The tide is turning

Posted

Friday, November 9
If the old joke is that a conservative is a liberal who's been mugged, perhaps the new joke is that a liberal is a conservative who's had his house foreclosed on.

A story in Tuesday's Los Angeles Times reported on the shifting politics of Loudoun County, Virginia. Once a mostly rural area on the western fringe of Washington, D.C., it's now one of the fastest growing regions in the country. It is also near the top in household median income.

Or, at least it was. This number says it all. In 2005, there were 12 housing foreclosures in Loudoun County. For the first nine months of 2007, there have been 643.

Places such as Loudoun County, fast growing and affluent "exurban" areas outside the cities, have been strongholds for the Republican Party in recent years. But now the economy is slowing and more houses are in foreclosure than are being built. Suddenly, the people who supported Republicans in the good times are starting to switch back to the Democratic Party now that the bad times are upon us.

It may seem a bit ironic that the people who supported a political movement built upon personal responsibility and tough love are now looking at the so-called "mommy party" to kiss their scraped knees and make it all better.

That things are not going well for the Republican Party is evident. The latest Wall Street Journal/NBC News poll found that 50 percent of respondents favored having a Democrat -- any Democrat -- in the White House. By a margin of 46-37, they also support Democrats to retain control of Congress. Only 20 percent of those surveyed say they want the next president to take an approach similar to that of Bush.

Leaving aside the war in Iraq, which a majority of Americans want to see end as soon as possible, the continuing turmoil in the housing markets and the shaky economy it has left in its wake have become major political issues.

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Major financial institutions such as Citigroup, Merrill Lynch, Goldman Sachs, Morgan Stanley, Bear Stearns and Lehman Brothers have written off more than $40 billion of losses from securities backed by mortgages that are now worthless.

Here's where the story gets particularly ironic. According to Bloomberg News, many of these, plus other financial companies, spent millions lobbying Congress to tighten the bankruptcy laws so people cannot walk away from their credit card debt. The move has backfired. To ensure that people keep paying off their credit cards, those companies now are seeing a record level of mortgage defaults and the collapse of the housing market.

While the Republican majority who controlled Congress were the ones who rewrote the bankruptcy laws, the Democrats did little to stop them -- mainly because Democrats have gotten millions in campaign donations from the financial companies.

Things are changing, though. There is growing pressure on Congress to once again modify bankruptcy laws. The House Judiciary Committee is working on a bill that would allow bankruptcy judges to restructure mortgages and reduce interest rates and mortgage balances to reflect current market values. Whether it will happen remains to be seen.

The conservatives who backed tougher bankruptcy laws now are finding that those laws are coming back to bite them. The conservatives who believe that government has no role in making people's lives better are now seeing the virtue of government intervention when times get tough.

That's why the Republican Party is in trouble across the country.

That's why the political tide appears to be turning toward the Democrats.


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