Is The Poor Housing Market A Genetic Disease?

What should people make of the proposal for a nationwide government initiated program where banks take ownership of homes, then rent them to persons in mortgage default? Will it happen on a large scale? Not likely. But central bank monetization of federal fiscal deficits is likely as a means of stabilizing home prices, thus reducing foreclosures and their impacts on communities.

Interestingly, on May 31, 2003, Ben Bernanke explained to Japanese economic leaders in Tokyo that “monetization of government debt simply amounts to replacing other forms of taxes with an inflation tax”. Since no alternatives to monetization of government debt are politically feasible, stealth taxation is our future. By this means responsible Americans will help underwrite much of the financial irresponsibility of the last twenty years.

The result of monetization will be substantial inflation but not runaway inflation. The coming inflation will impact crude oil, natural resources, foodstuffs and mundane necessities. There are too many powerful deflationary elements in the background — both positive and negative — for runaway inflation to emerge. (The Internet, for example, is a beneficial force of deflation.) The Fed’s knowledge of money dynamics liberates it to finance the U.S. deficit awhile longer from its balance sheet. Deflationary pressures will thus mute the effects of inflationary monetary policy.

The U.S. Is A Sub-Prime Borrower

The U.S. housing crisis was caused by mortgage products like Alt-A, sub-prime, negative amortization loans, and teaser-rate adjustable loans that caused millions of people to buy far more home than they could sustainably own, or even afford to rent at substantially discounted rates. Too many people bought homes hoping to flip them after a few years for fat profits that could be used in acquiring lesser, more affordable homes. The whole idea was as unsustainable as the nation’s deficit spending fiscal policies.

By analogy, the U.S. is a huge sub-prime borrower with a mortgage that cannot be paid. We’re hanging on only because the Fed extended teaser rates. The U.S. Congress should understand this. Ironically, while members of Congress castigate Fannie Mae and Freddie Mac, they're voting for fiscal policies that are just as irresponsible and illegitimate.

There is no government solution to what ails us. In a phrase, we’ve exchanged the “the home of the brave” for the 1980s Fleetwood Mac lyric, “Tell me lies, tell me sweet little lies....” Entitlement thinking runs so strong in some parts of the country that people believe it is their “human right” to live in houses they cannot afford. Politicians who cater to these groups used to inflame their covetousness by telling them, ‘After all, America is such a rich nation....’

Responsible people often remain silent about policy madness for fear of being slurred as bigoted, racist or some other thing by those who have made moral egalitarianism and unbridled tolerance the twin pillars of their secular religion. Allegedly, you’re a phobic of one type or another if you stand for a responsible policy that impacts disproportionately the members of some ideologically sacrosanct or ‘victim’ group. But a day of comeuppance usually comes for those who feed upon lies. In fact, that day may be just around the corner.

Choices Passed On Genetically?

In 2008 the National Institutes of Health (NIH) announced a commitment of $190 million to scientists endeavoring to better understand the role of epigenetic processes in raising or lowering the activity of human genes. (See the Jan. 06, 2010 article, “Why Your DNA Isn’t Your Destiny.”) One apparent finding emerging from epigenetic research is that INTENSELY pursued behaviors persisted in can alter gene function in some individuals and in their children for multiple generations. (Epigenes appear to be ‘markers’ or control dials that sit atop genes and alter the expression of the genes.) For example, children who gorge themselves on food for a single season may end up shortening the life expectancies of their eventual offspring.

While the scientific learning is just getting underway, an reasoned extrapolation of preliminary indications seems to suggest, for example, that intense greed, malice or overwhelming anxiety in a body of people can impact their internal wiring for generations. Call this the Wall Street hazard, or the Middle East hazard, but the implications are sobering. Can terrorist propensities become physiologically embedded at the aggregate level, thus increasing the prospect for recruiting candidates to terrorism in the next generation? Is it possible that a community’s financially immoral responses to opportunities may shortcut evolution and generate mental tendencies that run counter to the good of society? Perhaps Hollywood sci-fi movies about indistinguishable ‘aliens’ see something lurking after all.

Epigenetic research may come to rival or surpass the importance of stem-cell research because it offers the prospect of finding choice-based solutions to persistent social problems. Indeed, epigenetic research offers the prospect of helping disadvantaged groups assist their own through intense, protracted efforts to combat choice based, lifestyle deficiencies. In fact, epigenetic learning might stimulate enlightened values while discounting some irresponsible religious ideas that do little to improve mind and soul.

Civics education could be challenged by epigenetic research to the extent that the research shows how overarching cultural choices predispose a nation genetically to success or failure in representative democracy. For example, what if the nation’s television viewing habits are causing epigentic changes that result in a relatively passive electorate? Or what if “teach-to-the-test” style education diminishes people’s entrepreneurial spirit and engenders epigenetic changes that lead to overspending on security and entitlements?

Perhaps one dimmer switch has been gratuitous sex and violence in Hollywood movies. Or repetitive sermons from the pulpit. Or even the nation’s proclivity to gorge itself upon recreation, entertainment, and fantasy. What if abandonment to a “rights” mentality works against the expression of genes that help us act responsibly? We know that environment matters. But what if errant choices we persist in work to shut down the attitudinal traits we need for political survival? What if we push ourselves past the tipping point, turning into a people unable to implement majoritarian choices in our lasting interest? Perhaps the Almighty providentially supplies an evolutionary genetic system which accelerates the self-destruction of human societies when the aggregation of choices becomes counterproductive to the enduring good.

People today pursue various infatuations vigorously, moderation being held in low regard. Some splurge on food. Others become sports addicts. Many make hedonism their god. What if the acceleration of these tendencies reflects epigene consequences that have been building for several generations? What if high quality majoritarian democracy is no longer possible in America until epigene controls get reset in a post-calamity environment?

Founding Era's Positive Choices Passed On For A Time

Contrast the prospective epigenetic consequences of living in 21st century America with the probable epigenetic consequences of living in colonial America during the decades preceding the framing of the U.S. Constitution. Back then, many free men thought intensely about personal and community responsibility; granted, some of the ideas were errant. Nevertheless, within the bounds of their traditions they were not tolerant of irresponsibility in themselves or others. They loved measured freedom, believed emphatically in hard work, treasured whatever learning they could acquire, and took responsibility for their own well-being. In other words, they created personal and social conditions that wired their epigenes and conditioned their progeny’s epigenes for relative success in a difficult world. The epigene benefits of that era may have endured for many decades, only erased recently by modern attachments to entertainment, entitlement thinking and greed. (See the 1998 book, “Colonial Origins of the American Constitution: A Documentary History.”)

The next time you hear someone say that we can fix what ails the nation by creating another government program for some self-interested faction, point them toward emerging biological science. Ironically, genetic discoveries may be in the process of demonstrating that the seven deadly sins — wrath, greed, sloth, pride, lust, envy and gluttony — are not just matters of personal rectitude but sins against democracy, liberty, enduring prosperity and the common good. What one persists in privately may matter because private action when aggregated creates culture. In turn, culture impacts the national good and affects the well-being or suffering of individuals. Culture may even bring nations to their knees.

In sum there is no free ride in representative democracy. There is only the imperative that people who wish to enjoy enduring good must cultivate a national ethos of personal responsibility and self-restraint.