1984 and 2013: the more things change...

Author:Lebowitz, Jeff
Position:MORTECH MUSINGS
 
FREE EXCERPT

The other day, as I was filing through old papers, I ran across the first research paper that I had published as Fannie Mae's vice president of strategic planning.

The document had the inelegant title of "A Description of the Characteristics, Attitudes and Practices of Residential Mortgage Lenders." The purpose of this study was to benchmark lender responses in a year replete with singular regulatory and business events. The year was 1984.

I then spent some time searching through other old documents and poking around public sources to find out more about what kind of year 1984 was.

I was surprised and somewhat amused by the similarities I found in the issues and concerns about the secondary mortgage market, the government-sponsored enterprises (GSEs) and federal budgets in 1984 and 2013.

1984

As it turned out, 1984 was not the realization of an Orwellian dystopia. The United States was not yet in perpetual war and the country had not adopted a totalitarian ideology.

"Big Brother" was not the divine leader; Ronald Reagan was the (40th) president. The Republicans controlled the Senate while the Democrats controlled the House of Representatives. "English socialism" never played a role in politics and was merely an Orwellian metaphor and fictional political party.

The Reagan revolution to reduce the country's reliance upon government had been partly adopted. An incomplete revolution produced an uneven implementation of Reagan's vision of how the government and the governed interacted.

Yet it was revealing to me how the issues occupying Washington in 2013 are so similar to the critical issues of 1984.

And 1984 was a presidential election year as well. In an October 1984 debate with presidential candidate Walter Mondale, President Reagan asserted that his economic policies were effective. His claim was that the national budget would be balanced by 1989.

As for housing policy--and there was housing policy--Reagan said that the administration was subsidizing housing for more than 10 million people and would continue to do so. As things turned out, the budget deficit and housing policy would command far more attention in Reagan's second term than ever was contemplated by the president.

Federal budget deficits

As is the case in 2013, the federal government was faced with serious and expanding budget deficits in 1984. The federal deficit was reported to be $185.4 billion in 1984.

The deficit had grown 150 percent in President Reagan's first term in...

To continue reading

FREE SIGN UP