Saturday, March 14, 2009

Don't Sweat the Small Stuff 18

One Little Victory?
I did a search on Yahoo using the keywords "2009 houston mayoral election" and to my surprise and delight, my announcement for the virtual campaign came up #1. A similar search on Google returned my Challenge to Houston's Mayoral Candidates on the first page. While this certainly won't lead to a landslide victory, it should help inject my ideas into the debate to some extent.

Petition to Reduce Government
If you live in Houston, be sure to sign our online petition calling for candidates to take a public position on reducing the size and scope of government.

The Financial Product Safety Commission
Sen. Dick Durbin has sponsored a bill that will stop mortgage companies from extending loans to individuals who can't afford them. In announcing his legislation, Durbin said:

We don’t say ‘buyer beware’ when people are buying prescription drugs or when they’re concerned about lead paint in toys. But when Americans purchase financial products ... they often have little idea what those products ... contain and whether they’re good for their families.

These are the same people who threatened mortgage companies with legal action if they didn't extend loans to people who couldn't afford them. Now they are going to run to the rescue with another regulatory agency--the Financial Product Safety Commission. This is like hiring a pedophile to work at a day care.

Things That Make You Go... Huh?
Every once in a while I will stumble across a web site that leaves my mouth hanging wide open. This site, which appears to very sympathetic to socialism, contains a list of "some truly dramatic government success stories that every American should know. Private enterprise could not have accomplished a single one of these feats." A few are listed below, followed by my comments.

The Federal Reserve System: Using Keynesian policies to expand or contract the money supply, the Fed has completely eliminated the depression from the American economic experience in the last six decades.

As we are mired in the worse economic crisis since the Great Depression, the owner of the site may want to re-think this one.

Ban on DDT and PCBs: Industry did everything in its power to stop the ban of these highly poisonous pesticides, which devastated wildlife populations. But from 1970 to 1983, the amount of DDT in human body fat fell 79 percent.

And the number of deaths from malaria--which had been virtually wiped out by DDT--is an estimated 2.7 million each year. I am sure that the nearly 100,000,000 people killed by malaria consider this a real success story.

Federal Home Loans: This agency helps half a million Americans buy homes each year by guaranteeing their mortgages. Without them, millions of first-time buyers would have been denied home loans.

Yes, and without those loans many of those people wouldn't be facing foreclosure and we wouldn't have experienced a housing bubble.

Securities and Exchange Commission: Before this agency was created, insider-trading and deceptive stock dealings ran rampant on Wall Street. The SEC enforces full and honest disclosure of all stock transactions, and fights to curb insider trading.

Can anyone say Bernie Madoff or Stanford Financial?

If massive death, a horrible economy, and corrupt financiers are examples of government success stories we don't need to speculate as to the motivation of this site's owner. It certainly isn't human welfare.

Hazlitt Predicted the Housing Bubble
Henry Hazlitt predicted the housing bubble in 1946, writing in Economics in One Lesson:
Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to "buy" houses that they cannot really afford. They tend eventually to bring about an oversupply of houses compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly over expansion. (page 47)

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