Every president during my lifetime - republican and democrat - thinks part of his legacy will be bringing peace to the middle east. It is a foolish endeavor, but egos often know no bounds. When the president finally realizes that diplomacy won't work, he throws money at both sides. We taxpayers lose money, the largesse doesn't accomplish its goal, and the whole process repeats iteself in the next administration.
But Obama's latest giveaway may well be the stupidest one yet. Every serious student of middle east politics knew the most recent talks never had any chance of success, and most of them said so. But politicians can't admit failure, so to keep them from foundering Clinton offers to bribe the Israelis with more than $3 billion in military and other aid. Then the administration frets: Will the Israelis accept? Duh!! They're not as stupid as we are. In exchange for agreeing to hold off settlement building for 90 days, and showing up at the talks during that period, the Israelis get $3 billion plus. It's a no brainer. And we taxpayers take it on the chin again just to stoke the egos of the people in control in Washington.
Monday, November 15, 2010
Friday, November 12, 2010
The Real Estate Debacle
It's hard to think of an area where government involvement has created the problem, then exacerbated it and then acted to prevent it from being solved. But the real estate bubble comes immediately to mind.
Government policy has for a long time been aimed at getting too many people to own homes. Program after program has encouraged home ownership. The Fed pushed it by keeping interest rates too low; Fannie and Freddie enabled it with easy money, egged on by elected officials who had a political agenda; and regulators continually relaxed lending standards to the point at which standards really didn't exist.
Not surprisingly, the result was a huge bubble in prices. So is government now helping get prices down to normal levels? Just the opposite. Program after program is trotted out to keep prices high. That includes various mortgage relief efforts that are doomed from the outset, because they're contrary to getting prices down to where the market deems them affordable.
And now the state attorneys general jump in, seeing a political advantage in doing so. Where foreclosures need to happen, delaying them doesn't help. Do the state AGs really believe that holding off a foreclosure for a month or so is somehow miraculously going to enable home owners to start paying again?
And so the politicians - having created the problem in the first place - go merrily on making the problem worse instead of getting out of the way and letting artificiality return to reality. Is it any wonder that so many people have lost faith in politicians' ability to do anything sensible?
Government policy has for a long time been aimed at getting too many people to own homes. Program after program has encouraged home ownership. The Fed pushed it by keeping interest rates too low; Fannie and Freddie enabled it with easy money, egged on by elected officials who had a political agenda; and regulators continually relaxed lending standards to the point at which standards really didn't exist.
Not surprisingly, the result was a huge bubble in prices. So is government now helping get prices down to normal levels? Just the opposite. Program after program is trotted out to keep prices high. That includes various mortgage relief efforts that are doomed from the outset, because they're contrary to getting prices down to where the market deems them affordable.
And now the state attorneys general jump in, seeing a political advantage in doing so. Where foreclosures need to happen, delaying them doesn't help. Do the state AGs really believe that holding off a foreclosure for a month or so is somehow miraculously going to enable home owners to start paying again?
And so the politicians - having created the problem in the first place - go merrily on making the problem worse instead of getting out of the way and letting artificiality return to reality. Is it any wonder that so many people have lost faith in politicians' ability to do anything sensible?
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