Paul Krugman writing in the New York Times today says conservative ideology destroyed proper lending regulation, and says that it was conservative thinking that led directly to the “unmitagated disaster” the nation is experiencing in the mortgage and housing industry. Excerpts from the article:

• Apologists for the mortgage industry claim, as Mr. Greenspan does in his new book, that “the benefits of broadened home ownership” justified the risks of unregulated lending. But homeownership didn’t broaden. The great bulk of dubious subprime lending took place from 2004 to 2006 — yet homeownership rates are already back down to mid-2003 levels. With millions more foreclosures likely, it’s a good bet that homeownership will be lower at the Bush administration’s end than it was at the start.
• Meanwhile, during the bubble years, the mortgage industry lured millions of people into borrowing more than they could afford, and simultaneously duped investors into investing vast sums in risky assets wrongly labeled AAA. Reasonable estimates suggest that more than 10 million American families will end up owing more than their homes are worth, and investors will suffer $400 billion or more in losses.
• So where were the regulators as one of the greatest financial disasters since the Great Depression unfolded? They were blinded by ideology. “Fed shrugged as subprime crisis spread,” was the headline on a New York Times report on the failure of regulators to regulate. This may have been a discreet dig at Mr. Greenspan’s history as a disciple of Ayn Rand, the high priestess of unfettered capitalism known for her novel “Atlas Shrugged.”
• In a 1963 essay for Ms. Rand’s newsletter, Mr. Greenspan dismissed as a “collectivist” myth the idea that businessmen, left to their own devices, “would attempt to sell unsafe food and drugs, fraudulent securities, and shoddy buildings.” It’s no wonder, then, that he brushed off warnings about deceptive lending practices, including those of Edward M. Gramlich, a member of the Federal Reserve board. In Mr. Greenspan’s world, predatory lending — like attempts to sell consumers poison toys and tainted seafood — just doesn’t happen.
• Mr. Greenspan wasn’t the only top official who put ideology above public protection. Consider the press conference held on June 3, 2003 — just about the time subprime lending was starting to go wild — to announce a new initiative aimed at reducing the regulatory burden on banks. Representatives of four of the five government agencies responsible for financial supervision used tree shears to attack a stack of paper representing bank regulations. The fifth representative, James Gilleran of the Office of Thrift Supervision, wielded a chainsaw.
• Also in attendance were representatives of financial industry trade associations, which had been lobbying for deregulation. As far as I can tell from press reports, there were no representatives of consumer interests on the scene.
• Two months after that event the Office of the Comptroller of the Currency, one of the tree-shears-wielding agencies, moved to exempt national banks from state regulations that protect consumers against predatory lending. If, say, New York State wanted to protect its own residents — well, sorry, that wasn’t allowed. Of course, now that it has all gone bad, people with ties to the financial industry are rethinking their belief in the perfection of free markets. Mr. Greenspan has come out in favor of, yes, a government bailout. “Cash is available,” he says — meaning taxpayer money — “and we should use that in larger amounts, as is necessary, to solve the problems of the stress of this.”
• Given the role of conservative ideology in the mortgage disaster, it’s puzzling that Democrats haven’t been more aggressive about making the disaster an issue for the 2008 election. They should be: It’s hard to imagine a more graphic demonstration of what’s wrong with their opponents’ economic beliefs

From the New York Times, “Blindly Into the Bubble,” written by Paul Krugman

Stan Hirtle said recently, “That sounds as much like elitism, or even dictatorship, as democracy.” His comment made me think. A system of elitism is quite opposite from a system of democracy. Elitism asserts that the wisdom of common people cannot be trusted, and that the system must be structured so that only those most deserving can have power in the system. Dictatorship, I guess, is simply an extreme expression of elitism.

Elitism has been an operational philosophy in American life since our revolution. Not allowing slaves, women or those devoid of property to vote is a manifestation of elitism. Not allowing the direct election of senators came from a philosophy of elitism.

Unfortunately the elitism of a former day — that empowered kings and princes with a “right” to rule — is still very much with us today. The presidency of George W. Bush is stunning evidence. Today’s elitism says that those with the most money have the right to have the most influence.

The whole suppression of our democracy that we suffer from today is not accidental or happenstance, but is best explained as part of a bigger movement that seeks more and more the advancement of a system of elitism. If big money and big corporations thought that the vitalization of democracy was in their interest, we can be sure that our democracy would be transformed. Our system of public education advances our system of elitism. Gerrymandering and the influence of big money advance the power of a system of elitism.

The problem is, our system of elitism does not advance the best and the wisest. History shows it again and again as a failed system. Our system of elitism does not advance our best or wisest leaders and it does not advance the best and wisest ideas. The presidency of George W. Bush should be a stunning example to anyone who doubts the truth of what I am saying. Our system of elitism does not seem much concerned about generating and promoting ideas to create more freedom and more justice within our own country.

Where is the outrage at what is happening to our country?How can we find comfort in the cherished belief that our nation acts as a democracy when, before our eyes, our government again and again acts to mock that belief? Is it through democratic action that those at the top one percent of income receive the biggest government tax reductions? Is it through democratic action that under George W., our national debt has increased by over $3 trillion? Is it through democratic action that we invaded Iraq?

The idea that is projected is that, yes, these unwise actions happened as a result of our system of democracy, because, these actions were all validated by a congress that was democratically elected. B-O-L-O-G-N-A! Remember, 90% of U.S. House districts are “safe” districts. These unwise actions happened because we have allowed a system of elitism to overwhelm what should be our system of democracy. These unwise actions happened because our system of democracy is broken.

In Our Democracy Must Be Revived — If We Hope To Achieve The Dreams of Our Wisest and Best, the article I wrote that Hirtle responded to, I quoted John Dewey as saying that our schools should provide for all students what the best and the wisest among us want for their own children. Dewey’s standard for schools is the same standard we should have for our government. If our democracy was working effectively, as it should be working, the wisest of us would have political power and the best ideas would be the basis for our government’s actions.

The fact is obvious and plain to see: our system of elitism has failed us. And, if our system of elitism is not checked, we can expect, in short order, even greater disasters to befall us.

Let’s give a system of democracy a chance. The requirement for a system of democracy to work effectively is that there be open information, open communication and that there be an active community whose members seek an understanding of the common good. Our opportunity is to develop DaytonOS into a meaningful source of information and an effective means for citizen communication. Our opportunity is to make DaytonOSan effective community that will help transform our failed system of elitism.

Someone said, “Huckabee has a right to believe whatever he wants to believe about evolution.” Interesting thought. But it seems to me, however, Huckabee, himself, generally would reject this notion. Huckabee, a Baptist preacher, would disagree with the assertion that a person has a right to define his or her own truth. Huckabee believes in revealed truth and firmly rejects the notion that a person has license to determine, on his or her own, what is right and what is wrong.

Our constitution gives us the right to think as we want and to believe as we want. We are free to think in error. But every rational person wants to think in ways that are based on truth. The thought provoking question to consider is: How do we know the truth? Huckabee’s answer is that truth is revealed in the Bible and his reason for rejecting the theory of evolution is because he feels it is a theory that disagrees with truth revealed in the Bible.

Recently, Huckabee was asked about evolution, and he replied, “I’m not sure what in the world that has to do with being president of the United States.” But Huckabee, by denying the validity of evolutionary theory, is expressing a view of truth that is very much out of the mainstream. Any idea a presidential candidate advances, particularly those out of the mainstream, should be justified by the candidate. His view of evolution raises important questions that should be asked of every presidential candidate: In general, what is the basis for your thinking? What is your basis for knowing the truth?

Huckabee’s reasoning that the truth of evolution is determined by the Bible raises a legitimate question as to what other ideas Huckabee would advance based on the Bible. The Bible, for example, says a lot about Israel. Does Huckabee, I’m wondering, have an understanding of Bible truth that, if elected president, would drive his middle east policies and would drive the formation of U.S. policy toward the contemporary state of Israel?

Huckabee, in talking to Chris Matthews said, “If you want to believe that you and your family came from apes, I’ll accept that.” His religion teaches that a person has a choice whether to believe in God or not, whether to believe in miracles or not, whether to believe the Bible or not. Huckabee projects the idea that just as a person has a choice whether to believe in the truth that God exists or not, a person has a choice whether to believe in the truth of the theory of evolution or not.

To develop this idea of choice, Huckabee wants to advance what is advertised as a competing theory to evolution — The Theory of Intelligent Design. But what is clear is that what Huckabee advances as a competing scientific theory is not a competing scientific theory at all. Huckabee is not advancing the theory because he understands the science involved. He is recommending that Intelligent Design curriculum be added to the public school’s science curriculum, not to improve science education, but, so that students studying science will be influenced by creationists’ views.

What is missing in Huckabee’s view of evolution is an appreciation for how strong evolutionary theory is, how well it has held up, and how useful it has been in guiding scientific advance. Evolution is not simply a whimsical idea; it is not “just a theory.” It is a powerful and useful guide that continues to help increase a scientific understand of our natural world. Since the time it was articulated in 1859, there have been zillions of scientific discoveries. Certainly Darwin knew nothing about DNA, cell chemistry, microbiology. New scientific discoveries have only strengthened the conviction of scientists that the basic theory of evolution is true. How many scientific ideas that were supported by the scientists of 1859 are still supported by scientists of today? It is wrong to advance the idea that a mainstream scientist can simply choose a theory to guide his or her scientific work — like choosing an automobile. Evolutionary theory through almost 150 years of scientific investigation is still the established theory of science and there are no reasonable alternatives on the horizon that dispute it.

Huckabee does a great disservice by saying that he thinks the theory of evolution is not true. He does a disservice to his faith, because his evolutionary views are a discouragement to truth seekers. As a Baptist preacher, he should be lifting up the spiritual truths of the Bible that inspire individuals to service, to problem solving, to goodwill, to brotherhood, and that show the way to peace. Instead, by denying evolutionary theory and making cracks about humans not coming from monkeys, he is contributing to a negative and wrong stereotype of what it means to be a person of faith.

Huckabee’s denial of evolutionary theory also is a great disservice because it champions a wrong notion about scriptural authority. Islam also has scripture. And Islamic radicals tell their children that the literal words of their scripture should guide their thinking and their behavior. Shouldn’t a president champion the idea that the authority for knowing truth is judgment and reason, not scripture?  Yes, our authority to discern authentic inspiration goes beyond what is rational.  I know that Mozart is inspired through a higher reasoning that transcends the reason that evaluates a tax plan., but a president must champion the rational.  A rational approach is the only hope we have to move toward a positive future.

Huckabee and all presidential candidates should be emphasizing the words in the Bible that say, “Come now and let us reason together.” Reasoning together means that together there is an honest commitment to finding the truth and to solving problems. Isn’t the thinking that finds truth and solves problems, the thinking that can be quantified, scientific thinking? We need a commitment to scientific and objective thought — and to a process that emphasizes reasoning together.

Huckabee seems a well meaning person, but it is not helpful for a person of stature to advance the notion that truth is divorced from reason. We can’t expect to have much of a future if, as a nation, we simply believe to be true whatever we want to believe to be true. In addition to wanting to think that the theory of evolution is not true, that our ancestors were not apes, etc., people want to believe all sorts of things: smoking cigarettes is not harmful to one’s health, the holocaust didn’t happen, tax cuts actually increase tax revenue, increased military spending is the way toward world peace. It is important that you do not take any compromises with your health. Visit Legacy Healing Tampa to get the experts get through the tough process of recovering. Wasn’t the whole Nazi movement based on crazy ideas — ideas that would never have withstood any legitimate process of thinking — that, for whatever reason, millions of people wanted to believe were true? If the authority for what we think is true boils down to what amounts to wishful thinking, we are in big trouble.

Our whole country and our whole world needs to commit itself to finding and living according to truth. The discussion about evolution will disappear, again, but it will have been a useful discussion if it encourages the important questions about truth: How do we know truth? What is the authority for truth?

We need a president who can lead us into a better future. For Huckabee to show he is the one to help us get to a better future, he needs to show that he is a man of reason, not that he is a person of narrow religious views. Presidential candidates must show that they are bound to the authority of reason. But Huckabee’s evolutionary views do not appear to be based on the authority of his own thinking and analysis, but rather, it seems to be based on the authority of scripture and his religion’s traditional understanding of truth.

By taking a stand on the nation’s stage that he denies the truth of a theory for which there is universal scientific consensus, Huckabee is showing us a little bit about how he thinks, how he knows the truth. At the very least, it seems clear that Huckabee’s thinking is greatly influenced by his religion. What influences the way a president thinks is an important matter. His stand against evolutionary theory makes me wonder if, to determine what is true, Huckabee as president would rely on what might be called religious thinking, rather than relying on scientific thinking. His denial of evolutionary theory, to me, puts his qualification for the presidency into question.