The free market at work

by Russ Roberts on February 13, 2009

in Housing

The Washington Post reports:

J.P. Morgan Chase, Bank of America and Citigroup announced temporary moratoriums on foreclosures today at the urging of a key House member.

Top executives from these firms endured tough questioning before the
House Financial Services Committee earlier this week, including about
whether the banks have done enough to help struggling homeowners. In
public statements and letters to the committee released today,
Citigroup and J.P. Morgan sought to show the extent of their efforts.

J.P. Morgan Chase said it would not begin the foreclosure process on
any owner-occupied properties until March 6. "We believe three weeks is
adequate time for the Treasury to announce — and for us to implement
– a new plan," Jamie Dimon, Chase's chief executive, said in a letter
to Rep. Barney Frank (D-Mass.), chairman of the committee.

Barney Frank is the one member of Congress most associated with making sure that everyone, including poor people, can own a home. I wonder if he realizes that this kind of policy will make it harder for poor people to get loans in the future. (HT: Zev Fredman)

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  • vidyohs

    You can't slocum.


    One of the nation's best salesmen/trainer said, "You can't change anyone's mind, you just keep putting information in front of them until the change their own mind." I say this presumes an open mind, and with lefties that presumption is proven wrong in the vast majority of cases.


    Cut 'em if the stand, shoot 'em if they run, or learn to live their lifestyle; those seem to be the options left to us.

  • Slocum

    You know, I've explained the tobacco settlement boondoggle to a few left of center friends, and they just *can't* grasp it. They understand the facts -- and they don't dispute them. But it doesn't change what they think because it doesn't change what they feel -- that even though the big tobacco companies have profited, the poor smokers are paying through the nose, the trial lawyers pocketed billions, and the states blew their tobacco settlement windfalls like pennies from heaven -- somehow, despite all that, it was still 'the right thing to do'. Because it was a 'good first step'. Even though it made things worse. Or because it 'punished Big Tobacco'. Even though it didn't. But it feels like it did. And somehow that's what really matters. It's the damnedest thing.


    So the question is, "What kind of argument -- if any -- can be persuasive to people who see the world that way?". Because I don't think George Will's column works for them. It works for us -- but what good is that really?


  • vidyohs

    T O E,


    I see we think somewhat alike, and you offer some good insights.


    Here is the response to the first of responders to my e-mail list on the post Compliant Schizophrenia.


    "I see you two got it. I thought about it later after posting this and I thought that well maybe I didn't explain the schizophrenia better. There are some I know that will miss it.


    The law just simply forces us to act like John is a normal neighbor, when he is not. He is a thief, yet we can't hunt him and his ilk down with guns and knives, shoot them or hang them like we would common thieves even though we know we should and inside we want to.


    Of course the entire democratic party and their believers are just like John, so we move amongst a lot of people we know that behind their smile and friendliness they will steal and they are stealing; but we smile and pretend.


    As an aside, frequently the "johns" of America would be shocked to find you view them as thiefs, because they are simply reacting to their enculturation and never have concisously thought through their actions or its implications towards their personal morality.


    Schizophrenic, eh?


  • The Other Eric

    On the Sunday morning talking heads shows I hear the same phrase again and again, "Obama's big victory." This is a feeble-minded non-analysis of a legislative vote-- a vote on complex legislation that none of those voters read.


    Vidyohs, your point, that people who believe in collectivist central planning "...seem rational, seem well mannered, sincere, give the illusion of intelligence, and not thuggish..." is crucial. There is a mythology in place that is woven into public discussion and the media that American liberals "care more" about people. They don't define 'the people' in a way that indicates they would listen to them. They can't articulate how central planning and more non-representative bureaucracy will 'help the people' without relying on a superior but highly flexible 'morality' like Greg Ransom points out.


    Sam Donaldson, articulating what many liberals deeply believe, said about Washington "If you don't vote for something, you're doing nothing."


    Please remember that line this week when you work, care for your families, and earn a living-- you're not voting, so it really means nothing.

  • vidyohs

    We in America are forced to live in a state of compliant schizophrenia. There is natural reality and then there is the official government version of our environment; we as individuals are forced to ignore the natural reality when it is over-ridden by the dictate of the official government version.


    The official government version reflects the scriptures of the Great Socialist Church and as such is a fantasy from its conception.


    I realized this February 13, 2009 while preparing for a legal deposition of an individual, president of a maritime union local, who was to speak to the union viewpoints regarding the voluntary or compulsory nature of a directive from the employing company.


    The court reporter and I were set up and waiting past the designated start time and wondering if the deposition was even going forward, when the deponent walked in and introduced himself, informing us that yes the deposition was going forward but the attorneys were late and held up in traffic coming down from Houston.


    This individual, call him John, was in his early forties, confident, likeable, and somewhat smooth in his demeanor; a typical union official, which is the same thing as saying a politician.


    Before his arrival the court reporter and I had been talking about business methods of multinational companies, one in particular. So, after briefly greeting John, we continued our discussion with his participation.


    The discussion went from the particular company and somehow wound up on the topic of how companies now short us on the contents of the can and package goods that are carried in stores. That brought different stores into the conversation and Walmart became the topic. John expressed the expected union view of Walmart which is one of revulsion and disgust at their terrible toll on workers. He even mentioned being taken to a Walmart by his wife recently, a trip he cut short because he told her the place made him feel nauseous. I sarcastically said, “Yeah, you gotta hate people who want to bring you quality goods at the best price. That’s pure evil.” John became less active in our conversation after that, and shortly our attorneys showed up.


    While the deposition was in progress I watched John’s performance and it occurred to me that he was epitome of examples of our compliant schizophrenia.


    As a union member, believer, and activist, John can only be a liberal/democrat/communist/progressive/, in other words a thief. John is a believer that theft is moral if performed by a majority. He is in reality no different than the thug that awaits you at that unlighted alleyway at the middle of the block; except that the thug in the alleyway is under no illusions about the morality of his acts, and John is.


    Day to day we are face to face with these people and in constant war with them over the ownership and disposition of the fruits of our labor; but, under tight constraints of law we can not name them and charge them with the crimes they commit in the name of the majority, and the crimes they clearly intend to commit in the future.


    We live as schizophrenics, knowing that we are face to face with thieves, most of whom seem rational, seem well mannered, sincere, give the illusion of intelligence, and not thuggish in appearance in any way. The schizophrenia imposed on us by government makes it difficult to remember that they are thieves. They will reach into your wallet, your pocket, your bank account, and steal from you as surely as the thug in the alleyway will stick a gun in your face and demand the contents of your wallet and pockets.


    I have no purpose for writing this other than to put it down in an expression of opinion, and it fits the thread. I suppose for me, being able to articulate it is just a little like reaching up and turning on a light

  • vidyohs

    Good stuff ME, I kinda think I sorta maybe understood that. :-)

  • Mesa Econoguy

    We don’t need any more of this heavily regulated unregulated capitalism.


    We need a (more) heavily regulated command economy, which will guarantee houses, along with everything else, are always affordable – especially for people who can’t afford them – and that politicians will be in continual control of all economic and financial processes.


  • seanooski

    It won't make it harder to get loans at all. Barney Frank and his ilk will simply change the rules to force lenders to make loans to losers anyway. Don't you know that the magic wand of government can fix anything?

  • Greg Ransom

    Thomas Sowell has written a good deal on the priority of "intentions" to leftist and their unconcern for what actually happens.


    Shelby Steele has written a bit on a similar theme -- the importance of "moral immunity" to the leftist. What matters to the leftist is the appearance of morality, not the reality.


    Friedrich Hayek has talked about how real morality, real ethics, involved following principles mostly of the "though shall not" kind, whereas leftist "morality" involves the embrace of immediate expediency and the rejection of traditional principles -- doing what "works" or "feels right" in the short term and at the immediate moment and belittling "irrational tradition".


    Edward Feser has a good essay on the topic here:


    http://mises.org/journals/jls/17_1/17_1_2.pdf


    See also Hayek's essay "Principle or Expediency":


    http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=301&chapter=37421&layout=html&Itemid=27


    I'm guessing Frank thinks everyone will perceive him as a great model of leftist ethics, and he could care less what really happens -- as he's shown again, and again, and again across the course of his career.


    Hayek didn't write an essay titled "Why the Worst Get to the Top" for no reason.


    You wrote:


    "I wonder if [Barney Frank] realizes that this kind of policy will make it harder for poor people to get loans in the future."

  • Greg Ransom

    Thomas Sowell has written a good deal on the priority of "intentions" to leftist and their unconcern for what actually happens.


    Shelby Steele has written a bit on a similar theme -- the importance of "moral immunity" to the leftist. What matters to the leftist is the appearance of morality, not the reality.


    Friedrich Hayek has talked about how real morality, real ethics, involved following principles mostly of the "though shall not" kind, whereas leftist "morality" involves the embrace of immediate expediency and the rejection of traditional principles -- doing what "works" or "feels right" in the short term and at the immediate moment and belittling "irrational tradition".


    Edward Feser has a good essay on the topic here:


    http://mises.org/journals/jls/17_1/17_1_2.pdf


    See also Hayek's essay "Principle or Expediency":


    http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=301&chapter=37421&layout=html&Itemid=27


    I'm guessing Frank thinks everyone will perceive him as a great model of leftist ethics, and he could care less what really happens -- as he's shown again, and again, and again across the course of his career.


    Hayek didn't write an essay titled "Why the Worst Get to the Top" for no reason.


    You wrote:


    "I wonder if [Barney Frank] realizes that this kind of policy will make it harder for poor people to get loans in the future."

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