May 18, 2009

Column of the Day: Thomas Sowell (‘Don’t Blame Deregulation For Housing Mess’)

America’s leading and most prolific intellectual necessarily and succinctly debunks the convenient Beltway mythology:

…. The idea is that it was a lack of government supervision which allowed “greed” in the private sector to lead the nation into crises that only our Beltway saviors can solve.

What utter rubbish this all is can be found by checking the record of how government regulators were precisely the ones who imposed lower mortgage lending standards.

It was members of Congress (of both parties) who pushed the regulators, the banks and the mortgage-buying giants Fannie Mae and Freddie Mac into accepting risky mortgages, in the name of “affordable housing” and more homeownership. Presidents of both parties also jumped on the bandwagon.

Most people don’t have time to spend digging into the Congressional Record and other sources to find out the ugly truth being covered up by the blizzard of lies coming out of Washington and echoed in much of the media. But my research assistants do that for a living, and it is all presented in a book of mine titled “The Housing Boom and Bust” that has just been published.

When the housing boom was going along merrily, Rep. Barney Frank was proud to be one of those who were pushing Fannie Mae and Freddie Mac into more adventurous financial practices, in the name of “affordable housing.”

In 2003 he said:

“I believe that we, as the federal government, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals.”

He added:

“I want to roll the dice a little bit more in this situation towards subsidized housing.”

In other words, when things were looking good, he was happy to acknowledge the role of the federal government in pushing the housing market in a direction it would not have taken on its own.

But, after the risky mortgage-lending practices fostered by government intervention led to massive defaults and foreclosures that caused financial institutions to collapse or be bailed out, Frank changed his tune completely.

….. Although this is the biggest housing disaster the government has ever produced, it is by no means the first. Republicans intervened in the housing markets to promote more homeownership in the 1920s, Democrats in the 1930s, and both parties after World War II. All of these interventions led to massive foreclosures.

Don’t politicians ever learn? Why should they? What they have learned all too well is how easy it is to get credit for promoting homeownership and how easy it is to escape blame for the later foreclosures and other economic disasters that follow.

Sowell is right that too many Republicans went along for the Fan and Fred ride. But that correct assertion doesn’t change the fact that the Community Reinvestment Act was an “inspiration” of Jimmy Carter and a post-Watergate Democrat-controlled Congress, or that Fan and Fred’s loosening of credit standards occurred during the Clinton Era while those two entities were run by Democratic cronies who were as corrupt as they come.

Quote of the Day: George Will

Filed under: Economy,Quotes, Etc. of the Day,Taxes & Government — Tom @ 8:34 am

This is the last paragraph from Will’s “Tincture of Lawlessness” column on May 14 at Townhall.

Substitute “government’s” for “administration’s” in the last sentence, which I have bolded, and you have as concise a statement as you’ll ever see explaining why the market’s allocation of resources, while of course imperfect, is superior to that of a government’s.

As is, the bolded statement also would work pretty well in the short-term as a campaign slogan:

The Obama administration’s agenda of maximizing dependency involves political favoritism cloaked in the raiment of “economic planning” and “social justice” that somehow produce results superior to what markets produce when freedom allows merit to manifest itself, and incompetence to fail. The administration’s central activity — the political allocation of wealth and opportunity — is not merely susceptible to corruption, it is corruption.

It is indeed.

Lucid Links (051809, Morning)

Filed under: Lucid Links — Tom @ 7:56 am

Noteworthy Net-Worthies:

Add the Economist to the list of theShockedthat Barack Obama is a far-left, class-warfare, redistributionist demagogue — On October 30, 2008, it endorsed Obama over John McCain, saying in what has in retrospect turned out to be a long list of howlers that “His advisers insist that Mr Obama is too clever to usher in a new age of over-regulation.” But on May 7, in “Barack Obama and the Carmarkers,” the magazine decried the fact that “America’s government, keen to protect workers …. has vilified creditors and ridden roughshod over their legitimate claims over the carmakers’ assets.” Imagine that. Even if they ignored his associations with Jeremiah Wright and Bill Ayers, the ACORN lawlessness carried out in Obama’s name should have clued them in that this guy would ignore the law if he thought he had the ability to impose his will instead. More to the economic point, the coercive nature of cap and trade, captured in this November 2 BizzyBlog post (“January 2008 Audio: Obama Promises Cap-And-Trade Will Bankrupt New Coal Plants”) and his take on the 1960s civil right movement’s supposed failure to achieve “economic justice” (as defined by Obama, noted in this October 29 BizzyBlog post) should have had them running away from Obama months earlier.

Kyle-Ann Shiver’s May 15 item at American Thinker is a must-read — “Defeating Political Ridicule.”

Why the New York Times can’t die soon enough“NYT Finally Admits It Spiked Obama/ACORN Corruption Story.” The more quickly it shrinks, the less interested Google, which has been in relationship discussions with the Old Gray Lady, will be in anything the Times has beyond its archives.

From the Detroit suburb of Troy, a supposed model “green” home has turned into a monument to environuttiness — “It was supposed to be a shining example of the green movement — a completely independent solar-powered house with no gas or electrical hookups. Seven months ago, officials gathered for a ribbon-cutting ceremony to celebrate the $900,000 house owned by the city of Troy that was to be used as an educational tool and meeting spot. But it never opened to the public. And it remains closed.” But it remains a very useful educational tool about the unhinged nature of so much of the green movement. Read and shake your head at the whole thing.

Finally, I would suggest that Washington’s elites, especially those whose status depends on being reelected, not ignore this:

Positivity: Bishop D’Arcy speaks at Notre Dame

Filed under: Life-Based News,Positivity — Tom @ 6:10 am

From South Bend, Indiana:

May 17, 2009 / 04:18 pm

Although he had initially planned to stay away from campus today as President Barack Obama was honored at Notre Dame, Bishop John D’Arcy of Fort Wayne-South Bend, Indiana changed his mind and spoke at a campus pro-life rally.

According to the Fort Wayne News Sentinel, the bishop spoke in front of 2,500 people protesting the university’s award to pro-abortion President Barack Obama.

Initially Bishop D’Arcy had planned to boycott the graduation festivities, however he decided to appear on campus due to the school’s pro-life undergraduates.

“It is certainly the place for the bishop to be here,” D’Arcy said. “John D’Arcy’s not important, but the office of bishop if very important and it must always be like Pope John Paul II to stand up for life all the time, everywhere without exception.”

Go here for the rest of the story.