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Reason Magazine - Contributors > Tim Cavanaugh
- Rant: Not Ready for Sub-Prime Players
Even cave-dwelling, 15-year-fixed-rate-paying troglodytes were close to hysteria this spring, spooked by speculation that the debacle in the sub-prime mortgage industry, which had already sunk industry leaders like Ownit and AmeriQuest, was on the verge of torpedoing the entire American economy. Senate Banking Committee Chairman Chris Dodd (D-Conn.) proposed a bailout of the multi-billion-dollar industry. Presidential hopeful Hillary Clinton called for a “foreclosure timeout.” A bill aiming to stop “predatory lending” practices is still moving through the Senate.
Strangely, though, homebuyers in Southern California, the epicenter of the sub-prime quake, don’t seem to have heard the news. Actual closing prices continued to climb throughout the industry crash.
The sub-prime meltdown comes in a context of debt panic—specifically, of other-people’s-debt panic. Liberal economists, values conservatives, and hug-the-middle moderates are in full agreement on this one: Poor people’s access to debt is driving them to fiscal ruination or worse. James D. Scurlock’s celebrated documentary Maxed Out collects horror stories—including youngsters driven to suicide by credit card debt—to prove the thesis that “banks and credit card companies are setting their customers up to fail.” Anya Kamenetz, author of Generation Debt, envisions debt-ridden young professionals as the new serfs. (The hard-luck bio on Kamenetz’ website includes the Dickensian detail that she “graduated from Yale seven months after the 9/11 attacks.”) Ambitious politicians and math-unencumbered reporters are in hot pursuit of the culprits: predatory lenders, indifferent regulators, Madison Avenue captains of consciousness—everybody except people who borrow large sums of money with no intention of paying it back.
The conventional wisdom used to say the poor didn’t have enough access to debt. One of the earliest products of Franklin Roosevelt’s New Deal was the Home Owners Refinancing Act, which provided mortgage money to more than a million borrowers over a three-year period. Harry Truman’s record shows a consistent effort to expand the amount of debt available to willing borrowers.
My favorite artifact of the period’s pro-lending mood is Fredric March’s great “collateral” speech from the 1946 film The Best Years of Our Lives. March, playing a rising bank middle manager who has just returned to his job after serving as an Army NCO in the Pacific, reads a rambling riot act to a banquet of porcine small-town bankers who have criticized him for providing loans to bad-credit-risk veterans. If we’d fought like bankers, seeking collateral for every risk and a guarantee on every expenditure, we’d have lost the war, he argues.
We can dispute the wisdom of federally guaranteed loans and mortgage purchasing, but it’s notable that the new economy March wanted helped to create one of the greatest booms in the country’s history: the postwar suburbanization of America, which is now derided by our own bien pensant classes, who claim there’s too much ready credit out there. The difference now is that it’s coming from the market rather than a package of government guarantees, from an industry that expanded to fill a demand and is now contracting as the demand shrinks.
In a sane world, we’d say this is a market behaving as it should, and marvel at an economy where so many people who were once locked into the renters market have gotten a chance at homeownership. Some of them have blown their chance by exhibiting the same kind of behavior that made them bad credit risks in the first place. But most have not. In fact, about nine out of every 10 sub-prime borrowers are still making their payments.
So our grandparents solved the not-enough-credit crisis, and Sens. Clinton and Dodd are well on the way to solving the too-much-credit crisis. What will they think of next? Whatever it is, there will be plenty of deadbeats, politicians, and people who can’t do math to cry that the sky is falling, even if home prices are not.
Tim Cavanaugh is an editor at the Los Angeles Times.
Discuss this article online. - Battle of the Blogosphere: Cavanaugh vs. Gillespie
Over at the website Jewcy, reason Editor-in-Chief Nick Gillespie and former Web Editor Tim Cavanaugh (now with The Los Angeles Times) engage in three days of peace, love, and misunderstanding about political blogs, the passing of Jerry Falwell, the GOP debates, and much, much more.
Read Day One here.
Read Day Two here.
Read Day Three here.
Discuss this article online.
- We the Living Dead
Pretend We’re Dead: Capitalist Monsters in American Pop Culture, by Annalee Newitz, Durham: Duke University Press, 183 pages, $21.95
Book of the Dead: The Complete History of Zombie Cinema, by Jamie Russell, Surrey: FAB Press, 309 pages, $29.95The Dominion of the Dead, by Robert Pogue Harrison, Chicago: University of Chicago Press, 159 pages, $14
The zombiephiles—that odd cohort of nerds, video game addicts, and mullet-headed grindhouse nostalgists who have made the flesh-eating zombie a central figure of modern culture—know all about chewed kidneys, shambling ghouls, moldering flesh, barricaded doors, deserted streets, and the all-important bullet to the brain. But most of all, fans of the rich, vibrant zombie narrative of the late 20th and early 21st centuries know about politics.
Ever since George Romero’s genre-creating Night of the Living Dead in 1968, and especially since Romero’s overtly political 1978 masterpiece Dawn of the Dead, highbrow revolutionary theorizing has stalked this graveyard of lowbrow pleasures. In his 1979 study The American Nightmare: Essays on the Horror Film, the esteemed cineaste Robin Wood declared that the zombie’s cannibalism “represents the ultimate in possessiveness, hence the logical end of human relations under capitalism.” J. Hoberman and Jonathan Rosenbaum’s 1983 study Midnight Movies called Night of the Living Dead“a remarkable vision of the late sixties, offering the most literal possible depiction of America devouring itself.” In a later reappraisal, a Village Voice critic explained that “the zombie carnage seemed a grotesque echo of the conflict then raging in Vietnam.”
The film historian Sumiko Higashi went completely around the bend in a 1990 essay, declaring, “There are no Vietnamese in Night of the Living Dead.…They constitute an absent presence whose significance can be understood if narrative is construed.” As subsequent genre pictures, trailing titles like Zombi 2 and Zombie Flesh Eaters 3, ate their way through America’s VCRs, Wood elaborated his original claims, averring in his 1986 book Hollywood From Vietnam to Reagan that the living dead “represent, on a metaphorical level, the whole dead weight of patriarchal consumer capitalism, from whose habits of behavior and desire not even Hare Krishnas and nuns…are exempt.” Take a bite out of that.
Two recent books belong to different strains of this wonderful critical tradition. Annalee Newitz’s Pretend We’re Dead, an unapologetically Marxist survey of horror films as studies in labor theory and racial politics, celebrates not only the poor zombie but also the mad scientist (cruelly alienated from the means of intellectual production) and the identity-stealing alien invader (a commodifier of family-cultural norms). Jamie Russell’s Book of the Dead is more of a fan encyclopedia, but it too makes impressive claims about how Dawn of the Dead“offers us a glimpse of a universe in which all spiritual values have been replaced by our awareness of the material realities of the corporeal and consumerism.”
Such readings can be silly and overdetermined, but they’re mostly right. From Night of the Living Dead to Homecoming (in which dead Iraq war veterans return from the grave to vote against the war), the zombie movie has been among the most consistently political forms in American popular culture. The politics tend to lean left, but zombie entertainment approaches a level of discontent more elemental than mere anti-capitalism or shopping mall burlesque. Apocalyptic and piously disdainful of the carnal realities of human life, zombie cinema is a shocking, uproarious meditation on the nature of death—on what, if anything, we owe to the dead.
Russell’s book helpfully explains that the word zombie didn’t app