Bailout Blame Falls to Carter and the Left
by Ross Nolan


Who would have thought that a half-baked social engineering policy left over from the Carter Administration would bring disaster to our economy over 30 years later? Congress finally passed a bail out bill on October 3 in response to the crash of the mortgage lending industry, which will cost the taxpayers $700 billion and give the Secretary of the Treasury the power to buy off bad loans. 

As politicians spend countless hours arguing about whose fault all of this is, students at UCSB are left wondering what, if any, effect this will have on them. Seven-hundred billion is no small price tag, and that money has to come from somewhere. 

I doubt that this will have any direct effect on students since it’s unlikely that this money is going to come out of educational funding. Don’t worry, your Pell Grants are just fine. But to avoid a similar situation in the future, it is important to see where this whole mess came from in the first place. 

In the 1970s, President Carter enacted a policy called the Community Readjustment Act, which forced mortgage lenders to give more loans to low income applicants to increase the number of home-owning low income families. During the Clinton Administration, this policy went into full force. President Clinton used the power of governmental regulation to force lenders to give increasingly large numbers of risky loans to people who could not afford to pay them back. 

Fast forward to 2003: President Bush and his administration saw a problem as these housing lenders had an ever increasingly large amount of their outstanding loans in these very risky investments. Congressional democrats, who were still hoping to advance their “progressive” agenda, continually blocked Bush administration attempts at regulation. (Wait a second! I thought all of this was Bush’s fault just like global warming, 9/11, Hurricane Katrina, and Tom Brady’s broken leg!) Think again. 

It seems that two huge issues of the far, left-wing democrats and the progressive movement include lowering the costs of a college education and fighting for affordable housing. These are noble endeavors, but actions to advance these goals are ripe with class warfare rhetoric and usually have strong anti-capitalist under tones. The mortgage crisis that was at the head of the ongoing financial crisis is an example that shows that it is in all of our best interests to just let the market do its job. Social engineering, like the Community Readjustment Act, almost always has disastrous consequences, even if it’s well intentioned. I don’t doubt that there are many students at UCSB who ironically buy into the doctrines of the far left that produced this and other social engineering policies without knowing that they are working against their own interests. 

So to the activists out there fighting for “social justice” and “progressive social change,” do all of us a favor: go save the whales and stay out of economic affairs.