In the News Again: Redfin's Old Friends in Congress

Now that the splurge passed, everyone is arguing about whether Republicans or Democrats are to blame. I had naturally assumed it was the party that favors deregulation, the Republicans.

But then Redfin’s Rob McGarty sent me a video of all our old friends, the congressmen from the Housing and Finance Subcommittee. These are the people who lined up to challenge Redfin’s testimony that self-regulation mostly fails to prevent blackballing, and that old MLS rules limit  access to the information consumers need to negotiate a better home price.

The new video shows that there were Democrats too who insisted that nothing was wrong with Fannie Mae or Freddie Mac, using the exact same rhetoric they used to insist that nothing was wrong with the real estate industry.

As before, Artur Davis and Maxine Waters led the charge, with Davis notable for an intelligence bordering on cruelty, and Waters for incandescent outrage and an occasional twinkle of self-mocking hooded behind her tinted glasses. Both are Democrats, heavily funded by real estate interests.

The video is the worst kind of partisan hack job, but what it reminded me of was a non-partisan truth: that both Democrats and Republicans are equal parts corruption and genuine conviction. When I came back from Congress, all the people who saw Democrats as good and Republicans as bad, or vice-versa, just seemed to be living in their own ideological world.

It’s impossible for a congressman to live in that world. A few months after our testimony, when the committee chairman was headed to prison on fraud charges, he left a late-night voice-mail thanking us for our testimony. By November, the whole committee staff was unemployed, their phones answered by strangers, because the Democrats had taken over Congress. It was hard at that moment to blame Davis and Waters for putting self-preservation first (though I do).

I thought about the two of them when reading Sunday about the retirement of Republican Congressman Tom Davis, a centrist who became convinced that both parties would rather embarrass one another than get anything done; judging by the number of party-line votes, Congress is more partisan now than it has been in a century.

And so are we. Any newspaper’s most e-mailed articles aren’t, like the Tom Davis swan song, about partisanship, they are partisanship, arguing that John McCain is half-senile or Barack Obama is un-American. Ellie Fields noted yesterday that opinion-and-rumor blogs have sprouted up just like the scandal-sheets popular 100 years ago, and Facebook makes matters worse by ensuring we never read anything that hasn’t been recommended by people like us.

But do we really believe that 49% or 51% of Americans have got it completely wrong? What has been best about America is that we aren’t subject to age-old grudges based on differences in religion, class or politics, or mythologized histories of victimization. We are still a new, open place. After years of partisan rancor, the two candidates for president are both promising to work with the other side. It is why Obama beat Clinton, and McCain beat Romney. And it’s why I’m hopeful about this election — even if my guy doesn’t win.


  • raphael Rosa

    We blame “government” as if the government were some sort of living entity, like you, like me. It isn’t. Neither is “big business,” “big labor” or any of the other segments of our socio-economic polity. Truth is they’re all made up of individuals; individuals who act out of either altruism (not many), enlightened self interest (more but still too few), or simple greed (most). Unfortunately our system appears to organize around the greed principle and reward those who are willing to be the most ruthless and Darwinist in their ambitions. The result is that corporate executives become willing to exagerate or lie about financial positions. They bribe (with campaign donations) politicians to end regulations, tax others, etc. We end up with a government we can’t trust, corporations that go bust, and a fabulously rich 1% who despite losses, are still so wealthy that they don’t care. The answer? Remove the incentive. Place a cap on total executive compensation. Tie exec pay to some multiple of employee total compensation. Pay people to manage, not incent them to cook the books or corrupt government, or ship jobs overseas, or devise arcane debt swaps, derivatives, or other ways of creating fake wealth that must, sooner or later, evaporate when it’s realized that there is nothing “real” underpinning the bubble.