We have learned . . . nothing!

Via Dissecting Leftism, a WSJ article about how the Federal Housing Administration is taking over the GSE's role in pushing worthless mortgages:

Last year banks issued $180 billion of new mortgages insured by the FHA, which means they carry a 100% taxpayer guarantee. Many of these have the same characteristics as subprime loans: low downpayment requirements, high-risk borrowers, and in many cases shady mortgage originators. FHA now insures nearly one of every three new mortgages, up from 2% in 2006.

. . . .

[B]eginning in 2007, the Bush FHA, Congress, the homebuilders and Realtors teamed up to expand the agency's role.

The bill that passed last summer more than doubled the maximum loan amount that FHA can insure -- to $719,000 from $362,500 in high-priced markets. Congress evidently believes that a moderate-income buyer can afford a $700,000 house. This increase in the loan amount was supposed to boost the housing market as subprime crashed and demand for homes plummeted. But FHA's expansion has hardly arrested the housing market decline. The higher FHA loan ceiling was also supposed to be temporary, but this year Congress made it permanent.

Even more foolish has been the campaign to lower FHA downpayment requirements. When FHA opened in the 1930s, the downpayment minimum was 20%; it fell to 10% in the 1960s, and then 3% in 1978. Last year the Senate wisely insisted on raising the downpayment to 3.5%, but that is still far too low to reduce delinquencies in a falling market.

Because FHA also allows borrowers to finance closing costs and other fees as part of the mortgage, the purchaser's equity can be very close to zero. With even a small drop in prices, many homeowners soon have mortgages larger than their home's value -- which is one reason FHA's defaults are rising.

My guess is that, with 100% guarantees, this new collection of bad loans will not cause credit markets to freeze and balance sheets to crater. But it is yet another way in which government is shoveling the (future) taxpayer's money into the black hole of the housing market with little in the way of oversight, let alone actual appropriation.

Although . . . in the context of Obama's budgets, even if the whole $180B per year defaults, it doesn't look like as much as it did a year ago.

But it hurts to see us making the exact same mistakes that lead to the housing bubble in the first place. What a terrible thing our government has become, growing in power in greed in direct proption to its invincible ignorance.

Changeling

I watched the movie Changeling last night on DVD. A few thoughs:

• First, this was an excellent movie. Director Clint Eastwood went to great lengths to recreate the world of 1920s Los Angeles. He took the artistically risky step of hewing closely to the timeline of the real events on which the movie is based; thus the movie runs over two hours and covers a period of seven years, with little in the way of a climax. Happily, although many elements in the film can be construed as raising "women's rights" issues, my impression is that Eastwood deploys these for the purpose of period setting rather than liberal preachiness. His most glaring historical departure was making the police captain J. J. Jones into more of a "bad guy" than he really was, although even this was more restrained than we have any reason to expect from Hollywood.

• The film credibly raises the issue of the way large bureaucracies ultimately grow to serve themselves rather than accomplish their stated mission. In this case, we see the LAPD mainly interested in "solving" the Walter Collins case (i.e. putting it in the department's win column) rather than finding the real Walter Collins. It also shows the abuse of Psychiatry in the 1920s, particularly the way the state mental hospitals had been subverted in the service of police corruption. The movie also shows the double-edged nature of public scrutiny: it was especially in its efforts to avoid criticism that the department rushed the case to a premature conclusion and then tried to cover up its mistake.

• Again, Eastwood went to draw the audience into the film's time and place. One of the features the movie's verisimilitude was the racial composition of 1920s Los Angeles. LA didn't have much of a black (or, evidently, Hispanic) population until World War II; hence, the film contains no black characters, and I only caught one fleeting glimpse of a black face at all. In the "making-of" bonus feature, Angelina Jolie speaks tellingly of how beautiful Los Angeles was back then, and the set director speaks of the challenge of finding a neighborhood in LA that didn't have fences. "LA in the 1920s didn't have fences," he said. "We've become such a fenced-in society since then."

  Gee, I wonder why that is.

  The society as portrayed in the movie has a "high trust" vibe to it. People expected to enjoy the community of their neighbors, and the architecture reflects that expectation. The houses of that era, like my house, were built outward, creating a shared space. More modern suburbs are built inward, replacing porches with decks, and never placing windows on the sides of the house where you might be reminded that you have next-door neighbors at all.

  The movie also shows Christine Collins having only momentary misgivings about leaving her nine-year-old son alone all day when she is called into work at the last minute. Few parents would do that today, partly because of our intensive parenting styles, but also because we worry about all the bad guys in the world.

  The events of the movie, of course, show how easy it is for a bad guy to abuse a high-trust society, freeloading, so to speak, on that trust for the purposes of kidnapping and murder.

• I'm not an expert on the socio-economics of the 1920s, but the Collins neighborhood appeared to my eyes implausibly upscale for a single mom working as a telephone switchboard manager. (The Collins' actual neighborhood has since been paved over by a freeway.) I would estimate the present value of the house used in the movie to be in excess of $1M, well outside the reach of all but the rich, especially considering the home financing options available in the 1920s.

More Geoffrey Miller

Steve has more quotes from Miller's Spent. A sample:

Alumni of [elite universities] work very hard to maintain the social norm that, in casual conversation, it is acceptable to mention where one went to college, but not to mention one’s SAT or IQ scores. If I say on a second date that “the sugar maples in Harvard Yard were so beautiful every fall term,” I am basically saying “my SAT scores were sufficiently high (roughly 720 out of 800) that I could get admitted, so my IQ is above 135, and I had sufficient conscientiousness, emotional stability, and intellectual openness to pass my classes. Plus, I can recognize a tree.” The information content is the same, but while the former sounds poetic, the latter sounds boorish.

Jack Kemp, R.I.P.

Jack Kemp faded from public view after the 1996 election, leaving us with a mental image of boundless energy and eternal youth. So Saturday's news came as a shock: Kemp died? But he was so young!

I supported Kemp's primary run in 1988, and was enthusiastic about his 1996 effort to save the Dole campaign. Kemp, like Ronald Reagan, radiated optimism, humanity, and progress: indeed, he exactly embodied my aspirations for conservatism. Kemp was a conservative version of Barak Obama: free markets had solved the economic problem; all that remained to us was to spread the blessings of enterprise to larger swathes of the globe, where inside every African, Arab, and Mexican was an American struggling to get out.

This vision had great appeal to me personally, although the 1991 recession reminded me how fragile our prosperity really was. But it was 9/11 that spelled the end for Kemp's optimistic view of the world. The world, it turned out, was much darker and dangerous than we had expected. We were not, it turned out, the nation everyone wanted to love, and our civilization was not the envy of the world.

And most significantly, we discovered that inside every African, Arab, and Mexican is not an American struggling to get out. These people have their own racial destinies to follow, destinies that are no more compatible with our way of life than we have the ability to direct them.

UPDATE: (Not the Onion.) Arlen Specter (D-Penn) blames Kemp's death on the GOP.

New Links from FreedomWorks, NRA

New links to the left:

• Get a free National Rifle Association membership!

• Help FreedomWorks stop cap and trade.

Geoffrey Miller on Sex Selection

Steve quotes at length from Geoffrey Miller's book Spent: Sex, Evolution, and Consumer Behavior:

The accuracy of person perception tends to improve with age, as we learn, gradually and painfully, which behavioral cues are the most reliable indicators of personality, intelligence, and moral virtues. We learn which situations reveal the most diagnostic information about someone’s true character. We learn how to see through first impressions.

This explains why the dating choices made by teenagers have always seemed appallingly stupid to their parents. Teenagers are overly influenced by the traits that are easiest to assess (physical attractiveness and status among peers). By contrast, parents have decades more experience in assessing the harder-to-discern traits, such as conscientiousness, agreeableness, emotional stability, and intelligence, and in appreciating the longer-term benefits that these traits convey in any human relationship. This ability to judge character was considered a major part of wisdom, and a cardinal virtue, before consumerist capitalism made concepts like character, wisdom, and virtue sound unfashionable. [Emphasis added.]

Read the whole thing. Miller also wrote The Mating Mind: How Sexual Choice Shaped the Evolution of Human Nature.

Roundup

I read a few of Megan's recommendations this week. A few thoughts: Regarding Ross Douthat's debut NYT column, in context with the sweep of his work, I would agree with his point that Cheney's version of conservatism (as Ross describes it) isn't going to be politically useful going forward; indeed, it wasn't particularly useful when he was vice-president. It would be a bit much to expect him to have stopped the war -- that was a mistake that almost the entire political class made -- but lowering credit standards for home mortgages was exactly the kind of thing that having the "grownup" Cheney around was supposed to prevent.

But that said, I have two criticisms. On Ross's charge that Cheney is doing something unseemly by pushing back on the interrogation issue, I have to point out that Obama picked this fight, not Cheney. Cheney has every right to defend his administrations record, especially when it is, in fact, defensible. Obama continues to act like he's still campaigning instead of actually running the country, blaming his Republican predecessors for the deficits he himself is creating.

And second, as Ace points out, there is something a little . . . unseemly about Ross using his first column in the NYT to attack other conservatives. No doubt Ross believes he is buying himself credibility with likely NYT readers this way, but it only pays out when he subsequently persuades them to embrace a conservative policy. We'll see how it works. Regarding Charlotte Hays' WSJ review of Jennifer Scanlon's biography on Helen Gurley Brown, I offer this quote without comment:

One of Helen's disappointments was that she was unable to get [her book "Sex and the Single Girl"] officially banned by any prominent priest or preacher. "Letty dear," she wrote to Letty Cottin Pogrebin, her publicist, who would go on to become a prominent feminist, "I don't know how to get a public denunciation -- a nice, strong, snarly, vocal one -- from some religious leader, but it is a possibility." She tried unsuccessfully to provoke the Daughters of the American Revolution. Unaided by banning, the book nonetheless became a world-wide best seller.

Regarding the NYT report on the Hobbit remains found on the island of Flores: I assume that paleontologists know what they're doing, but as anyone considered the possibility these might be the remains of plain ole' children? Just askin'.