Barney Frank doesn’t know what to do:
“I’ve said we should abolish Fannie Mae and Freddie Mac in their current form and come up with a whole new system of housing finance,” said Representative Barney Frank, a Massachusetts Democrat and the chairman of the House Financial Services Committee. “I can’t say when. And I don’t have any idea what that new system will look like. No one, I believe, knows. All we really know is that we need something new.”
Here’s an idea. Why not let people of who want to borrow money to buy a house convince the people who lend the money that there’s a good chance that the money will get paid back. Creative, no? It’s called voluntary exchange. Or a market. Or normal. Fannie and Freddie were abnormal. We don’t need a “new system.” The old system didn’t work because you, Barney Frank, and others, tried to steer it. Let’s have NO SYSTEM that you figure out and control and steer. Let’s let the housing market emerge that has the built-in feedback loops of profit and loss.
Here is some suggested reading for Mr. Frank:
From Hayek’s The Fatal Conceit:
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
From Adam Smith’s The Theory of Moral Sentiments:
The man of system, on the contrary, is apt to be very wise in
his own conceit; and is often so enamoured with the supposed
beauty of his own ideal plan of government, that he cannot suffer
the smallest deviation from any part of it. He goes on to
establish it completely and in all its parts, without any regard
either to the great interests, or to the strong prejudices which
may oppose it. He seems to imagine that he can arrange the
different members of a great society with as much ease as the
hand arranges the different pieces upon a chess-board. He does
not consider that the pieces upon the chess-board have no other
principle of motion besides that which the hand impresses upon
them; but that, in the great chess-board of human society, every
single piece has a principle of motion of its own, altogether
different from that which the legislature might chuse to impress
upon it. If those two principles coincide and act in the same
direction, the game of human society will go on easily and
harmoniously, and is very likely to be happy and successful. If
they are opposite or different, the game will go on miserably,
and the society must be at all times in the highest degree of
disorder.
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Those who consistantly lie assume that everyone lies, likewise, those who seek power via human exploitation assume that everyone does.
I'm not a fan of Heritage — hey, I'll show my colors, even if I don't know exactly what they are.
But, I'm even less a fan of ad hominem (ad affiliationum?) arguments. Even if I'm not a Heritage fan, I won't condemn a source I haven't read. The point of understanding bias isn't to reject hearing the opinion, is it? Using Heritage on the basis of a high Google page rank seems as reasonable a starting point as any. Arguing about the “obvious bias” of sources rather than about actual data seems like a tragic ending point.
I wasn't a fan of Bush, either, but it seems to me this path leads to the usual “our guy isn't as terrible as your guy was” arguments. Yes, I can see that in the Obama administration (as I've seen it in the past three regime changes). We'll never know what I would have disliked about a McCain administration.
RE: “You can't turn off history. “
I couldn't agree more. I wish people on here would pay more attention to history.
I don't see how using a term incorrectly (as in applying a nonexistent definition to a word) is semantics. Of course, I could be wrong – I only consulted 3 dictionaries to make sure I hadn't missed an alternate definition. I found no instance where a tax break (i. e. allowing people to keep their own money) would meet any of the definitions. If you have a reference with such a definition please share it.
See my reply above – I wrote it before I saw this post.
A subsidy is definitely NOT simply a diversion of resources. Not equal does not equal subsidy. Words have meaning and using language properly is important to prevent distortion of issues. You are using the word subsidy to mean something it does not.
Note, I am not debating your larger point. It may very well have some merit – I wish you would state it more effectively.
I gotta agree with carpe on this one. What is the effective difference between the govt giving you a grant to mine coal and a tax credit to do so? The money's all coming out of the same pot, the general revenue fund.
Denying that these are fundamentally different simply allows one to avoid the pegorative “govt subsidy” for the neutral “tax incentives” for the housing industry, mortgage sellers, mortgage brokers, homeowners, oil producers, families with kids, married couples…
Here's one: http://dictionary.bnet.com/definition/tax+subsi...
Here's another: (scoll down to the Brittanica entry)
http://74.125.47.132/search?q=cache:gg7eOBCffKE...
A third: http://encarta.msn.com/dictionary_561539566/tax...
And finally, Wikipedia: Under “Subsidy”, first sentence in subsection Types of Subsidies
“The money's all coming out of the same pot, the general revenue fund.”
Sounds like you see it as the government's money. That's a very dangerous bias.
As a practical matter, not going into the pot (tax break) has a similar effect as coming out of the pot (subsidy). I don't know what a pegorative is, but at least to me “tax incentive” is every bit as pejorative as “subsidy” – both methods are often (always?) abused in attempts at behavior modification. I am not defending tax breaks. Personally I would like to end ALL tax incentives AND subsidies.
“I won't condemn a source I haven't read”
For the record, I've read lots of Heritage pieces. Virtually all of them come from the same narrow range of ideological roots. No surprise considering the origins of Heritage, it's purposes, and where the get their money.
Wow. You don't see many subtle, well-argued entries like this one on this site.
I can't seem to find anything I disagree with in this one, except for the absence of the mandatory name-calling, disparagement, dismissals, and vitriol directed at opposing views.
No, Randy, I refer to your statement that “an expansion of the franchise is not really an expansion”
This implies that when property ownership was dropped as a requirement for the right to vote, when territories were granted statehood, when black men were given the vote by constitutional amendment after 600,000 American died winning them liberty and the franchise, when women won the franchise by constitutional amendment, when blacks were finally assured of the right to vote in the 1965 Civil Right Act, when 18-20 year-olds were enfranchised by constitutional amendment, when DC was give the right to vote in presidential elections, these were not expansions of the franchise.
Why did all these groups work so damn hard over the past 200+ years for the right to vote, and in what way did this not expand the franchise?
Were they all deluded and simply pawns of the established order?
Then you read way more Heritage than do I. But where they get their money shouldn't matter so much as whether their are citing accurate sources in this particular case. That's why I grabbed several sources and referred you to the Google search.
Not knowing what sources are acceptable to you, I did no filtering by source whatsoever, just grabbed a few to post. Next thing I know, you are accusing me of being some kind of right wingnut.
You showed colors that you would likely be reluctant to admit, especially to yourself.
Here and there.
Obviously, I'm not talking about “power that can be concentrated in the hands of individuals” (though I would accept the proposition that individuals of great wealth and those with direct control of politically active corporations do represent a significant threat, but not as much as a govt unconstrained by constitutional and democratic means, which does not describe our democratic republic.)
I didn't consult those sources (obviously) for word definitions. They do indeed describe the term the way you use it, so maybe I need to eat some crow. In contrast, Dictionary.com, Merriam Webster and American Heritage (IMO better and more respected dictionaries) do not include any such definition, so maybe it will be a very small serving on the side. Very interesting, thank you.
“Hear and There” I've missed that periodical. Can I find it at the Libertarian Science Reading Room or on the rack at the Hayek Cafe?
HA! Well said, Dave. You're welcome.
I have eaten crow on several occasions and recommend a merlot to accompany it. It cuts the foul taste.
Follow the money, Sam, follow the money.
I proudly display my colors! But I don't accept the characterizations of people who say “blue is red” and “green is pink” if you get my drift.
Here's the situation.
You claimed that “regulatory agencies were gutted under Bush”.
I countered with the observation that regulatory budgets grew under Bush.
You challenged me to provided verification.
I provided three sources and a link to a Google search with MANY other sources to support my claim.
You have attacked me and suggested I'm some kind of nut case, that is, you engaged in ad hominem.
What you have not done is provide any verification of your claim that “regulatory agencies were gutted under Bush”.
If this is some kind of pissing contest, you have yet to hit the target.
I proudly display my colors! But I don't accept the characterizations of people who say “blue is red” and “green is pink” if you get my drift.
The color I've been thinking of is “intellectual dishonesty”.
It's not my first serving either, but I usually have an imperial stout along with. I'll try the merlot!
A climate change denier! Why am I not suprised?
Where do you stand on the flat earth question, the Copernican question, the tobacco and cancer question, the diet and obesity question, the Darwin vs creation science question, and the Holocaust reality question?
OK, I went too far on that last one. I'd erase it if I hadn't already hit “post”.
My apologies, carpe. I mistook the immediately previous post as a response from Sam to my earlier post.
I for one do not hold the belief that those who “win” in markets have higher moral worth. Neither have I have seen such idiotic sentiments expressed or implied here at the cafe, so I have no idea who you're referring to.
I agree Barney has only one direct vote, but as Financial Services Committee chairman he has influence beyond simply voting, so it seems reasonable for his accountability to get extra emphasis. That said, you are absolutely correct that this is a totally bi-partisan created mess and many others need to be held to account as well.
SheetWise: “I do know that the climate changes”
Tex: “A climate change denier!”
“Danny, you're starting to make Al Gore look like a genius.”
Be careful here — we need to maintain a point of reference.
“Danny, you're starting to make Al Gore look like a genius.”
Be careful here — we need to maintain a point of reference.
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