Sep 25 2008

Heroes & Villains

Category: Congress,corporations,corruption,economyamuzikman @ 6:29 pm

From our earliest childhood we are confronted by the epic struggle between the forces of good and evil.   We see it in literature, in sports, on stage and screen.  It is a subject with apparently endless possibilities.  This conflict between two opposing forces is frequently illustrated through fictitious characters who personify those forces and who engage in frequent battles for supremacy.  Countless myths and stories are told of heroes vs villains, evil witches and fairy God-mothers, the cowboy in the white hat vs. the one with a black hat.  For every Luke Skywalker there must be a Darth Vader, Batman has the Joker and the Dodgers have the Giants (sorry, bias exposed!). The object lesson is clear.  These stories teach us to seek the good.  Likewise we learn to shun the bad.

But what is so very clear and simple in a play, motion picture or novel, is almost never as clear in real life.  But that doesn’t keep us from trying to disregard the complex in favor of the simple.  We want to blame someone for their evil deeds and we want the hero to show up just in the nick of time and save us just like in some old serial Western.

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Sep 23 2008

Home loans for illegals: a personal aside

Category: diversity,economy,illegal alienharmonicminer @ 10:40 pm

Michelle Malkin :: Townhall.com :: Illegal Immigration and the Mortgage Mess

It’s no coincidence that most of the areas hardest hit by the foreclosure wave — Loudoun County, Va., California’s Inland Empire, Stockton and San Joaquin Valley, and Las Vegas and Phoenix, for starters — also happen to be some of the nation’s largest illegal alien sanctuaries. Half of the mortgages to Hispanics are subprime (the accursed species of loan to borrowers with the shadiest credit histories). A quarter of all those subprime loans are in default and foreclosure.

Read the whole thing.  It is both stunning and a bit chilling.

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Sep 23 2008

If only the Lefties on the Hill had to debate Thomas Sowell in open forum

Category: economyharmonicminer @ 1:47 pm

Thomas Sowell :: Townhall.com :: A Political “Solution”

Why then is there such a mess in the financial markets? Much of that mess is due to the very people we are now turning to for solutions– members of Congress.

Past Congresses created the hybrid financial institutions known as Fannie Mae and Freddie Mac, private institutions with government backing and political influence. About half of the mortgages in this country are backed by these two institutions.

Such institutions– exempt from laws that apply to other financial institutions and backed by the implicit promise of government support with the taxpayers’ money– are an open invitation to risky behavior. When these risks blew up in their faces, Fannie Mae and Freddie Mac were taken over by the government, costing the taxpayers billions of dollars.

For years the Wall Street Journal has been warning that Fannie Mae and Freddie Mac were taking reckless chances but liberal Democrats especially have pooh-poohed the dangers.

Read it all.

UPDATE:  And then read this.

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Sep 16 2008

Maybe I Just Don’t Get It

Category: economy,freedom,housingamuzikman @ 9:48 pm

I have had a home mortgage of some sort since 1980. In the 28 years since my first loan I have sold property and I have bought property. I have refinanced home loans more times than I can remember. I have made money in real estate and I have lost money (a lot of money), in real estate. I have had loans that were labeled as “creative financing”. (This formerly often-used term can be freely interpreted as “You-can’t-really-afford-it-but-we’ll-think-of-something financing”). I have taken risks with loans – betting (and hoping) that real estate values would continue to rise, knowing I would be in serious trouble if they did not. I have faced “balloon payments”. In short I have made decisions both good and bad and lived with the consequences of both. But never even once did I think it was someone else’s job to bail me out if I made what turned out to be a bad decision.

I have been to real estate sales offices, escrow company offices, and bank loan offices. But never even once did I witness a borrower forced at gunpoint to sign loan documents, or tortured until they signed a purchase agreement. In fact I have never seen anyone forced in any way to enter into any kind of financial agreement.

So here is my question: How in the world did we ever get to the point where we expect the government to step in and protect us from the consequences of bad decisions?

I’m sorry some people have lost their homes to foreclosure. I really am. Who knows, maybe it will happen to me. It happens every day in this country and has for many many years. People over-extend themselves, lose jobs, have unforeseen events changes their lives…and some are just deadbeats. Foreclosure is not new. So why does the government suddenly care about this? The answer lies in the unprecedented volume of foreclosures. OK I get that. But what do you say to someone who lost their home to foreclosure, say 10 years ago? “Gee, too bad there weren’t more of you at that time, then maybe we would have bailed you out too.”

Maybe I’m missing something here…

As an adult I understand that every decision I make carries consequences. It is a fact I have tried to instill in my kids as well. Understanding that is a part of growing up. But I make decisions knowing full well I will and should bear the consequences of those decisions – not my neighbor, not my co-workers, not my government – me!

I just don’t get it.

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Sep 15 2008

If only reporters understood economics

Category: economy,election 2008,McCain,media,Obama,Palin,politics,taxesharmonicminer @ 3:57 pm

Sarah Palin criticizes Obama’s tax plans, and the AP seems to think it has corrected her, by stating an irrelevant piece of data. (not to mention a largely wrong one)

Campaigning on her own, the Alaska governor also said Democratic presidential candidate Barack Obama “wants to raise income taxes and raise payroll taxes and raise investment income taxes and raise business taxes and raise the death tax.

“But John McCain and I know that’s not the way you grow the economy,” she added.

In fact, independent groups such as the Tax Policy Center have concluded that four out of five U.S. households would receive tax cuts under Obama’s proposal, which include higher income and payroll taxes only for the wealthiest wage-earners.

Note that Palin did not say that Obama was going to raise everyone‘s taxes.  But the AP responds with a “fact check” from the Tax Policy Center that implies she did.  Surely this is simple failure to understand plain English. 

Speaking of plain English, four out of five U.S. households cannot receive income tax cuts, because two out of five U.S. households pay no income tax at all.  The last time I looked, two plus four does not equal five, a fact that apparently escapes both the AP and the Tax Policy Center.  Giving “tax cuts” in the guise of “refunds” to people who would not pay tax anyway is not a tax cut, it’s welfare, plain and simple.  It’s old fashioned socialistic confiscation/redistribution.

Speaking of the “independent” Tax Policy Center, while it is not directly affiliated with either party, it is most assuredly Left leaning, and usually favors Democratic policies.  They are sometimes subtle about it (although not in this case, calling a give-away a “tax cut”), but they are not possessed of Olympian detachment.

It would be more impressive (as journalism goes) to match the perspective of the Tax Policy Center with one from the Club for Growth, or the CATO Institute.  Both of these are also “independent” and “nonpartisan”, but simply more likely to lean Right. 

You can form your own opinion about why the AP would not seek their input in interpreting Palin’s statements.  I have mine.

In the meantime, what Palin said, quite clearly, is that if all of Obama’s tax plans are carried out, regardless of whether low-tax payers and non-tax payers get a short term “tax cut”, the economy is far less likely to grow vigorously than under McCain’s plan.  That economic growth would provide much more benefit to low- and non-tax payers than a single short term check, whether “tax cut” or “welfare”.

Go back and read her quote.  The APs rejoinder, masked as input from an “independent” think tank, is completely irrelevant to the point.

Embarrassingly, the AP seems not to know that.

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Sep 03 2008

Change of heart on universal health care

Category: economy,healthcare,humor,politics,Uncategorizedsardonicwhiner @ 8:50 am

I may have had a change of heart about universal health care, i.e., government funded health care for people who can’t afford it.

Herewith, my modest policy proposal:

In order to be fair to the taxpayers who are going to fund this health care program for the uninsured, we need to be sure that only people who have no other option are going to get healthcare on the public dime.    For that reason, a simple means test will be employed, to make sure that people who want government funded health care are people who couldn’t possibly afford the coverage themselves, and who are not simply operating with other financial priorities that use the money they could have spent on health insurance.

As a simple assessment philosophy, I propose that to qualify a person must prove they can only afford to live at or below the common living standard of the middle class in 1948, with no excess cash left over for frills.  No one in the middle class of the USA in 1948 was “poor” by any sane standard, nor should they be considered so now.

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Aug 31 2008

Complaints from the Right about Gov. Palin’s nomination

Category: Biden,economy,election 2008,McCain,Obama,Palin,politics,White Househarmonicminer @ 9:20 am

This fairly mild criticism from Powerline assumes “facts not in evidence” about the nature of economic knowledge required by a President, or Vice-President:

When I traveled with Senator McCain last November, just about the first question he answered was, what will you look for in a running mate. McCain responded that, first and foremost, he would want someone already qualfied to be president. Second, he said that because the economy is not his strong-suit, he would want someone with strong expertise in this area.

McCain did not say he wanted someone who would appeal to a potentially disaffected constituency within the Democratic party, or call attention (in an ironic way) to the inexperience of the Democratic nominee, or make such a splash as to counteract any Democratic convention bounce, or create a contrast to the Democratic vice presidential nominee, or “shake up” the Republican party, or “freshen up” the ticket, or reinforce his image as an opponent of corruption.

From the Left, such a criticism of Obama makes some sense, because the Left believes in complicated, frighteningly sophisticated economic models that supposedly allow the government appointed economic elites to tinker with the economy in the just the right way to make everything come out right.  These are essentially rooted in Keynes and Galbraith, both liberal progressive icons, because they are thought to have described a way to combine markets and capitalism with government management of the economy. Leaving out the fact the no one in the world knows enough to do such a thing, at least criticism of Obama makes sense, to the effect that he doesn’t know enough about economics to be President (economics of the liberal progressive brand, that is). Obama surely doesn’t have a detailed background in these matters, and so will be totally dependent on his advisers, economic rasputins all.

Does it make sense to level a similar criticism at Sarah Palin?

In a word, no. Here’s why.

Economics as understood from the right does not require a President who is deeply versed in complicated theories of market manipulation, and academic theories of how to rob Peter and pay Paul to make us all better off. It requires a President who knows enough to avoid wasteful spending, to keep taxes low, to keep regulation to a minimum, to encourage the development of energy resources, to remove as many barriers to free trading as possible, etc. It is not complex, and mostly requires a President who will avoid doing harm, supported by advisers who can help with the details.

Arguably, Sarah Palin has far more background in economic management than Obama, because in her executive roles she has cut taxes and spending. It is not complicated, and her behavior in office tells us all we really need to know about her economic background and perspectives, which is more than sufficient.  It is not an overstretch to say that if Congress had spent the last 8 years voting to do the sorts of things Palin has advocated, and has done as governor, we would all be in far better shape economically.  In fact, it’s more likely that the Congress would still be Republican.

So who, exactly, is unqualified here?

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Aug 04 2008

Privatized Profit, Socialized Risk: the problem of public/private companies

Category: capitalism,corporations,corruption,economy,housing,Uncategorizedharmonicminer @ 11:28 am

Larry Summers on the underlying problem of joint private/public companies, and how they led to the current housing market crunch.

Here is a really good creative capitalism idea. All Americans benefit from increases in home ownership because of the values like hard work, community, and respect for property that ownership instills. Families want desperately to own their own homes and accumulate equity. Yet it is very hard for conventional banks that borrow money over the short term to lend over the kind of 30-year horizons that best help families buy houses.

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Jul 23 2008

When there’s a financial crisis, look to the government as the cause, part 2

Category: Congress,corruption,diversity,economy,election 2008,housing,politicsharmonicminer @ 12:11 pm

Thomas Sowell continues his previous discussion of how the government is the primary cause of our current financial issues.

We don’t look to arsonists to help put out fires but we do look to politicians to help solve financial crises that they played a major role in creating.

How did the government help create the current financial mess? Let me count the ways.

Continue reading “When there’s a financial crisis, look to the government as the cause, part 2”

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Jul 21 2008

Yet another major scientist defects from the global warming religion

David Evans, consultant and scientist with the Australian Greenhouse Office from 1999 to 2005, says no evidence of carbon dioxide based greenhouse effect

since 1999 new evidence has seriously weakened the case that carbon emissions are the main cause of global warming, and by 2007 the evidence was pretty conclusive that carbon played only a minor role and was not the main cause of the recent global warming. As Lord Keynes famously said, “When the facts change, I change my mind. What do you do, sir?”

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