Tuesday, September 30, 2008
Even for the person that thinks these wars were necessary and have produced a lot of good, you still might hesitate at that price tag. Maybe the monetary cost is not worth the reduction in risk that resulted. If you think it is, what amount of money would tip the scales for you against war?
In my view though it's a no brainer. I truly believe the wars have made us less safe. We're creating a whole generation of angry orphans, all to depose a couple of governments that really didn't attack us. So of course I'd prefer a check.
Tuesday, September 23, 2008
Wednesday, September 17, 2008
This isolation from market discipline is the root cause of the recent reports of mismanagement occurring at Fannie and Freddie. After all, if Fannie and Freddie were not underwritten by the federal government, investors would demand Fannie and Freddie provide assurance that they follow accepted management and accounting practices.
Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.
Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary, but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.
Sunday, September 14, 2008
Saturday, September 13, 2008
Wednesday, September 3, 2008
Ron Paul's wife has been sick, and he was speaking of those that have sent him well wishes. He says that he was delighted to receive these notes, and they came not just from Christians and Jews, but also Muslims. Lo and behold he also got them from agnostics and atheists and he was delighted to receive those as well. Listen to this brief segment here or the entire speech here. The atheism statement is at about the 15 minute mark.