[GCFL-discuss] Orson Scott Card

Wed Nov 5 09:27:40 CST 2008

I had no doubt that this one really is by Card, but he's around 75%
wrong.

My favorite on-line gospel columnist ran a summary of this, so I had
already composed a quick response. Some of the contents I had previously
posted here, in response to something else greenBubble or someone dug up.
Basically my objections were:

1) Fannie and Freddie's problems had as much to do with pressures the
market put on them as pressures congress put on them,

2) Saying that Fannie and Freddie giving out loans to people who weren't
good risks is THE root of the problem is absurdly partisan. It is
definitely one piece of the puzzle, but no more than one piece.

Which leads me to doubt that Card is either a "liberal" or a "Democrat,"
but as I am neither, perhaps he is and I just don't know how to recognize
one. I liked Ender's Game too, and his alternate history of North America
started well, although the later novels just seemed to lose the magic of
the first one.

Siarlys

P.S. If anyone is interested, here is the longer version:

EVERYONE who points the finger at ONE allegedly overlooked cause of the
financial crisis, while denouncing all others that have allegedly
received more attention, is absolutely wrong. Card is no different, and
his line of attack is not original.

It has been gospel to the dominant factions in the Republican Party since
about 1980 that government should take its hands off the stock markets,
the financial markets, and business generally, expecting that "market
forces" would generate not only prosperity but impeccable Norman Rockwell
morality and a sound economy we could all rely on.

That has proved to be hogwash. It was already proved to be hogwash, only
a few years after Reagan deregulated the Savings and Loan industry. What
had been small, community-based savings institutions, offering relatively
easy access to mortgage money for local working families, became a prime
target for large-scale speculators and spectacular mergers, resulting in
a crash for which taxpayers picked up a tab running into billions of
dollars. A well regulated Savings and Loan industry would not have been
attractive to those speculators, nor would such large regional chains
have been consolidated under the previous rules. (My money is in a credit
union, which still serves its original purpose. When credit unions get
"deregulated" and some highly leveraged investment bank offers to "buy
the shares" of current "members" I will take all my money out and never
look back.)

In the biased media Card denounces, I found an article which tells
another side of the undoubted errors committed by Barney Frank,
Christopher Dodd, et. al.:

http://www.nytimes.com/2008/10/05/business/05fannie.html?hp

Fannie, a government-sponsored company, had long helped Americans get
cheaper home loans by serving as a powerful middleman, buying mortgages
from lenders and banks and then holding or reselling them to Wall Street
investors. This allowed banks to make even more loans — expanding the
pool of homeowners and permitting Fannie to ring up handsome profits
along the way.

But by the time Mr. Mudd became Fannie’s chief executive in 2004, his
company was under siege. Competitors were snatching lucrative parts of
its business. Congress was demanding that Mr. Mudd help steer more loans
to low-income borrowers. Lenders were threatening to sell directly to
Wall Street unless Fannie bought a bigger chunk of their riskiest loans.

Angelo R. Mozilo, the head of Countrywide Financial, who did not return
telephone calls seeking comment, told Mr. Mudd that Countrywide had other
options. For example, Wall Street had recently jumped into the market for
risky mortgages. Firms like Bear Stearns, Lehman Brothers and Goldman
Sachs had started bundling home loans and selling them to investors —
bypassing Fannie and dealing with Countrywide directly.

“You’re becoming irrelevant,” Mr. Mozilo told Mr. Mudd, according to two
people with knowledge of the meeting who requested anonymity because the
talks were confidential. In the previous year, Fannie had already lost 56
percent of its loan-reselling business to Wall Street and other
competitors.

“You need us more than we need you,” Mr. Mozilo said, “and if you don’t
take these loans, you’ll find you can lose much more.” 

If Fannie Mae were a government agency, they could have said, great, the
market is now doing the job, we are no longer needed. But, as a
corporation with stock holders, they had to work at staying in the
market. Well, that is already a long-winded reply to a widely broadcast
email. But Card and many others spouting the same line are pots calling
kettles black when it comes to one-sided analysis.
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