Stupid Is, As Stupid Does
June 25, 2009
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Posted by Michael S. Langston
I’m not sure exactly when the voting public will start going directly to Congress to ask them to please stop hurting the economy, but I’m hoping really, really soon.
As most people with a passing understanding of economics are aware, we have recently hit economic hard times due to a collapsing housing market. This market collapsed because it needed to contract. There is no such animal in this world that will continuously forever increase in price by double digits.
So the mere fact houses were doing that for years, showed us that inevitably, it will have to stop and contract back to reality.
There were a variety of causes, loose lending practices, GSE’s implicit backing of all loans, corrupt lenders, idiotic consumers, etc, etc, etc – IMHO though, the GSE’s are the main culprits as their implicit backing allows for all the other pieces to be put into place.
Even if you don’t agree with that statement, one should at least be able to acknowledge our politicians mistakes with respect to Fannie & Freddie and how it certainly helped the current economic landscape to develop.
& what does congress do about this? Start pushing other GSE’s, mainly FHA (Federal Housing Authority) to begin the same process over again.
That’s correct – our politicians are currently pushing FHA to make the same idiotic guarantees that Fannie & Freddie did, that helped cause the current mess we’re in. It’s not like they can say they forgot what the real problems are – they know, and seemingly don’t care (here):
The demand for FHA mortgages has exploded during the past 14 months, increasing 314 percent nationally. In January and February alone, borrowers signed on for 670,000 FHA mortgages compared with 425,000 in all of 2007.
This has to be one of the most irresponsible moves in recent times. It not only demonstrates a disregard for society as a whole, but also demonstrates most politicians’ apparent belief in the stupidity of the voting public. Only with a belief that voters won’t out right reject the same corrupt politics, would anyone have the audacity to repeat the exact same mistakes in front of their bosses within side the same congressional session.
We’ll see if these politicians are correct in their belief in the phrase, “No one ever lost by underestimating the American public”… Or, maybe we’ll find out that in oppressive Iran, Iranians are more willing to protect their country from oppression and corruption than is the US public.
Categories: Economics, Politics
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Tags: Congress, Economics, GSEs, Housing Crisis, Obama Administration, Politics
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