This is not a political site. This is an anti-political site. Our purpose is to advance civil society and the freedom philosophy and perhaps have a little fun while we're at it.

4/25/13

Okay, I'm Pissed Off Again

By Grant Davies

The other day a reader asked me if I was still writing for this blog. It was a fair question since I hadn't posted (much less personally written) anything here for twenty-two days. In fact, there has only been one post here in the month of April and only four in March. In the "blogosphere" that's forever. Over the last few years I've learned a few things about blogging. One of them is that you start to lose readers when you don't post regularly.

But I have some good news on that score. Since the regular readership of this blog falls a tad short of  the hits that The Drudge Report gets, there aren't that many to lose. And truth be told, almost all of the regular readers here know that I have continued to write (albeit somewhat less often) for my other blog, Cheeky History. So everyone knew I didn't croak and start writing opinion pieces in heaven about how God ought to run things differently up there.

Anyway, I apologize to those few (if any) who have missed the posts here. I'm also sure there are some people whose hope that I had stopped pontificating online are now dashed, but oh well.

Candidly, most of the time I write on this site when something that's happening pisses me off. And while there are still plenty of things happening that piss me off, I just got tired of being pissed. It's bad for your health and your attitude. All things considered, I'm happier when I'm not pissed, and I want to be happy as much as possible in this unhappy world. But in the last day or so, my "pissed off meter" went into the red zone again when I read about two items.

The first was when I discovered that the evil imbecile who decided to enlist his equally evil kid brother in a scheme to kill people at the Boston Marathon was on welfare.

The second was this morning when I read that the somewhat less evil imbeciles in the US Congress are secretly working behind the scenes to come up with a "Bi-partisan" agreement on how to exempt themselves and their employees from the Obamacare nightmare that is descending on the rest of us.

There is much to be said about both items but this post is starting to to violate my "KISS" (keep it short, stupid) rule, so I promise to work on these two "pissers" tonight. If I can put two readable essays together soon I'll publish them tomorrow or the next day so you can give them all the attention they don't deserve.

4/3/13

Let's Party Like It's 2006

Editors note: The following post is republished here with the express permission of the author, Dan Mitchell, who blogs at the excellent site "International Liberty" and who is featured here on a regular basis. People who do not follow his blog on a regular basis are missing out.

Apparently Learning Nothing from the Fannie Mae-Freddie Mac Disaster, the Obama Administration Wants to Subsidize Banks to Make More Dodgy Loans

“Let’s party like it’s 2006!”
Let’s assume you didn’t understand how a garbage disposal worked and, for whatever reason, you decided to stick your arm in one and turn it on. You would do some serious injury to your hand.

The rest of us would wonder what motivated you to stick your arm down the drain in the first place, but we would feel sympathy because you didn’t realize bad things would happen. But if you then told us that you were planning to do the same thing tomorrow, we would think you were crazy. Didn’t you learn anything, we would ask?

Seems like a preposterous scenario, but something very similar is now happening in Washington. The Obama Administration is proposing to once again put the economy at risk by subsidizing banks to give mortgages to people with poor credit.


Even though we’re still dealing with the economic and fiscal damage caused by the last episode of government housing subsidies!

Here are some of the unbelievable details from a report in the Washington Post.
The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit…officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default. Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.
Brings to mind the famous saying from George Santayana that, “Those who cannot remember the past are condemned to repeat it.”

But what’s especially amazing – and distressing – about this latest scheme is that “the past” was only a couple of years ago. Or, to recall my odd analogy, one of our hands is still mangled and bleeding and we’re thinking about putting our other hand in the disposal.

Some people understand this is a nutty idea.
…critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars. “If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a resident fellow at the American Enterprise Institute.
What’s also discouraging is that the government already is deeply involved in the housing market – even though this is an area where there is no legitimate role for the federal intervention.
Deciding which borrowers get loans might seem like something that should be left up to the private market. But since the financial crisis in 2008, the government has shaped most of the housing market, insuring between 80 percent and 90 percent of all new loans, according to the industry publication Inside Mortgage Finance. It has done so primarily through the Federal Housing Administration, which is part of the executive branch, and taxpayer-backed mortgage giants Fannie Mae and Freddie Mac, run by an independent regulator.
So I guess the goal is to have taxpayers on the hook for 100 percent of loans. “Don’t worry, it’s not our money”
Anybody want to guess whether this will end well?

By the way, this is bad policy even if we somehow avoid a new bubble and big taxpayer losses. Even in a”best case” scenario, the federal government will be distorting the allocation of capital by discouraging business investment and subsidizing residential real estate.

And as shown in this powerful chart, that will have adverse consequences for wages and living standards.
The part of the article that most nauseated me was a quote from the head bureaucrat at the Federal Housing Administration.



“My view is that there are lots of creditworthy borrowers that are below 720 or 700 — all the way down the credit-score spectrum,” Galante said. “It’s important you look at the totality of that borrower’s ability to pay.”
Gee, isn’t that nice that Ms. Galante thinks there are lots of borrowers with good “totality” measures? But here’s an interesting concept. Why doesn’t she put her money at risk instead of making me the involuntary guarantor on these dodgy loans?


I’ve already said on TV that we should dump Fannie Mae and Freddie Mac in the Potomac River. And I’ve argued that the entire Department of Housing and Urban Development should be razed to the ground. But perhaps this cartoon best shows the consequences of the Obama Administration’s new subsidy scheme.

P.S. We also should get rid of housing preference in the tax code. Our economy should cater to the underlying preferences of consumers, not the electoral interests of politicians.