Interesting Op ed piece in the Wall Street Journal yesterday

Discussion in 'Politics' started by Wyldgusechaz, Nov 21, 2008.

  1. Wyldgusechaz

    Wyldgusechaz New Member

    Dec 14, 2006
    Likes Received:
    Daniel Henniger said (to paraphrase) is the effort to squelch the saying of Merry Christmas a sign that this country no longer has a moral compass?

    The column

    Notwithstanding the cardboard Santas who seem to have arrived in stores this year near Halloween, the holiday season starts in seven days with Thanksgiving. And so it will come to pass once again that many people will spend four weeks biting on tongues lest they say "Merry Christmas" and perchance, give offense. Christmas, the holiday that dare not speak its name.

    Mortgage-backed security survivor.
    This year we celebrate the desacralized "holidays" amid what is for many unprecedented economic ruin -- fortunes halved, jobs lost, homes foreclosed. People wonder, What happened? One man's theory: A nation whose people can't say "Merry Christmas" is a nation capable of ruining its own economy.

    One had better explain that.

    How the financial markets fell so far so fast will occupy economic seers for years. The path to 50% wealth reductions and the death of Wall Street was paved with good intentions, notably the notion that all should own a house, even if that required giving away the house to untutored borrowers with low-to-no-interest loans.

    Did the forces behind the movement to replace "Merry Christmas" with "Happy Holidays" have any correlation to the nation in a financial crisis? Dan Henninger of WSJ Editorial page looks at the issue. (Nov. 20)
    This good intention set off history's largest chain of moral hazard. The great unraveling began sometime between 2005 and 2007, when borrowers, lenders and securitizer shamans all found themselves operating in a zero-gravity environment, aloft on moral hazard.

    The technical details have been described with harrowing precision by Robert Stowe England in "Anatomy of a Meltdown" for Mortgage Banker magazine. Briefly: "The underwater earthquake that first rattled the foundations of the mortgage industry came in the form of sharply higher delinquencies and defaults from a book of poorly underwritten subprime loans from the fourth quarter of 2005 through the first quarter of 2007."

    His narrative runs through borrowers making misrepresentations on loan applications (fraud), the collapse of Bear Stearns's hedge funds, revised ratings-agency methodologies that led to "unprecedented" mass downgrades, causing a contagion that spread from subprime to prime home-equity loans, and a warning from the president of the IndyMac S&L that "the private secondary market is not functioning." This in turn precipitates a "torrent of deleveraging." Here's the best part: Mr. England's chapter-and-verse article appeared in October -- of 2007, one year before the current mass panic.

    A more recent, widely emailed article for by Michael Lewis of "Liar's Poker" fame describes a skeptical hedge-fund manager and his associates walking through the wild world of mortgage-backed securities like stunned characters in "Mad Max," in effect asking bankers, borrowers and ratings-agency executives one question: Why? Why do you think all of you can get rich, all at the same time, forever?

    On Sept. 25, a week after Lehman Brothers declared bankruptcy, Nicolas Sarkozy announced, "Laissez-faire is finished." Then the Washington Post asked on its front page: "Is American Capitalism Finished?"

    Little or nothing that has occurred through this crisis discredits the system of free-market capitalism. Across several centuries of rising world incomes and social gains, the system has proved its worth. In this instance, the system has been badly used -- by mere people. Nonetheless, the dimensions of the fall and devastation that originated in subprime mortgages are breathtaking.

    Amid all these downward-pushing pressures, occurring in plain sight, hardly anyone or anything stepped up to brake the fall. What happened?

    The answer echoing through the marble hallways of Congress and Europe's ministries is: regulation failed. In short, throw plaster at cracked walls. Trusting the public sector to protect us from financial catastrophe is a bad idea. When the Social Security and Medicare meltdowns arrive, as precisely foretold by their trustees, will we ask again: What were they thinking?

    Today in Opinion Journal


    The Obama Health Plan Emerges
    A Capital Message
    The Politics of Entitlement


    Wonder Land: Mad Max and the Meltdown
    – Daniel Henninger
    Now Obama Has to Govern
    – Karl Rove


    Ignore the Stock Market Until February
    – Andy Kessler
    Let's Have a Real Middle-Class Tax Cut
    – Newt Gingrich and Peter Ferrara
    Obama Should Look Into Putin's Record, Not His Eyes
    – Garry Kasparov
    An Auto Bailout Would Be Terrible for Free Trade
    – Matthew J. Slaughter
    What really went missing through the subprime mortgage years were the three Rs: responsibility, restraint and remorse. They are the ballast that stabilizes two better-known Rs from the world of free markets: risk and reward.

    Responsibility and restraint are moral sentiments. Remorse is a product of conscience. None of these grow on trees. Each must be learned, taught, passed down. And so we come back to the disappearance of "Merry Christmas."

    It has been my view that the steady secularizing and insistent effort at dereligioning America has been dangerous. That danger flashed red in the fall into subprime personal behavior by borrowers and bankers, who after all are just people. Northerners and atheists who vilify Southern evangelicals are throwing out nurturers of useful virtue with the bathwater of obnoxious political opinions.

    The point for a healthy society of commerce and politics is not that religion saves, but that it keeps most of the players inside the chalk lines. We are erasing the chalk lines.

    Feel free: Banish Merry Christmas. Get ready for Mad Max.
  2. Calboner

    Gold Member

    Aug 16, 2007
    Likes Received:
    Quoting Mr. Henninger (by the way, here is the source article):
    Quite right.
    Huh? We do? Well, I guess that, if we are merely following the train of associations in the writer's mind, there is no limit on what can lead to what.
    How so?
    Ah, so now we are back to private mental associations and non-sequiturs again, only this time they are being offered as causal connections.
    Rubbish. The idea that a religious upbringing makes people morally virtuous, or moreso than people without such an upbringing, is supported by zero empirical evidence. Of course, that never stopped people like this Henninger character from repeatedly asserting it.
    We may end up in the world of Mad Max from a variety of causes, but I don't see the banishing of "Merry Christmas" among them.

    This guy is pulling his arguments out of his arse. They have no basis in fact.
  3. ripsrips

    Verified Gold Member

    Nov 5, 2006
    Likes Received:
    California (US)
    #3 ripsrips, Nov 21, 2008
    Last edited: Nov 21, 2008
Draft saved Draft deleted