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#1
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False Solutions and Real Problems
Someone once said that Senator Hubert Humphrey, liberal icon of an
earlier generation, had more solutions than there were problems. Senator Humphrey was not unique in that respect. In fact, our present economic crisis has developed out of politicians providing solutions to problems that did not exist-- and, as a result, producing a problem whose existence is all too real and all too painful. What was the problem that didn't exist? It was a national problem of unaffordable housing. The political crusade for affordable housing got into high gear in the 1990s and led to all kinds of changes in mortgage lending practices, which in turn led to a housing boom and bust that has left us in the mess we are now trying to dig out of. Usually housing affordability is measured in terms of how much of the average person's income it takes to cover either apartment rent or a monthly mortgage payment. There were certainly places here and there where it took half a family's income just to put a roof over their heads. Many such places were in coastal California but there were a few others, here and there, on the east coast and elsewhere. But, vast areas of the country in between-- "flyover country" to the east coast and west coast elites-- had housing prices that took no larger share of the average American's income than in the decade before the affordable housing crusade got under way. Why then a national crusade by Washington politicians over local problems? Probably as good an answer as any is that "It seemed like a good idea at the time." How are we to be kept aware of how compassionate and how important our elected officials are unless they are busy solving some problem for us? The problem of skyrocketing housing prices was all too real in those places where this problem existed. When you have to live on half your income because the other half goes for housing, that's a real downer. Almost invariably, these severe local problems had local causes-- usually severe local restrictions on building homes. These restrictions had a variety of politically attractive names, ranging from "open space" laws and "smart growth" policies to "environmental protection" and "farmland preservation." Like most wonderful-sounding political slogans, none of these lofty goals was discussed in terms of that one four-letter word that people do not use in polite political society-- "cost." No one asked how many hundreds of thousands of dollars would be added to the cost of an average home by "open space" laws, for example. Yet empirical studies have shown that land-use restrictions added at least a hundred thousand dollars to the average home price in dozens of places around the country. In some places, such as coastal California, these restrictions added several hundred thousand dollars to the price of the average home. In other words, where the problem was real, local politicians were the cause. National politicians then tried to depict this as a national problem that they would solve. How would they solve it? By pressuring banks and other lenders to lower their requirements for making mortgage loans, so that more people could buy houses. The Department of Housing and Urban Development gave the government-sponsored enterprise Fannie Mae quotas for how many mortgages it should buy that were made out for people for low to moderate incomes. Like most political "solutions," the solution to the affordable housing "problem" took little or no account of the wider repercussions this would entail. Various economists and others warned repeatedly that lowered lending standards meant more risky mortgages. Given the complex relationships among banks and other financial institutions, including many big Wall Street firms, if mortgages started defaulting, all the financial dominoes could start falling. These warnings were brushed aside. Politicians were too busy solving a national problem that didn't exist. In the process, they created very real problems. Now they are now offering even more solutions that will undoubtedly lead to even bigger problems. http://townhall.com/Columnists/ThomasSowell/ Fannie Mae plans bonuses of $1M for top executives; Freddie Mac has similar plans http://finance.yahoo.com/news/Fannie...-14679491.html Impeach Barney Frank! |
#3
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False Solutions and Real Problems
On Wed, 18 Mar 2009 18:30:39 -0700 (PDT), wrote:
There follows that tiresome canard about generous mortgages in the U.S. causing the world collapse of the financial system. The system collapses because it was a house of cards -- the cards were phoney money derivatives of various sorts being used as speculation tools. They and their market (if it can be said to be a "market") were of unknown real value. When crunch came to crunch, the bankers had assets of unknown (but inflated) value on their balance sheets. A genuine audit (impossible) would show many of them to be far more "under water" than any billion home owners. They had blown up a vast bubble ($60 trillion maybe, who knows?). Their bubble was pricked by the mortgage devaluations. Mason Clark *Greater America in the Age of Rebellion* http://frontal-lobe.info/greateramerica.html -- many excerpts you can see -- |
#4
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False Solutions and Real Problems
On Mar 18, 9:06*pm, Mason C wrote:
On Wed, 18 Mar 2009 18:30:39 -0700 (PDT), wrote: There follows that tiresome canard about generous mortgages in the U.S. causing the world collapse of the financial system. The system collapses because it was a house of cards -- the cards were phoney money derivatives of various sorts being used as speculation tools. *They and their market (if it can be said to be a "market") were of unknown real value. *When crunch came to crunch, the bankers had assets of unknown (but inflated) value on their balance sheets. A genuine audit (impossible) would show many of them to be far more "under water" than any billion home owners. *They had blown up a vast bubble ($60 trillion maybe, who knows?). Their bubble was pricked by the mortgage devaluations. correct, and every time i hear some yahoo call them a asset, i stick my finger down my throat. assets are something tangible, not a bet. i have read that there maybe over a quadrillion dollars of these bets. so if these paper bets are really a asset, then they should be able to sell them, or borrow against them. but they cannot, in most cases they are probably worthless, and are backed by nothing. which means the companies that own them are insolvent, and perhaps no amount of outside money can save them. really, its about time to force them into chapter 7, i think its 7, where they can come out reorganized, without the baggage of these derivative bets, and the lousy management who allowed this. Mason Clark *Greater America in the Age of Rebellion*http://frontal-lobe.info/greateramerica.html *-- many excerpts you can see -- |
#5
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False Solutions and Real Problems
On Wed, 18 Mar 2009 21:12:19 -0700 (PDT), wrote:
On Mar 18, 9:06*pm, Mason C wrote: On Wed, 18 Mar 2009 18:30:39 -0700 (PDT), wrote: There follows that tiresome canard about generous mortgages in the U.S. causing the world collapse of the financial system. The system collapses because it was a house of cards -- the cards were phoney money derivatives of various sorts being used as speculation tools. *They and their market (if it can be said to be a "market") were of unknown real value. *When crunch came to crunch, the bankers had assets of unknown (but inflated) value on their balance sheets. A genuine audit (impossible) would show many of them to be far more "under water" than any billion home owners. *They had blown up a vast bubble ($60 trillion maybe, who knows?). Their bubble was pricked by the mortgage devaluations. correct, and every time i hear some yahoo call them a asset, i stick my finger down my throat. assets are something tangible, not a bet. i have read that there maybe over a quadrillion dollars of these bets. so if these paper bets are really a asset, then they should be able to sell them, or borrow against them. but they cannot, in most cases they are probably worthless, and are backed by nothing. which means the companies that own them are insolvent, and perhaps no amount of outside money can save them. really, its about time to force them into chapter 7, i think its 7, where they can come out reorganized, without the baggage of these derivative bets, and the lousy management who allowed this. It's 11. 7 means caput, dead. Mason Clark *Greater America in the Age of Rebellion* http://frontal-lobe.info/greateramerica.html -- many excerpts you can see -- |
#6
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False Solutions and Real Problems
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#7
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False Solutions and Real Problems
On Mar 19, 6:30*am, dave wrote:
wrote: - - Impeach Barney Frank! - I don't think Representatives can be impeached. OK Dave then "Pickle" Barney Frank ! ;;-) ~ RHF |
#8
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False Solutions and Real Problems
On Thu, 19 Mar 2009 06:30:54 -0700, dave wrote:
wrote: Impeach Barney Frank! I don't think Representatives can be impeached. Article 2, Section 4: The President, Vice President, and all civil officers of the United States, shall be removed from ofice on impeachment for and conviction of, treason, bribery or other high crimes and misdemeanors. But the Congress has other, constitutional, methods of removing a member: "Each House shall be the judge of the... qualifications of its own members...." "with the concurrence of two thirds, expel a member." In short, they can be kicked out soccer style or old-fashioned toe style. But not Barney Frank. He's one of the best. Mason Clark *Greater America in the Age of Rebellion* http://frontal-lobe.info/greateramerica.html -- many excerpts you can see -- |
#9
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False Solutions and Real Problems
On Mar 18, 9:06*pm, Mason C wrote:
On Wed, 18 Mar 2009 18:30:39 -0700 (PDT), wrote: There follows that tiresome canard about generous mortgages in the U.S. causing the world collapse of the financial system. The system collapses because it was a house of cards -- the cards were phoney money derivatives of various sorts being used as speculation tools. *They and their market (if it can be said to be a "market") were of unknown real value. *When crunch came to crunch, the bankers had assets of unknown (but inflated) value on their balance sheets. A genuine audit (impossible) would show many of them to be far more "under water" than any billion home owners. *They had blown up a vast bubble ($60 trillion maybe, who knows?). Their bubble was pricked by the mortgage devaluations. Mason Clark *Greater America in the Age of Rebellion*http://frontal-lobe.info/greateramerica.html *-- many excerpts you can see -- There you go again - Spreading Liberal Fascist Propaganda Lies. Everyone knows that if it wasn't for Barney Frank and his honey pot Fannie and his gigilo Freddy, none of this ObaMa0ist Democrat DISASTER would have occured. Go back under your rock and sleep it off your 1960's Marxist hangover. |
#10
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False Solutions and Real Problems
Telamon wrote:
In article , wrote: Someone once said that Senator Hubert Humphrey, liberal icon of an earlier generation, had more solutions than there were problems. Senator Humphrey was not unique in that respect. In fact, our present economic crisis has developed out of politicians providing solutions to problems that did not exist-- and, as a result, producing a problem whose existence is all too real and all too painful. What was the problem that didn't exist? It was a national problem of unaffordable housing. The political crusade for affordable housing got into high gear in the 1990s and led to all kinds of changes in mortgage lending practices, which in turn led to a housing boom and bust that has left us in the mess we are now trying to dig out of. Usually housing affordability is measured in terms of how much of the average person's income it takes to cover either apartment rent or a monthly mortgage payment. There were certainly places here and there where it took half a family's income just to put a roof over their heads. Many such places were in coastal California but there were a few others, here and there, on the east coast and elsewhere. But, vast areas of the country in between-- "flyover country" to the east coast and west coast elites-- had housing prices that took no larger share of the average American's income than in the decade before the affordable housing crusade got under way. Why then a national crusade by Washington politicians over local problems? Probably as good an answer as any is that "It seemed like a good idea at the time." How are we to be kept aware of how compassionate and how important our elected officials are unless they are busy solving some problem for us? The problem of skyrocketing housing prices was all too real in those places where this problem existed. When you have to live on half your income because the other half goes for housing, that's a real downer. Almost invariably, these severe local problems had local causes-- usually severe local restrictions on building homes. These restrictions had a variety of politically attractive names, ranging from "open space" laws and "smart growth" policies to "environmental protection" and "farmland preservation." Like most wonderful-sounding political slogans, none of these lofty goals was discussed in terms of that one four-letter word that people do not use in polite political society-- "cost." No one asked how many hundreds of thousands of dollars would be added to the cost of an average home by "open space" laws, for example. Yet empirical studies have shown that land-use restrictions added at least a hundred thousand dollars to the average home price in dozens of places around the country. In some places, such as coastal California, these restrictions added several hundred thousand dollars to the price of the average home. In other words, where the problem was real, local politicians were the cause. National politicians then tried to depict this as a national problem that they would solve. How would they solve it? By pressuring banks and other lenders to lower their requirements for making mortgage loans, so that more people could buy houses. The Department of Housing and Urban Development gave the government-sponsored enterprise Fannie Mae quotas for how many mortgages it should buy that were made out for people for low to moderate incomes. Like most political "solutions," the solution to the affordable housing "problem" took little or no account of the wider repercussions this would entail. Various economists and others warned repeatedly that lowered lending standards meant more risky mortgages. Given the complex relationships among banks and other financial institutions, including many big Wall Street firms, if mortgages started defaulting, all the financial dominoes could start falling. These warnings were brushed aside. Politicians were too busy solving a national problem that didn't exist. In the process, they created very real problems. Now they are now offering even more solutions that will undoubtedly lead to even bigger problems. http://townhall.com/Columnists/ThomasSowell/ Fannie Mae plans bonuses of $1M for top executives; Freddie Mac has similar plans http://finance.yahoo.com/news/Fannie...-14679491.html Impeach Barney Frank! Tar and feather him and run him out of town. Your guys get to be tarred and feathered first. http://www.huffingtonpost.com/rep-ba..._b_176538.html JB |
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