FOARP hits the nail smack on the head:
…I have to say that I find her to be quite shallow. The fact that she poses as an economist (although, one who seemingly doesn’t know the most basic things about economics) is really what gets my goat about her.
Perhaps I got a little too detailed in that post, there. It was so long that it broke the spacing on my theme; I had to cut it down and put the excess into a separate page. After, of course, stripping the site down and breaking as many things as possible. I believe I used to have color in my dates at the left of each post, but not any more, it seems. I can’t check google’s cache because that is permanently blocked (with no known work-around), and I am getting nothing over at the Wayback Machine. So I think this is called the ‘lived in’ look, and I am going to roll with it.
And of course Brad Delong comes to McArdle’s defense, right when Typepad’s comments are blocked. Actually, interestingly it seems only Delong’s comments, not Typepad as a whole, are blocked. Hmm. I can read other comments but the dialog to comment doesn’t load.
Look, we all know that Brad gives far too much credit to Megan as an honest dealer in ideas for some unknown reason. He posts links to her from time to time, and he is the only blogger I have read who does so approvingly. McArdle’s supposed virtue of earnestness might be of some weight, but it hardly makes up for her stubborn, irrational ideological bent. McArdle was handed a set of ideological blinders when she was in school, and she is most certainly not going to take them off.
Delong’s complaint is a valid one, (the NYT’s reporter once again proves how clueless and mix-up the entire industry is), but he goes too far in defending Megan.
Look, McArdle has ideological capital invested in conservatism, and in the case of the sub-prime meltdown, that means she is ideologically conditioned to blame a bunch of bad investors, greedy people who thought they were going to get rich. So, she muddies the waters by attacking Andrews.
I am not going to argue the merits of Andrews’ story. Yes, he may well be an idiot for deleting his wife’s two bankruptcies, but the entire story of the subprime is a bunch of idiots, with many different motivations, getting loans they could not afford. So this, to me, is a fine example of the genre. Idiot gets liar’s loan he can’t pay. He happens to be a NYT economic reporter, but that is not particularly relevant. But if I read the article correctly, it was his credit score that was used to get the mortgage. It seems simple enough to me, but since it doesn’t fit Megan’s ideological needs, she begins to obsess about it. He must be bad!!
It couldn’t be either (1) evidence that regulations are too lax, or (2) a failure of the glorious ‘free’ market, because both of those outcomes are ideologically unacceptable. It couldn’t just be a market out of control, where Andrews’ good credit score plus the interest in receiving a commission caused their agent to help them find a house (that had probably ‘appreciated’ 25% over the past five years) and then helped them get as large a loan as possible while telling them that the house will certainly appreciate further over the next few years, plus you are sure to get more work, and so on and so forth. Ever met an aggressive salesman looking for his commission? I just don’t see this as that difficult. It shouldn’t be all that complicated. But it couldn’t be about the legality of ‘liar’s loans’, because that would mean that the beautiful invisible hand that Megan has heard so much about is not working.
Brad, seriously, look at the language she uses in talking about the Andrews’ behavior, and tell me if this is the language that will help us understand and prevent these kinds of breakdowns:
Should defaulters feel bad…[some say] the credit system is morally neutral, at least from the point of view of the debtor. The banks knew when they lent to you that there was a risk of default, and if you do, you pay the penalties. Why feel guilty?…if you default, the worst thing that generally happens to you is that it’s hard to get credit. Yet, the way the credit card companies allegedly bring on your default is by giving you credit.
…why should you feel morally obligated to repay, at great personal cost, a company which feels no obligation to you? No particular reason, maybe, except that the belief in a moral obligation to repay one’s debts may be the only reason we can have both credit, and relatively light legal sanctions for overusing credit. If people really acted as if the choice to default were morally neutral, we’d either lose most of our credit system, or the legal rules would have to be much more punitive.
Is this the right language, the right terminology for our purposes? I say, resoundingly, no, it is certainly not the right direction. It is the conservative vocabulary of blame, of zero-sum games. Does Megan have any idea how many bankruptcies are forced by contentious divorces every year in the United States? No, and the idea that such things happen probably never entered her head.
Megan McArdle is a conservative apparatchik, and that fact alone has paid her rent for years. She is not an honest dealer in information and ideas. Her boyfriend or fiancé or whatever is is an astroturfer, according to the Wall Street Journal, and an ideologue who would like to start another Politico or Red State. Conveniently, she muddied the waters about who funded the ‘Tea Party’ astroturfers just a few months after her boyfriend left the employ of the very company at the heart of that scandal. (And a company that is funded by rich right-wing donors, after all. Fancy that!)
God forbid she limit his further employment in the field he has chosen for himself. Ooh, did I actually read that he is or was working with the protege of Lee Atwater? Now that has got some conservative cred right there.
We have no time for those who would confuse issues due to their own personal interests. There is simply not enough time to cut through the confusion spun by McArdle’s ‘ilk’. We face too many pressing problems as it is. Megan McArdle is a net loss.
The stupidest thing is all the talk about moral duties to pay back debts. At one level, yes, as an adult citizen you have a moral duty to pay back what you’ve borrowed, but at the level which you expect an economist to write – that of examining how the system works, it is a total failure to understand. No, it most definitely NOT the moral duty which makes the system of credit work, instead it is the liability incurred under civil law and the force of self-interest which would normally prevent people lending money to those who cannot pay it back. We’re you to rely on a moral duty, most people would find the moral imperatives of putting food on the table and looking after their loved ones far more pressing.
The decision as to how punitive the laws governing lending/borrowing, outside of criminal activities like loan sharking, should be one based on economics and on what’s best for the economy as a whole. It should not be based on morality. God will not punish you for not paying back your loan, in fact, in case you missed it, him and his son don’t actually like all that lending/borrowing stuff, and your destined for hell just for having a healthy balance in your bank account.
Yes, I read the NYT piece, no I can’t say that I think I’d ever be stupid enough to get myself into that kind of situation, but then I guess nobody does. Stupid? Yes. Immoral? At every point he thought he could pay it back, morality doesn’t come into it, any more than it makes you a bad person if the business you start up fails to turn a profit. You’re not a bad person for failing on your repayments (and as far as I can gather, Andrew’s didn’t even do that) at worst you’re just bad at business, and it’s from this perspective that these problems should be approached.
Really, what this boils down to is the idea held by some among the rich that they are rich because they are morally good people, rather than being good at their chosen professions, and that the poverty of others is due to personal failing rather than professional ones. This is self-congratulation at its worst, but McArdle sees nothing wrong with peddling it.
Great analysis, FOARP, right on.
I went over there again recently, and I really have to stop doing that.
Now she has picked up the right-wing meme that Obama is personally picking Republican-owned GM auto dealerships to be eliminated.
She can’t understand basic statistics, whatsoever. Witness, if you will:
“Democratic and Republican dealers are unlikely to be found in the same place, and the rural counties that tend to be red are probably less profitable. I would be less surprised to find out that the administration rescued specific donors from the hit list than to find that they deliberately closed Republican dealerships.
Still the administration should answer this; it gives the appearance of Chicago-style corruption that is going to further taint a Chrysler takeover which has already left a number of people in the business and finance community wondering how firm the rule of business law is these days.
Update: Nate Silver points out that most auto dealers are Republicans. That doesn’t quite explain why so far only one Obama donor has been closed down, but it makes it difficult to definitely conclude bad faith.”
Makes it difficult, it does, oh it does.
I.e. ‘red’ counties are GOP-owned, and blue are not. It was so simple before Nate mucked things up.