“The fundamental problem that we’ve got in America today – apart from the economics – is that conflict makes good politics. Sharp ideology and all this stuff that’s been very successful politically, but it’s lousy for economic policy making. If you look at the places that are really successful in America today – look at Silicon Valley, look at the computer simulation boom in Orlando and lots of other examples – those places without exception you have cooperation between a vibrant private sector and a smart government. And cooperation is great for the economy, but it doesn’t work as well politically. So we’ve got this big disconnect between politics and economics and until we close it, we’re going to have a hard time coming back.” — Bill Clinton, Meet the Press on Sunday. (Check out this great essay by Lea Marshall on “The Power of And” on our We the Wiki)
Thanks to my conservative friend Lea for finding Duck!Rabbit! (we’ll leave it to your imagination as to how she found such a thing).
Co-author Tom Lichtenheld describes the first incarnation of DuckRabbit – before it was a children’s book – as the most memorable concept from his college career, first introduced by a professor in a lecture on Freud and Zen:
‘…the simultaneous presence of two seemingly contradictory realities in one space challenges our instinct for rational perception. to wit, the “duck rabbit.” ‘
The children they drew the DuckRabbit for thought it was really “coooool.” Perhaps adults might gain from enjoying rather than gnashing teeth about what Lea has dubbed (and I’m smart enough to jump onboard for) “the power of &.”
The DuckRabbit. Now officially the mascot of The Village Square.
Are you like me and horribly confused by just how we got to this economic precipice? Have you noticed two distinctly different versions of the story from each political campaign? Well, as usual, the operating principle – when seeking truth – is to find the AND rather than the EITHER/OR. Thanks to Fact Check.org and Time Magazine for this exercise in AND.
So, who’s responsible, using the “Power of &”?
The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.
Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.
Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.
Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.
The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.
Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.
Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.
Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.
The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.
An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.
Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.