Hillary's Chutzpah
Chutzpah heretofore has been most famously defined as someone who murdered his parents asking for mercy from the court because he's an orphan. But at the Nasdaq headquarters in Times Square yesterday New Yorkers got a new definition of chutzpah — an attempt to blame the sub prime mortgage crisis on Wall Street being made by a member of the Congress of the United States that has stood by while the dollar whose value it is charged by the Constitution with regulating has plunged to barely a quarter of its recent value and that for years has sought to steer lending institutions to extend mortgages to poor people in the first place.
Call it Hillary's chutzpah, for it was our Senator, front runner for the Democratic presidential nomination, who is advancing this idea. We don't fault her on the topic; she had a terrific sense of her audience, which was plenty eager to hear from her (or anyone in Washington) on the topic. She presented her case with her usual grace and friendliness, and some of the points she made — like a five-year freeze on hikes in interest rates on certain adjustable rate mortgages — are not so different in principle from measures that President Bush was advancing at the same time in Washington and that are expected to be announced today. Senator Edwards, speaking elsewhere, advanced similar proposals, as well, a coincidence that A.E. Kornblut of the Washington Post called "an act of striking synchronicity."
In the main, Mrs. Clinton made it clear that her idea of the right governmental policy for a country on the brink of recession is higher taxes, more government intervention, and Keynesianism. The next thing you know is that she's going to deal with the high incidence of heart attacks by passing a law subsidizing egg yolks. She is talking about increasing taxes on the most successful of our earners. She is quarreling with the tax cuts that ignited the Bush Boom. And she is advancing what our Nicholas Wapshott characterizes as Keynesian measures at a time when the dollar has fallen to less than an 800th of an ounce of gold from a 265th of an ounce of gold in but a few years. Running down the value of the dollar, incidentally, provides its own incentive for people to take on debt.
We don't wish to excuse any lender who was pressing debt on customers who could be expected to default. Mrs. Clinton made her case with much less of the hard-left, anti-business rhetoric with which, say, Vice President Gore began his presidential campaign in 2000. But it's hard to listen to a member of the Congress lecturing the creators of wealth, particularly at a time when the legislature in Washington is so much of the problem. What the Congress needs to do is give us classical supply-side measures. It needs to incent earning the next dollar, which means the opposite of the kinds of tax increases Mrs. Clinton wants. It needs to pass the trade agreements awaiting ratification in the Congress. It needs to stabilize the dollar and work toward a policy of sound money.
