Let the market sort it out! (oh wait, maybe not)
I’m pissed. Seriously pissed off. So pissed I can feel my already high blood pressure soaring to new heights as I type this.
Why am I so mad? Is that I am upset about the inequity that exists in the world? Or that babies die from preventable disease? That I never get a seat on Metro anymore? Well yes, I am mad about all those things, but not today… not for this post anyway.
Nope, its the new stimulus package being debated in Congress is what has me ready to spit nails. Specifically – the housing market provisions (I don’t know enough about the rest of what is suggested to comment on it).
During the boom years – when dead goats could get $500k loans over the phone – Congress was no where to be found. Nearly everyone argued that the market was king, and you couldn’t possibly restrain it. That would be UNAMERICAN! That would be DISASTROUS! Nope, must not tamper with the market, for it knows best. And so it continued – housing prices spiraling higher, people taking out stranger and stranger loans in order to be able to pay those high prices, which of course continued to shove the prices upward – you get the picture. It was all about the market. We musn’t touch the market. So no one tried to keep those goats from getting loans they had no hopes of paying off if anything went wrong.
Fast forward a few years – the bottom falls out, and all those goats are screwed.
Suddenly, that once-sacred market just can’t survive on its own anymore. Nope, now Congress is giving money out left and right to try and save it, bailing out banks, trying to bail out those who never should have bought to begin with, and now trying to save the housing market with all sorts of ideas to ‘spur buying.’ Nevermind that Americans as a whole NEED to save more, to pay off their debts before taking on new debt.
Apparently, in America, when the going gets tough in the market… the market no longer is allowed to sort itself out. Whatever happened to laissez faire economics? I’m not saying letting the market sort itself out would be fun – I think it would hurt most of us quite a bit, but it needs to happen. Besides, either you believe in it, or you don’t. And I do.
The Pointy Stick 