The New York Times had a disturbing story today on one element of the housing bailout plan Rep. Barney Frank (D-MA) plans to have on the floor by Thursday. The heart of Frank’s plan is the authorization of the Federal Housing Administration (FHA) to assume billions of dollars in new risk in order to artificially prop up correcting housing prices. We’ve already covered how dangerous this idea is since the FHA is already teetering toward insolvency due to bad loans just like the ones Frank now wants them to take …
Visiting Heritage scholar Wendell Cox has a new paper out titled “How Smart Growth Exacerbated the International Financial Crisis” in which he praises New York Times columnist Paul Krugman’s prescience on diagnosing the role of land use regulation in driving the housing bubble. Krugman wrote on August 8, 2005: But in the Zoned Zone, which lies along the coasts, a combination of high population density and land-use restrictions – hence “zoned” – makes it hard to build new houses. So when people become willing to spend more on houses, say …
In his latest column, radio talk show host Tom Morgan takes us down memory lane to explain why more, not less, free trade is needed now that the economy is struggling: Some politicians propose moves that could plunge us into another Great Depression. If you think I exaggerate, take some time to read about the last one. One of the biggest mistakes that pushed us into it was when we stifled free trade with other countries. In 1930 Congress passed the Smoot-Hawley Tariff Act. President Hoover signed it.The act was …
In an otherwise admirable editorial highlighting a new report that shows New York City paid 235 teachers $81 million over two years to do nothing, the New York Times includes this paragraph: Under the new free-market system, teachers who lose their jobs because of budget cuts, program curtailments or school closings are supposed to go into a reserve pool for a short time before they are hired elsewhere in the system. An overwhelming majority of more than 2,700 teachers sent into the pool in 2006 did just that. Did the …
Food riots have forced the collapse of the government in Haiti. People are dying in food lines in Egypt. The U.N. warns that food stocks for 450,000 Cambodian children is set to tun out in 30 days. Rising hunger is contributing to instability in Afghanistan. In India, even the gods are going hungry. After more than 30 years of declining hunger, suddenly, this year soaring commodity prices are causing hunger worldwide. The poor are are suffering the most. Some are blaming the food crisis on droughts in Australia and growing …
Sen. John McCain issued a call to action on health care reform today. Despite what some political pundits and liberal critics in the media claim, McCain has it exactly right with his policy proposal. The McCain plan would expand personal, portable private health insurance, not through government mandates or regulations handed down by Washington but by harnessing patient choice and private competition. McCain would establish an alternative beyond employer-based coverage by making it easier for individuals and families to own and keep their health insurance policies without a tax or …
Recently our leaders have told us: The New York Times, April 15, 2008: Representative Jim McGovern, Democrat of Massachusetts, said he had come to realize that Congress made a mistake in backing biofuels, not anticipating the impact on food costs. He said Congress needed to reconsider its policy, though he acknowledged that would be difficult. “If there was a secret vote, there is a pretty large number of people who would like to reassess what we are doing,” he said. The Hill, April 28, 2008: Senate Majority Whip Dick Durbin …
D.C. Mayor Adrian Fenty goes to Capitol Hill tomorrow to testify on President Bush’s proposed budget for the District in 2008. In an editorial today, The Washington Post encouraged Mayor Fenty to support the D.C. Opportunity Scholarship program, which is now helping more than 1,900 disadvantaged kids attend private schools: Political ideology and partisan gamesmanship should not be allowed to blow apart the educational hopes of hundreds of D.C. children. Congress must respect the judgment of District leaders in giving parents a choice in one of the most crucial aspects …
A recent agreement between the U.S. and South Korea on beef imports has some business leaders thinking the U.S.-South Korea Free Trade Agreement may earn congressional approval soon. They should not get their hopes up. The union-owned Congress currently in power has made it clear they will not be approving any new trade deals this session. Politico outlines some of the reasons why American businesses are so eager to get the deal approved: The Korea agreement is the most significant trade pact signed by the United States in 15 years, …
CATO’s Timothy Lee makes a great connection between the absence of school choice in our current education system and the recent housing bubble burst. First he quotes economist Robert Frank in Sunday’s Washington Post: In a well-intentioned but ultimately misguided move to help more families enter the housing market, borrowing restrictions were relaxed during the intervening decades. Down payment requirements fell steadily, and in recent years, many houses were bought with no money down. … The result was a painful dilemma for any family determined not to borrow beyond its …
