It took me a few days to find it, but I just got done reading the D&C’s latest installment of misinformation on the Subprime/ARM Mortgage crisis brewing throughout our country. Now, it hurts to think. I know it’s easy to criticize the media for incomplete reporting, but in this case, the Pollyanna tone of the piece and the fundamental lack of depth are just positively astounding. Take, for example, the dismissive tone that begins the piece:
A casual observer could be forgiven for thinking the U.S. financial industry is on the brink of collapse.
Indeed. And I’m sure a professional observer could be equally forgiven. But according to the D&C, that’s all just silly pussy talk:
Is it cash-under-the-mattress time for those of us who don’t know a derivative from a debenture?
Take a deep breath, sit back and listen to Dan Burns, president of the Rochester division of M&T Bank, explain that our local banks — the Canandaigua Nationals, the First Niagaras, the M&Ts and others — are run conservatively and are, in fact, quite healthy.
Yes, now that the irresponsible practices of banks and lending institutions have brought our economy to unbelievable pains and left thousands homeless, let’s all sit right back, take a big hit from the hukka and listen to yet another banker tell us why we needn’t worry our pretty little heads about it. Sleep deep. After all, these banks are run conservatively, and conservative equals good.
It is a consistent narrative within the larger D&C world view that Rochester is always exceptional in some way or the other, especially in cases of crisis. There seems to be some “Big Daddy” complex that compels the editorial board to assure us all that, no matter what the situation, Rochester will be OK because we’re just a far away, sleepy conservative town that nobody would ever want to hurt. We don’t need to worry about the wars in Iraq or Afghanistan; we don’t need to worry about terrorism; we don’t need to worry about the mortgage crisis. Sleep deep. These too shall pass.
And I would prefer not to be seen as the reactionary counterpart, but if seventy percent of the mortgages in America are being underwritten by Fannie Mae and Freddie Mac – yes, including some of those issued by Canandaigua National – then whether or not East Bumblefuck National Bank ever had the money to even play the subprime game, much less suffer the consequences directly, matters very little. To the extent that this article is about local banks, it is great to know that they’ve done OK despite the problems so far. But when the article is address to those of us who “don’t know a derivative from a debenture,” and sets a “don’t worry” tone – consistent with a common D&C theme- there is the air of irresponsibility.
Now is definitely the time to worry; now is definitely time to check the fine-print on your mortgage; now is definitely the time when you should be searching Google News for your mortgage lender’s name; now is the time to pay attention to the news about the mortgage problems and educate yourself to the extent you can. Now is not the time to panic. The problems of Fannie Mae and Freddie Mac not only have the potential to directly affect those sleepy burgs that choose not to pay attention, but are in fact indicative of market forces that will directly affect our lives.
Fannie Mae and Freddie Mac certainly have their problems as institutions. Nevertheless, the sudden near-collapse of these two lending agencies is not simply bad timing: in an effort to bail out banks and mortgage holders struggling with the ARM interest rate snap-back that’s caused this whole subprime crisis, the government encouraged people to transfer to Fannie- and Freddie-backed mortgages. Now, those institutions are completely overwhelmed and there’s more to come. Here in Rochester, according to one recent report which I discussed a while back (note: Empire Justice’s website appears to be down at the moment, so you can’t actually see the report, which sux), forty four percent of subprime mortgages in Monroe County are in trouble. Even if those mortgages aren’t through local banks, the problem they present is still quite local.
And oh, by the way? Hiding cash under your mattress doesn’t matter much if the financial institutions that back that currency collapse. No, now may not be the time to hide cash under your bed, but if we’re unlucky, it may be time to start ripping copper wire out of your house and protecting your gold fillings.
So, D&C: quit patronizing us and do your freakin’ job. Tell us what’s happening, ask tough questions of local institutions. Do I have to be all on my own reporting the news around here?