including 5 million Americans, “Israel is the heart. … Israel is the light. … Israel is the hope.”

Meeting Shimon Peres the next day, Joe confessed that when he first visited at age 29, “Israel captured my heart.”

In Peres’ guestbook, he wrote, “The bond between our two nations has been and remains unshakeable.”

He then told Peres and the world, “There is absolutely no space between the United States and Israel when it comes to Israel’s security.”

As Peres spoke, Biden took notes. When Peres called him “a friend,” Joe gushed, “It’s good to be home.”

Even at AIPAC, they must have been gagging. Read more…

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My view of the lopsided and unnatural relationship between the United States and Israel has been spelled out in some detail over the past few years:  there is nothing in it for us Americans but grief and the possibility of yet another unwinnable war in the Middle East.  The Biden visit to Israel in which he was deliberately given the step-and-fetchit treatment should convince every American that the Bibi Netanyahus of this world will always regard U.S. interests as being of no concern whatsoever.  Anyone who reads what happened last week differently is being delusional.  Even the Israeli media is arguing that finally the Israeli government has gone too far.

The real indication of whether or not the White House will or can begin to break the chains that bind will come at the end of this week when AIPAC holds its annual conference.  AIPAC is keenly aware of the need to pull the American colossus back in line and will do so by playing the evil Iran card over and over again and by demanding obeisance from a long line of politicians and media pundits.   The AIPAC lovefest will conclude with an address by Hillary Clinton next Monday.  If Hillary actually talks tough to the assembled Israel Firsters it would be a genuine hallelujah moment.  But I’m not betting on it.  Most likely it will be a “let us reason together as friends” speech and we will move on to the next phase of wag the dog.

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Matthew Yglesias suggests that out-group bias against environmentalists explains why libertarians, in contradiction to their own ideology, so often defend sprawl. (Jim Henley, Erik Kain and David Schaengold and others also had interesting reactions to my earlier post.)  There’s something to that, though I’d like to add two more factors that may be at work.

The first is relatively benign, namely, availability bias. That sprawl opponents want to restrict development is well-known; less well-known is that existing laws make it impossible to develop anything but sprawl. To save cognitive resources, libertarians rationally overestimate the importance of available information (being anti-sprawl means being anti-development!) at the expense of information that takes time and effort to gather (being anti-sprawl also means being anti-central planning). This doesn’t excuse John Stossel, who presumably had time to research his vindication of sprawl before broadcasting it, but it does explain why others make similar mistakes. Indeed, the availability heuristic explains why both libertarians and their opponents so often assume that the free market causes sprawl. 

Even relatively well-informed sprawl defenders are misled by more readily available information. In various comments, for example, some argued that Houston, which famously has no zoning code yet looks just like every other place in America, proves that consumers prefer sprawl.  Even without zoning, however, Houston’s land use rules still mandate sprawl. Here, for example, are Houston’s street design ordinances. Among other things, they require that major streets be 100 feet wide and that intersections (which must have a 25 degree turning radius) be spaced 600 feet apart. Imagine yourself strolling down a block three football fields long next to a road packed 100 feet across with moving vehicles. Wouldn’t you rather be safe within your car? I would. Houston, like most other places in America, has driven pedestrians away.  The Houston example proves the opposite of what sprawl defenders think. Not only does the government mandate sprawl, but sprawl is legally over-determined. That is, any number of laws, even without the others, suffice to make sprawl the only possible form of development.

Second, libertarians defend sprawl because they have ideological commitments other than to limited government. In sprawling neighborhoods, people only go out in public (and then of course only in their cars) to buy stuff.  In traditional neighborhoods, by contrast, people go out to buy stuff, but also to people-watch, gossip, stroll, or maybe all these things at once.  Sprawl restricts the range of human activities to the purely commercial. Indeed, the sprawling business and shopping district, with its strip malls, office parks, parking lots and massive road signs, is the very image or “ideal type” of commercial life.  Libertarians know that have no problem with meretricious commercialism. They therefore feel compelled to embrace sprawl, which allows nothing else.

Of course, traditional neighborhoods do not actually prohibit commerce. Indeed, the intellectual hero of the New Urbanists, Jane Jacobs, passionately defended commercial values, which she believed flourished most of all in cities. (See her quirky homage to Plato’s Republic, Systems of Survival.) More importantly, just because you oppose sprawl does not mean that you despise people who shop at Walmart, any more than if you oppose rent control you despise people who can’t find housing.  The ubiquitous commercialism you see as you drive through America is not in itself deplorable. What’s deplorable is that Americans aren’t free to do anything else.

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Though Bush 41 and Bush 43 often disagreed, one issue did unite them both with Bill Clinton: protectionism.

Globalists all, they rejected any federal measure to protect America’s industrial base, economic independence or the wages of U.S. workers.

Together they rammed through NAFTA, brought America under the World Trade Organization, abolished tariffs and granted Chinese-made goods unrestricted access to the immense U.S. market.

Charles McMillion of MBG Information Services has compiled, in 44 pages of charts and graphs, the results of two decades of this Bush-Clinton experiment in globalization. His compilation might be titled, “Indices of the Industrial Decline and Fall of the United States.”

From 2000 to 2009, industrial production declined here for the first time since the 1930s. Gross domestic product also fell, and we actually lost jobs.

In traded goods alone, we ran up $6.2 trillion in deficits — $3.8 trillion of that in manufactured goods.

Things that we once made in America — indeed, we made everything — we now buy from abroad with money that we borrow from abroad.

Over this Lost Decade, 5.8 million manufacturing jobs, one of every three we had in Y2K, disappeared. That unprecedented job loss was partly made up by adding 1.9 million government workers. Read more…

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