Rep Bob Etheridge (NC-2) -- Political Preening With HR 5409...

polifrog

Bob Etheridge joined Brad Miller in pushing debt on Americans in Zebulon.

Bob Etheridge is pushing a bill (HR 5409) to guarantee construction loans when the market is already saturated with product.

It you want to buy a home, it is a great time to do so considering the low interest rates, the glut of inventory and battered home prices. All this is true without Bob Etheridge's help. Few are buying, though. The market is saying "no!" to new construction, but Brad Miller, ignoring the economic weather, sees a chance to make it appear he is helping America by making construction loans cheaper with an end result of pushing more product on a recalcitrant market.

It is your money folks; it is your debt; it is the debt of your progeny that Bob Etheridge wants to spend on his appearance in HR 5409.

According to Brad Miller,

We can’t tell 16% of the [Gross Domestic Product] to just hang around and wait for a while, says Miller, referring to the housing industry and its economic output.

Unfortunately, more waiting is just what we will have to do with policies like Brad Miller's and Bob Etheridge's.

The market needs to correct for overbuilding and Brad Miller's HR 5409 will only serve to lengthen the time it takes to correct.

Polifrog is a home builder and is tired of waiting for the market to return. Please, Brad Miller, and please Bob Etheridge, stop tying to reinflate a construction bubble, stop your political preening and let us take our lumps so we can move forward.

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Of course, government should not take the money in the first place...

Why force the inefficiencies of Taxes on the American economy then run the money through the inefficiencies of governance only to give it back again.

The amateurishness of it all leaves one's head spinning.

Bob Etheridge, a grade school economist.




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Rep.Brad Miller -- And His Implementation of Bastardized Keynesian Theory (Part 2)...

polifrog
Over almost a century Bastardized Keynesian Theory has become the Wmap of public spending policy; it has become the dark energy behind our ever expanding national debt, and is at the heart of our current economic malaise.

I previously explored the implementation of Bastardized Keynesian Theory funded through the expansion of government debt. Bastardized Keynesian Theory is not limited limited to governmental debt, though. Our politicians have turned to expanding private debt through government incentives to fund their Keynesian economic pump. Under Bastardized Keynesian Theory it does not matter who takes on the debt that puts money in the hands of those who spend; all that matters is that money gets into the hands of those who fund economic activity.


Both parties participated in this private-debt funded faux growth and each pointed to Keynesian Theory as validation for their leadership.

Democrats did so with a never ending train of government "affordable housing" programs which incentivized private debt, and more importantly, from a Keynesian perspective, put money in the hands of spenders. The wealth generated by the resulting housing boom did not culminate in equity over time. Instead it stimulated economic growth in consumerism, in vacations and similar non investment as people cashed in on their home's equity.

Conservatives for their part pointed to Keynes as well, albeit in a more convoluted fashion. Ask yourself what happened when the push for Keynesian spending through Fannie/Freddie came in conflict with existing regulations. The answer is that those regulations disappeared in a puff of Conservative Keynesian logic called "financial deregulation". This frees financial institutions to more efficiently implement the government's desire for all of us to spend more trough any number of financial magic tricks that really boil down to riskier loans to get more money in people's hands. Through deregulation Conservatives had unwittingly set the Democrat debt dogs of incentivized lending loose on the American people.

Suddenly more people had more money and spent more money - stimulus - but none of this stimulation showed up on the federal budget, instead it now weighs directly on the finances of the citizenry. End result - A privately funded stimulus.

Liberal Keynesian validated incentives and Conservative Keynesian validated deregulation worked in concert to lead to our housing bubble.

Unfortunately, by removing financial regulations Conservatives had upset the Democrat's delicate governance of home lending. Had the regulations not been removed the housing market may not have bubbled over so quickly. Conversely, I believe deregulation would not have been detrimental to the housing market had it not been for the Democrat's incentivized lending programs. It was as though a dam of regulations was holding back a ravenous river of incentivized lending.

Currently each party accuses the other of causing the housing crash. Democrats point to financial deregulation while Conservatives lay blame on government intervention in the housing market. The reality is that each party is tugging at different parts of the same animal -- Bastardized Keynesian Theory.

For the American people it is called impoverishment.



End of Part 2 of 3
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Is There No Place to Hide From a Deflating Credit Bubble?

polifrog


During the market crash in late 2008 and the ensuing government measures I wondered: Inflation or Deflation? The actions seemed inflationary at the time. This clearly has not been the case... If the deflationary pressures are great enough, can the Federal Reserve actually win a deflationary battle and more importantly can the Fed win a war of attrition with deflation.

Via SafeHaven .com:

The CRB quantifies the fact that ill-conceived money printing and socialization of "too big to fail" investment losses generated almost zero economic traction, and that the "coordinated" monetary effort can only be characterized as a failure of historic proportions.

...

Why did this central bank effort fail so spectacularly? Why not one hint of hyperinflation? Simple. The credit bubble was imploding (and continues to implode) and credit losses sustained worldwide faster than the sum total of all additional artificial money created.

The normal economic stabilizers have been firing full throttle for nearly two years, and some of the propping up of home prices through purchasing incentives and Fed induced low interest rates through Quantitative Easing are coming to an end. The gains have been minimal and the fact that the fuel behind the stabilizers is running low has to make one wonder...what next?

Real estate's own relief rally has been built on historically low interest rates, massive government subsidy including socialization of mortgage losses, socialized refinance giveaways and buyer tax incentives, the banking industry's wink-nod holding off on foreclosures ("extend and pretend"), and the corporate media's daily hypnotic suggestion ("you're getting sleeeepy") that the bottom is in. But take a moment to ponder this: What if mortgage interest rates stood at even 8 or 9%, Federal and state real estate tax incentives never existed, the Fed and Treasury left mortgage debt issues to the market to contend with and foreclosures were brought to market without delay? The answer is that values would probably have sustained another 50% haircut right off the top. But governments can only prop up markets temporarily; in the end, it's all about gravity. Finding a true free-market bottom will be a slow and painful process, and history will show that everything the government and policymakers attempted to do to keep the bubbles afloat ended up making everything that much worse.

The Great Depression had a second leg down......





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