Suprime: How Small Minded Journalism Yeilds Small Minded Policy

It remains an enduring frustration of mine that journalists seem to feel the need to ask politicians questions which are “on the minds of voters,” without respect to whether or not those questions are at all reasonable to the situation. Typically, I find such excuses as “what’s on the minds of voters,” to be small minded ways of injecting the journalist’s own viewpoint into the discussion. Surely, if the journalist thought it, someone else must have thought it as well, therefore it is “on the minds of voters.”

The best current example of this is the discussion of the ARM mortgage crisis which has been the underpinning of so much of our current economic crisis. When ever someone wants to discuss ways to help home owners struggling with either Subprime or other ARM mortgages which are sapping their personal economics, the first question someone asks is one of the two as follows:

  1. “But what about Joe the Irresponsible Person, who is living in a $500,000 home, but is only making $50,000? Why should the American taxpayers pay for his irresponsibility?”
  2. “Well, what happens when one house on the block gets financial assistance from the government? What stops everybody else on the street from taking a vacation from paying for their mortgages? What stops them from just becoming another welfare mortgage home?”

My answer to both of these question is: show me a concrete example of either of these two things happening anywhere, and then show me what percentage of the problem these examples represent. Then, we’ll talk.

The truth is that in terms of price to income ratio – the relationship between the average home price and the income of the owner – is overvalued by an average of 10%. 10% of your income is quite a bit of money, but it’s not ten times your income, which is the example cited in #1 above. That would be 1000%. Certainly, an average can include a huge range of values and we do know that such excesses as our example do exist. But just as certainly, they must necessarily be a slim minority to fit into the relatively narrow average.

Meanwhile, the second question is basically a way to say, “I’d never do anything like that, but my neighbors are total dicks.” It’s an abstraction for which there is – to my knowledge – no concrete example.

But journalists seem compelled to ask those questions anyway. This lends some credibility to what is clearly an otherwise silly concept and forces our policy to reflect concerns over phantom problems. It is not a sound basis for policy making. It is not the seed of an intelligent, effective discussion of substantive issues.

But it sure seems that way, doesn’t it?

By Tommy Belknap

Owner, developer, editor of DragonFlyEye.Net, Tom Belknap is also a freelance journalist for The 585 lifestyle magazine. He lives in the Rochester area with his wife and son.