As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Tuesday, April 21, 2009

Spitzer Returns

Newsweek writes an article about the attempted comeback of Eliot Spitzer. They ask "can he become a public figure again" in an article making him a public figure again. Also, Spitzer has a column for Slate, which is owned by the same parent company as Newsweek. Michael Wolff is absolutely right to point it out.

But putting that all aside, I agree with Ezra Klein that Spitzer has a unique voice that is simply right for the times. He has been talking about the need for regulating the banks, and not just talking but acting on it, for a long time. This is from 2004:

On the surface, predatory lenders are doing nothing more than seizing a "market opportunity" for refinancing or home-improvement loans in lower-income communities. To be sure, such communities desperately need credit. And it stands to reason that the prices and terms will be less favorable to borrowers whose financial circumstances are troubled or limited. In this sense, predatory loans are the natural outcome of a competitive market.[...]

[But] it is difficult to imagine a less rational, less efficient economic practice than lending of this sort. At the micro-level, it results in a gross misallocation of costs-- imposing higher costs than the market requires on those least able to bear them. At the macro-level, it denies lower-cost capital to whole classes of persons who would otherwise qualify for it and to neighborhoods whose economic vitality depends on it.

In these circumstances, government must step in to curb predatory lending and encourage the flow of fairly priced capital to sectors where it is needed and will be well-used. Filling a gap left by federal inaction, state enforcement efforts in this arena have centered on identifying the valid economic criteria considered in mortgage underwriting and compelling lenders to focus on those factors--not on preconceptions, prejudices, or predatory instincts--in determining how to price home mortgage loans. The point is not to protect people from their own bad decisions or, conversely, to guarantee that mortgages be granted to specific persons or groups on specific terms--that would violate the principle of market freedom. The point is to support equal opportunity and to ensure that borrowers are charged rates and fees based upon their status and qualifications as economic actors in the mortgage market, not upon their diminished access or market savvy or their race.

This was written years before anyone "discovered" the subprime disaster. Simply put, we should not sacrifice valuable insight and opinion on the altar of sexual peccadilloes. Spitzer was an idiot for soliciting prostitutes but his experience is valuable, perhaps too valuable to ignore.

Labels: , , ,