They don't want to talk about the fact that liberals pushed the mortgage crisis by trying to make housing more egalitarian. Social engineering helped this along.
Posted on 02/19/2009 12:47:35 PM PST by SeekAndFind
It is now clear that this is the worst financial crisis since the Great Depression and the worst economic crisis in the last 60 years. While we are already in a severe and protracted U-shaped recession (the deluded hope of a short and shallow V-shaped contraction has evaporated), there is now a rising risk that this crisis will turn into an uglier, multiyear, L-shaped, Japanese-style stag-deflation (a deadly combination of stagnation, recession and deflation).
The latest data on third-quarter 2008 gross domestic product growth (at an annual rate) around the world are even worse than the first estimate for the U.S. (-3.8%). The figures were -6.0% for the euro zone, -8% for Germany, -12% for Japan, -16% for Singapore and -20% for Korea. The global economy is now literally in free fall as the contraction of consumption, capital spending, residential investment, production, employment, exports and imports is accelerating rather than decelerating.
To avoid this L-shaped near-depression, a strong, aggressive, coherent and credible combination of monetary easing (traditional and unorthodox), fiscal stimulus, proper cleanup of the financial system and reduction of the debt burden of insolvent private agents (households and nonfinancial companies) is necessary in the U.S. and other economies.
Unfortunately, the euro zone is well behind the U.S. in its policy efforts for several reasons. The first is that the European Central Bank is behind the curve in cutting policy rates and creating nontraditional facilities to deal with the liquidity and credit crunch. The second is that the fiscal stimulus is too modest, because those who can afford it (Germany) are lukewarm about it, and those who need it the most (Spain, Portugal, Greece, Italy) can least afford it, as they already have large budget deficits.
(Excerpt) Read more at forbes.com ...
I just want to scream, “Laissez faire capitalism is NOT THE SYSTEM EMPLOYED IN THE US, YOU IDIOT!” Try to build a power plant, lay a transition line, build a hosipital, or add an employee to your payroll, then tell me if we’re under “hands off” capitalism. What a jagoff.
B/S. Get the socialist governments out of the way and let freedom ring!
Down with tyranny!!
That’s “L-shaped” as in L________________________ shaped.
And the fact that we had a good shot at coming out of this if the gubment had done nothing about six months ago, but instead turned a cyclical recession into a greater depression, is another argument against this guy.
“I just want to scream, “Laissez faire capitalism is NOT THE SYSTEM EMPLOYED IN THE US, YOU IDIOT!” “
I thought this Noriel Roubini was suppose to be “smart”.
He can’t get a basic definition right.
Just askin.
He’s promoting end-of-capitalism \ world socialism.
I.E. The non “Anglo-Saxon” model
when you have a fiat money system you cannot have a “no rules” apply situation. There simply has to be rules on securitization, risk and disclosure. Beyond that though......
Nonsense Noriel. We are witnessing a mixed economy trending heavily toward fascism/socialism.
Legal Plunder Has Many Names
Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole — with their common aim of legal plunder — constitute socialism. - Frédéric Bastiat
They don't want to talk about the fact that liberals pushed the mortgage crisis by trying to make housing more egalitarian. Social engineering helped this along.
Failure to adhere to Laissez Faire Capitalism got us into this mess, and and only a return to economic freedom will end it.
Unfree causes of the meltdown include the following bad government interventions in free markets:
Excessive money supply
Fannie Mae
Freddie Mac
ACORN “Redlining” Lawsuits
Politicians of all stripes encouraging home ownership among people who couldn’t afford a home
Community Reinvestment Act
Tax deductibility of mortgage interest
Etc.
Frédéric Bastiat “Economic Harmonies” - Wants, Efforts, Satisfactions 2.3 - 2.9
And now the theorists who seek to build a system out of all this division and conflict step forward. “It is the inevitable result,” they say, “of the nature of things, that is, of freedom. Man is possessed of self-love, and this is the cause of all the evil; for, since he is possessed of self-love, he strives for his own well-being and can find it only at the expense of his brothers’ misfortune. Let us, then, prevent him from following his impulses; let us stifle liberty; let us change the human heart; let us find another motivating force to replace the one that God gave him; let us invent an artificial society and direct it as it should go!”
When the theorist reaches this point, he sees an endless vista arising to challenge his logic or his imagination. If his mind runs to dialectics and his temperament to melancholy, he devotes himself wholly to the analysis of evil; he dissects it, he puts it in the test tube, he probes it, he goes back to its very beginnings, he follows it forward to its ultimate consequences; and since, in view of our innate imperfection, there is nothing in which evil is not present, there is nothing at which he fails to carp bitterly. He presents only one side of the question when he examines property, the family, capital, industry, competition, freedom, self-interest—the damaging and destructive side. He reduces human biology, so to speak, to a clinical post-mortem. He defies God to reconcile what has been said of His infinite goodness with the existence of evil. He defiles everything, he makes everything distasteful, he denies everything; nevertheless, he does succeed in winning a certain sullen and dangerous following among those classes whose suffering has made them only too vulnerable to despair.
If, on the other hand, our theorist has a heart open to benevolence and a mind that delights in illusions, he takes off for the happy land of dreams. He dreams of Oceanas, Atlantises, Salentes, Spensones, Icarias, Utopias, and Phalansteries; he peoples them with docile, loving, devoted beings who would never impede the dreamer’s flights of fancy. He complacently sets himself up in his role of Providence. He arranges, he disposes, he creates men to his own taste. Nothing stops him; no disappointment overtakes him. He is like the Roman preacher who, pretending that his square cap was Rousseau, refuted vigorously the Social Contract and then triumphantly declared that he had reduced his adversary to silence. In just this way the reformer dangles before the eyes of people in misery a seductive picture of ideal bliss well fitted to make them lose their taste for the harsh necessities of real life.
But the utopian is rarely content to stop at these innocent dreams. As soon as he tries to win mankind over to them, he discovers that people do not readily lend themselves to transformation. Men resist; they grow bitter. In order to win them over, he speaks not merely of the good things that they are rejecting; he speaks especially of the evils from which he proposes to deliver them. He cannot paint these too strikingly. He grows accustomed to increasing the intensity of the colors on his palette. He seeks out the evil in present-day society as passionately as another would seek out the good. He sees only suffering, rags, emaciated bodies, starvation, pain, oppression. He is amazed, he is exasperated, by the fact that society is not sufficiently aware of all its misery. He neglects nothing as he tries to make it shake off its apathy, and, after beginning with benevolence, he, too, ends with misanthropy.
God forbid that I should question any man’s sincerity! But I really cannot understand how those political theorists who see a fundamental antagonism at the foundation of the natural order of society can enjoy a moment’s calm and repose. It seems to me that discouragement and despair must be their unhappy lot. For if nature erred in making self-interest the mainspring of human society (and her error is evident as soon as we admit that men’s interests are inherently antagonistic), how can they fail to see that the evil is beyond repair? Not being able to go beyond men, for we are men ourselves, where shall we find a fulcrum for our lever with which to change human tendencies? Shall we call upon law and order, the magistrates, the state, the legislator? But to do so is to appeal to men, that is, to beings subject to the common infirmity. Shall we resort to universal suffrage? But this is only giving the freest rein of all to the universal tendency.
Only one recourse, then, remains open to these social planners. They must pass themselves off as the possessors of a special revelation, as prophets, molded from a different clay, drawing their inspiration from a different source from that of the rest of mankind; and this is doubtless the reason that we often see them enveloping their systems and their admonitions in mystical phraseology. But if they are sent from God, let them prove their high calling. In the last analysis, what they desire is supreme authority, the most absolute, despotic power that ever existed. They not only desire to control our actions; they even go so far as to propose to alter the very nature of our feelings. The least that can be asked is that they show their credentials. Do they expect that humanity will take them at their word, especially when they can come to no agreement among themselves?
But, before we examine their blueprints for artificial societies, is there not something we should make sure of, namely: Are they not on the wrong track from the very outset? Is it, indeed, certain that men’s interests are inherently antagonistic, that inequality develops inevitably and irremediably in the natural order of human society, under the influence of self-interest, and that God, therefore, was obviously wrong when He told man to pursue his own happiness?
Only government interference can screw up an economy like this. Normal market forces would have would have seriously curtailed subprime lending. Instead, government encouraged and threatened legal action against lending institutions which did not make loans to minorities (read “bad risks.”)
It really is frustrating hearing “capitalism” and “the free market” blamed for a crisis whose scaffolding was built by the likes of Dodd and Frank. Take the bogus mortgages to deadbeats and illegals out of the picture and there would be no bubble and no collapse.
The Government is removing the PAIN of failure, therefore people will repeat the mistake. Capitalism only works when people are allowed to succeed and fail without Government intervention.
Psssssst.
Hey Buddy...ever hear of the American Dream Downpayment Assistance Act of 2003 ?
Bush signed it into law Dec.16 2003..after Congress voted and approved it unanimously..that’s right..100%..not one nay vote in either the House or Senate.
And this after the Heritage Foundation ran an article Dec.5 claiming that it was redundant and fiscally irresponsible.
This just shows how no one ..NO ONE...has been minding the store all these years.
So when we talk about how Liberals and social engineering got us where we are today..let’s remember ...there’s plenty of blame to spread around.
When I hear folks here blame it all on Liberals and Democrats..it annoys me ..makes me think of all those folks over at MSNBC and DU claiming that it was just Republicans and their free wheeling de-regulation that got us here.
Thanks. I hadn’t heard of it before...
PURPOSE AND SUMMARY (p.3)
H.R. 1276, the American Dream Downpayment Act, amends the
Cranston-Gonzalez National Affordable Housing Act to authorize
the Secretary of HUD to make grants to participating jurisdictions
for downpayment assistance to low-income, first-time home buyers
using the HOME program as a distribution mechanism.
DISSENTING VIEWS (p.16-17)
The American dream, as conceived by the Nation’s founders, has
little in common with H.R. 1276, the so-called American Dream
Downpayment Act. In the original version of the American dream,
individuals earned the money to purchase a house through their
own efforts, oftentimes sacrificing other goods to save for their first
downpayment. According to the sponsors of H.R. 1276, that old
American dream has been replaced by a new dream of having the
federal government force your fellow citizens to hand you the
money for a downpayment.
H.R. 1276 not only warps the true meaning of the American
dream, but also exceeds Congress’ constitutional boundaries and
interferes with and distorts the operation of the free market. Instead
of expanding unconstitutional federal power, Congress should
focus its energies on dismantling the federal housing bureaucracy
so the America people can control housing resources and use the
free market to meet their demands for affordable housing.
As the great economist Ludwig Von Mises pointed out, questions
of the proper allocation of resources for housing and other goods
should be determined by consumer preference in the free market.
Resources removed from the market and distributed according to
the preferences of government politicians and bureaucrats are not
devoted to their highest-valued use. Thus, government interference
in the economy results in a loss of economic efficiency and, more
importantly, a lower standard of living for all citizens.
H.R. 1276 takes resources away from private citizens, through
confiscatory taxation, and uses them for the politically favored
cause of expanding home ownership. Government subsidization of
housing leads to an excessive allocation of resources to the housing
market. Thus, thanks to government policy, resources that would
have been devoted to education, transportation, or some other good
desired by consumers, will instead be devoted to housing. Proponents
of this bill ignore the socially beneficial uses the monies
devoted to housing might have been put to had those resources
been left in the hands of private citizens.
Finally, while I know this argument is unlikely to have much effect
on my colleagues, I must point out that Congress has no constitutional
authority to take money from one American and redistribute
it to another. Legislation such as H.R. 1276, which takes
tax money from some Americans to give to others whom Congress
has determined are worthy, is thus blatantly unconstitutional.
I hope no one confuses my opposition to this bill as opposition to
any congressional actions to ensure more Americans have access to
affordable housing. After all, one reason many Americans lack affordable
housing is because taxes and regulations have made it impossible
for builders to provide housing at a price that could be afforded
by many lower-income Americans. Therefore, Congress
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17
should cut taxes and regulations. A good start would be generous
housing tax credits. Congress should also consider tax credits and
regulatory relief for developers who provide housing for those with
low incomes. For example, I am cosponsoring H.R. 839, the Renewing
the Dream Tax Credit Act, which provides a tax credit to developers
who construct or rehabilitate low-income housing.
H.R. 1276 distorts the economy and violates constitutional prohibitions
on income redistribution. A better way of guaranteeing an
efficient housing market where everyone could meet their own
needs for housing would be for Congress to repeal taxes and programs
that burden the housing industry and allow housing needs
to be met by the free market. Therefore, I urge my colleagues to
reject this bill and instead develop housing policies consistent with
constitutional principles, the laws of economics, and respect for individual
rights.
RON PAUL.
Full report...here...
http://financialservices.house.gov/media/pdf/hr108164.pdf
The definition of Moral Hazard.
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