The New York Times waits until after the election to drop yet another bombshell, one which may very well go unnoticed by the rest of the elite media (falling into the memory hole alongside the brief and cryptic reporting on Barack H. Obama's illegal fundraising). Under the headline "Tax Break May Have Helped Cause Housing Bubble"....
Wow, what a great gift President Bill Clinton gave the American people! Except, half a mo... Didn't that staggering "housing bubble" have something to do with the subsequent financial collapse? Well, as a matter of fact, the Times itself now, after November 4th, is willing to admit as such ....
Of course, this being the TImes, they quite predictably get a number of points wrong. There was no "failure by regulators to intervene;" in fact, the "relaxation of lending standards" was precisely in response to Clinton regulators interpreting the 1977 Community Reinvestment Act to require banks to make subprime housing loans to poor people who couldn't possibly afford the mortgage payments.
But they do get the basic point: When government intervenes in the market, the unintended bad consequences often overwhelm whatever good was intended. This is why economist Milton Friedman coined the phrase "the invisible foot" of government as the antiparticle to the "invisible hand" of the market.
....
The Times now thinks this government intrusion was a bad idea after all:
Referring to the special treatment for capital gains on homes, Charles O. Rossotti, the Internal Revenue Service commissioner from 1997 to 2002, said: "Why insist in effect that they put it in housing to get that benefit? Why not let them invest in other things that might be more productive, like stocks and bonds?"
Amusingly, then-Sen. Blob Dole, running against Clinton in 1996, gave a speech that appears to have precipitated Clinton's housing tax-break proposal; but Dole had actually called for an across-the-board cut in the capital-gains tax, without singling out any particular instrument over the others. (Grover Norquist agreed with Dole.) Had Clinton followed Dole's advice, we might very well not be in the current financial crisis.
But, well, here we are. At least, however, we have the enormous satisfaction of seeing the New York Times admit that a Bill Clinton domestic monetary policy was naive and foolish, and give a pretty good explanation -- after the One is safely elected -- why in future we should run our economic and monetary policy on the basis of Capitalism, not liberal fascism. (One wonders whether this new-found fiscal conservatism will ever translate into opposition to specific Obamic policy.)
Better late than never, I suppose; but even better in time than late.
Daffyd is right. This will disappear into the memory hole.
No comments:
Post a Comment