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Jack Hamilton’s ideology is an inadequate substitute for knowledge
Jack Hamilton’s Sound-Off ("The end is not near (except for some government officials)", Oct. 4) was more off the mark than soundly on it. If nothing else, Mr. Hamilton showed once again that ideology is an inadequate substitute for what was once described as profound knowledge.
I can understand Mr. Hamilton’s frustration with real estate development regulations. Back in the late 1990s and in 2003, I helped navigate two multimillion-dollar projects through the maze of requirements of Seattle’s Department of Land Use, including public hearings, and it was expensive, wasteful, and no fun for anyone. In between the two projects, Rick Krochalis, the former director, called Seattle’s land-use regulations possibly the most difficult to traverse in America (unless your name is Paul Allen).
Since I no longer participate in real estate developments or care to, I won’t dispute or comment on Mr. Hamilton’s cited figures for the economic impact of regulations on home costs. It is Mr. Hamilton’s conflation of several issues beyond their actual places in the situation and his use of ideology within the conflation that I disagree with.
The present national, and rapidly becoming international, financial-center meltdowns were not caused by the state of Washington’s regulations or as political and polemical ax-grinders have tried to assert, by President Carter’s Community Reinvestment Act of 1977 or by fictitious claims that President Clinton pressured depository banks to make harebrained loans, especially since almost all of the outrageous growth of the subprime market involved unregulated entities.
Robert Rubin, Clinton’s treasury secretary, and Alan Greenspan have big roles in the mess due to their championing of the repeal of the Glass-Steagall Act of 1933. Perhaps that regulatory law had outlived its usefulness in 1999, but the rapacious human greed that triggered its creation in the first place was and is still around and has been left in place without many checks. Present treasury secretary Henry Paulson apparently stood by deaf, dumb and blind and refused to use any remaining regulations to control the industry.
To deal with the shambles they helped to bring on, Mr. Paulson and President Bush have requested a $700 billion feeding trough created by taxpayers to enable the wealthy fools who created the mess to survive. Mr. Paulson has asked to be given czar-like control of the money without accountability to Congress. There is an old Russian proverb that a country needs a czar like a village needs an idiot. Given the recent American track record of citizens’ abdications, we’ll probably get the czar with only an occasional grumble from the citizenry on radio talk shows or in cranky letters to newspapers.
Mr. Hamilton did not note in his article that none of the money is presently for the poor souls with screwball mortgages but is for the wealthy who reeled them in. The poor and minorities did not, indeed could not, create a situation of the existing magnitude, unless one wants to consider superrich Caucasians such as Lehman Bros. CEO Richard Fuld, Jimmy Cayne of Bear Stearns, and the senior leaders of AIG to be minorities. They sure can’t be truthfully called poor.
The huge string of unsold Miami luxury condominiums, tens of thousands of them, were not built for the poor or subprime borrowers. Reckless lending by unregulated lenders; a blind, laissez-faire executive branch; and flat-out, unchecked greed fueled by a “bubble” created using money borrowed from China bears the bulk of the responsibility for the catastrophe, not regulations of any sort. If Mr. Hamilton has a beef with Washington’s regulations and its educational system, fair enough; many others do also. However, he should leave his ideology out of it and keep his writing real.
ROBERT A. TAYLOR