Suffering from a short memory

~It's impossible to miss all the gloomy reports lately about the economy and concerns about energy (even with dropping oil prices) that have filled the news, especially since the election. But as I've listened, I've been dumbfounded a few times by what short memories Americans have, and by how we've failed to learn from our past. Two examples:

~Today on NPR in a report talking about the real estate and mortgage crisis, someone argued that it came about (at least in part) because those making risky loans were convinced that in American real estate prices always go up and real estate is always a good investment, even with high interest loans. But one has only to look over the last 25-30 years to see evidence that that's not always true, nor is this the first time people have ended up holding mortgages greater than the value of their homes. When we bought our first house in 1979 the interest rate was 10%, and our real estate agent told us it would likely never be lower. And indeed, over the next few years it continued to climb--as high as 16-17%. When Ronald Reagan came into office he immediately canceled a number of programs that helped lower income people afford houses with those rates and house prices tanked. We were living in an area with lots of military families who had been encouraged to buy homes as good investments, and who needed to sell those homes when they received orders to a new posting, and suddenly those houses were an albatross rather than a good investment. Sound familiar? (It's not lost on me that just as in today's crisis the first victims were those who could not have afforded to buy without special loan programs.) And when I moved to Vermont in the mid 90s, I could afford my condo only because real estate prices had stagnated for several years and condo owners in the area just wanted to get rid of them. I know that the mortgage crisis this time around cuts deeper and perhaps has more complicated causes, and of course I'm no expert. But I just don't see how people who ARE the experts could believe that real estate is always such a sure thig. Were they naive, greed, stupid--or all three?

~During the energy crisis in the mid 70s, Jimmy Carter had solar panels installed on the White House. I remember that energy crisis well--when there were lines at the gas pumps, speed limits were lowered to 55, and Americans were urged to conserve energy at home--but I don't remember the solar panels. At any rate, again after Reagan was elected, the energy crisis abated and Reagan not only had the solar panels removed, but he also pulled the funding from the agencies that were working on developing solar energy and other sustainable energy sources. This little tidbit was in the context of a report on fears that since oil prices had decreased so dramatically the pressure was off for developing more fuel efficient cars and alternative sources of energy.

~The philosopher George Santayana said, "Those who fail to remember the past are condemned to repeat it." Perhaps we should pay greater heed to that notion.