Policy causes more problems than it solves
Inman Community brief
By Inman News, Thursday, September 18, 2008.Editor's note: The following is a member comment posted on the Sept. 10 Inman News story, "Housing policy at a crossroads":
"Government hurts affordability when it intervenes to make something 'easier' -- just look at university education. The extension of grants and loan programs drove up the cost of education much faster than official inflation. The same can be said of medical care, another industry where the federal government is extremely involved.
"I've read the U.S. Constitution over and over and I am quite sure it doesn't say anything about providing housing. The federal government has ZERO responsibility for 'providing housing.'
"States have a great deal more flexibility. Some will do the wrong thing but others will likely find a winning formula. Local communities create problems for themselves when they take away the rights of property owners and fail to compensate them.
"We are suffering not from too much freedom but rather too little and a lack of respect for property rights. Socialism won; they just forgot to tell you.
"The giant socialist programs created by the federal government to facilitate home ownership over the recent decades provided enormous political payoffs and opportunities for corruption and fraud. The plan was always to cash out by leaning on and abusing the public credit. It is a Ponzi scheme on a scale too big to imagine. I can only wait for the next phase to see how they will keep it up.
"The most amazing part is that we have very cleverly figured out how to use fraudulent MBS and government debt to essentially tax the central banks and savings of other countries. Ever wonder why 'deficits don't matter?' or how we can afford a worldwide empire? Deficits are essential. A deep and highly liquid government-sponsored mortgage finance market, in addition to one for government debt, is necessary for recycling the dollars sent abroad and levying our global tax.
"I do not sympathize with the policymakers. They are at best well-meaning fools." --Steven Smith
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Submitted by Steve Simon on September 18, 2008 - 12:41pm.
Having sat in one of the "High Backed Leather Chairs" for eight years (as a County Commissioner in one the largest Counties ion Florida) and having stood at the front of the class for over twenty year in the real estate and mortgage education fields; I can tell you this with some strong certainty:
Every time that Government puts its heavy hand on the delicate scales of any aspect of the free enterprise system the result will be that the sector is now further out of balance than it was here-to-for...
The attempt to control a market where supply and demand reside on either sides of a see-saw rarely even have the desired direction of effect (let alone resulting in a fair and equitable balance).
You can see evidence of this with the Fed's three main tools for controling inflation and the "Amplitude" of the economy:
Discount Rate Adjustments
Open market Sale and Aquisition
Adjustment of Reserve requirement
Their favorite tool the Discount Rate Adjustment
may have a predictable effect on Wall St. for a very short time, but it usually goes counter to the desired result. When Volker was raising the Discount Rate over and over (to stop inflation) everyone said "borrow and buy now" why?, "Its going to get worse!"
When Bush's guy, Greenspan was lowering the Discount Rate (to jump start the economy) "Everyone said, wait", why, "It's going lower!".
Steven Smith was cold in his statement. I believe (no offense to anyone intended) it was Jesus that was to have uttered the following, "Father, forgive them for they know not what they do..."
The Government at the Federal level needs to repel attacks on our shores; not bailout multi-national insurance concerns.
Just my thoughts:)
If the answer to a complex problem is very simple, it is usually incomplete...
Steve Simon is the lead instructor at the Steve Simon School of Real Estate www.stevesimon.us
Submitted by Jeff Manson on September 18, 2008 - 2:12pm.
You are right on!!!! They keep digging the whole deeper and deeper. When are they going to finally figure that out??
Jeff Manson
American Dream Realty
Big Island real estate
Oahu homes for sale
Submitted by Sean OToole on September 18, 2008 - 4:53pm.
The one thing the government should do is insure visibility. The current crisis likely could have been avoided if derivatives weren't hidden from view. That does not require regulating how or what can be done with a derivative, only bringing them to the light of day so people can see exactly the levels of risk these institutions are taking on.
Sean O'Toole
Founder / CEO
ForeclosureRadar.com
ForeclosureTruth.com
Submitted by Walter Boomsma on September 19, 2008 - 1:01pm.
Here, here!
I couldn't agree more... one reason I tend ignore 98% of the calls to action issued by certain professional associations.
I didn't verify this, but it just came via email on a totally unrelated matter:
The Women's Christian Temperance movement lowered the per capita consumption of alcohol from 7 to 3 gallons per annum - BEFORE prohibition. After the government was enlisted to police the morals of the populace, consumption actually increased.
I personally like Pogo's observation: "We have met the enemy and he is us."
When we give the government authority we subtract personal responsibility. Most of what passes for (and as) legislation is basically "feel good" legislation that serves only to fuel campaign ads ("Look what I did for you!") while giving us some false sense of security that somebody is solving the problem.