— Which, unfortunately, is not only the opinion of ill-informed teens, hipster baristas, and WaPo wunderkind bloggers who refuse to drive because cars were like, invented over a hundred years ago. It is practically policy for this administration.
Bill Wilson, ALG, on what he sees as progressive “trial balloons” presaging the pitch for another round of “quantitative easing” and even more “stimulus” proposals :
Zillow reported last month that 28.4 percent of homeowners are underwater, a number that is likely to keep rising the more overall home values continue to plunge. The problem of negative equity has likely been compounded, ironically, by the $22 billion homebuyers tax incentive program.
3.3 million people utilized the program, which temporarily juiced the market, and have now seen prices depreciate again just as the government was saying the recovery was at hand. Whoops.
Coupled with rising foreclosures and persistently high unemployment at 9 percent, including a youth unemployment rate (i.e. those under 25) over 17.2 percent, Keynesians like Krugman, the Times editorial board and those at the Obama Administration can only come to one conclusion: Not enough money was spent, borrowed, and printed by the government. They can’t believe their lying eyes.
That is because their ideology does not allow for another possibility: That the financial crisis caused by government “stimulus,” too low interest rates by the Fed, and loose underwriting policies by Fannie Mae, Freddie Mac, and the Federal Housing Administration, not to mention the Community Reinvestment Act regulations that weakened lending policies, lowered down payments, and otherwise pushed risky loans on individuals who could not afford them.
Government created the bubble. And when it popped, the resultant correction was unavoidable.
Obama has simply prolonged the recession he swore to pull us out of, as shown by Case-Shiller’s data. After the “stimulus” programs ended, the temporary spike in home values did too. Under the theory, the “recovery” should have been self-sustaining. Instead, values went down anyway.
We should have just let prices hit the bottom in the first place. Instead of bailing out banks, it would have been better to let investors that bet poorly on housing to fail. If government had just gotten out of the way, we would already be in recovery. That is the path Iceland has followed, and compared to Ireland, which did bail out its banks, is speeding more rapidly into recovery, and without the burdensome, excessive public debt accrued.
The American people have wasted over $2 trillion on a lie. Obama has been given everything he wanted — everything he said would turn the economy around. The “stimulus”’ has failed. He has failed.
Fine. Just as long as you didn’t hope his attempts to “transform” the US into a socialist Utopia managed by a huge centralized ruling class and its bureaucratic tentacles (using liberal fascism and crony corporatism as a temporary bridge to usher us into the new worker’s paradise), would fail.
Because that would have been unhelpful and, well, needlessly candid.
Honestly. Think of the moderates. Assholes.
This must be what Harvey Mansfield meant the other day when he wrote “you can lose more money listening to them [economists] than by trying to read books in sociology.”
But he’s a Good Man™
This fellow hits the nail squarely on the head. There should have been no artificial manipulation of the market. The quicker it bottomed out, the quicker actual recovery would begin.
There should have been no bailout; not for the banks, car companies, whatevz. I’m sure there are many who’ll disagree with me on this, but the unfortunate truth is that everyone who over-leveraged themselves, whether investment banks playing the margins to the max or homeowners buying more house than they could hope to afford even when they were “in high cotton” simply because they bought into the flawed idea that they would be able to flip/refinance ad infinatum, should have had to face the reckoning that was concomitant to their risk taking; just like they’d have been able to reap the reward if they’d gotten out when the time was right.
Now, instead of growth, we have banks, and the Fed, carrying scads of non-performing assets on, and off, their balance sheets in the form of bad paper that may never be paid back…
Better to take the hit up front. Unencumber the balance sheets, so they have actual money to loan to worthwhile ventures instead of keeping on account with the Fed to both satisfy reserve requirements and get paid overnight interest that’s greater than the short term bond rates, and get back to the business of expanding the economy.
All that’s been done is hold the house of cards together with a little spit and paper. better to have let it fall already; we might be back on a path to some real growth and wouldn’t have an additional 2 trillion tacked on to the national debt.
We have the double dip, now Obama goes for the hat trick or is it a triple axel?
Obama definitely won’t let it fall now, because his re-election is at stake, and that is more important than anything else.
QE3 would be a disaster for regular folks, with the inflation it would engender; although, I’m sure the stock market would swoon. And I’m sure the Obama bunch, and their cheerleaders like Krugman et al, would continuously repeat how the weal dollar would be soooooooo good for exports; the increase in exports being the latest campaign promise that Obama’s contends he’s dutifully fullfilling.
Not only should there be no QE3, but Stanford’s John Taylor, the guy the “Taylor rule” is named after, says that the Fed funds rate should be 1% right now. Needless to say, it’s not…
It’s all artificial manipulation, Bob, as you know. From dollar one immediately following the Federal Reserve Act, the entire system is one big progressive contortion hung on the backs of vestiges of “the free market” like the ruling Communists are on the backs of Chinese workers.
Being “underwater” only matters if you want to sell the house.
Your larger point is certainly correct JHo.
That’s a real problem for people looking to downsize into retirement or take a better job (hell, move some place where you can find work if that’s what you need), Mojo. It adds to the uncertainty and overall bearish attitude.
Which is kinda maddening (apologies) because this state of affairs is systemic, counterintuitive in its effects (think heroin addiction and the stock market in the same instant), mentally intangible (you can’t believe it and you can’t mentally or politically solve it even when you do), paints a despairing view of the ruling class, and makes you sound like some raving Paulian nutbar to the usual conservative circles.
It is the creature from Jekyl Island.