Summer Meetings:
Despite the high oil costs, the road bids were manageable. The contractor (EJB) was a little late, but that worked to the advantage of the taxpayers since the asphalt prices were a little lower. The Wyatt Drive tot lot is way behind schedule, but completion is expected soon.
The Presidential Debate 10/7/2008:
The best commentary on the recent McCain - O'Bama debate comes from Pennsylvania Politics Anonymous recovering member “Steve.” Steve says:
It was definitely an evening of one-upsmanship and trash talking. in the end, O'Bama authoritatively sent McCain back to the "minor leagues", but not before McCain showed O'Bama his "A-game." McCain's first pointed barb was a direct hit when he explained how price controls can't take into account costs of opportunity or factors of production. Everybody in the house was all "what, what!" but O'Bama definitely thew it down when he destroyed the Labor Theory with the theory of marginal utility. O'Bama totally REJECTED McCain, as if to say "get that sh*t outta my house, b*tch!" Finally, when O'Bama unified the fields of gravitation and electromagnetism in a single elegant proof, I couldn't help but throw my popcorn into the air and yell "HOY-YO!!"
The sub prime mess and the recent federal bail out:
I've been reading some on this and wanted to provide Maidencreek residents with interesting links.
Right now you hear some people saying that this is a “market failure.” Bankers made loans to risky people (i.e. poor people) These loans were then bundled into 100 million dollar bundles (to reduce the risk) and then sold. The whole thing worked OK as long as house prices continued to rise. I hear some calling the bankers and brokers greedy, but wouldn't greed argue against loaning people money who may very well never pay you back?
When something this messed up happens, you have to look how the incentives changed. What changed that caused bankers to make risky loans?
Much has been written on this, but I'll give you a short outline along with links to a scholarly article and newspaper articles to support the points:
President Carter in 1977 implements the CRA (Community Reinvestment Act) Requiring banks to write low interest mortgages in risky neighborhoods.
Under Clinton in 1994 the Riegle-Neal Interstate Banking and Branching Efficiency Act passes and allows groups line ACORN to pressure merging banks to make MORE risky low interest loans.
Under Clinton in 1995 the US Treasury Department created the multibillion-dollar "Community Development Financial Institutions" fund to "provide banks with access [i.e., taxpayers' dollars] to new opportunities to finance community economic development" as "encouraged" by the CRA.
The above points are from the article: The CRA Scam and its Defenders Daily Article by Thomas J. DiLorenzo Posted on 4/30/2008 (Thomas DiLorenzo is professor of economics at Loyola College and a member of the senior faculty of the Mises Institute.)
Sept 30, 1999 sees a NYT article that is prophetic (from the article) ''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.'' See the article at: Fannie Mae Eases Credit To Aid Mortgage Lending By STEVEN A. HOLMES Published: September 30, 1999
Sept 11, 2003 The Bush administration pushes for more regulation of these sub-prime loans. Bush fails to spend the political capital necessary to get this through. Read the quotes of Barney Frank who now blames the free market for the sub-prime mess.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
Representative Melvin L. Watt, Democrat of North Carolina, agreed. ''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.
The above bullet points come from This NYT article: New Agency Proposed to Oversee Freddie Mac and Fannie Mae By STEPHEN LABATON Published: September 11, 2003
During the bail out debate many in Congress said that the government buying these bad loan bundles may actually make the taxpayers money after 5 years or so.
Suppose the loans don't make money, then the taxpayers lose because the government has lost their money buying bad loans.
Perhaps even worse, is the possibility that the loans will pay pay back after a number of years. No doubt the money paid back will be squandered on another socialist government program, and I can just hear Barney Frank of Massachusetts saying “ That $700,000,000,000.00 bail out wasn't so bad. After all this the taxpayers got money back, and we gave housing to the poor. Let's do make it a permanent policy of the CRA.”
Finally there is a Youtube video with some of these bullet points as old news clips:
http://www.youtube.com/watch?v=_MGT_cSi7Rs&feature=related
Free Book Offer:
Demand has caused me to order another case of books. I have copies of the Fredrick Bastiat book “The Law” available to Maidencreek residents. Email me if you want one.
Paid for by Roy Timpe