Posted by
Andrews on Wednesday, February 04, 2009 8:29:16 PM
As I already wrote a
lengthy "Imitates Me" post today, I will keep this brief. Reading
Thomas Sowell's most recent article, I was happy to find that he agreed with my post "
How To Continue the Economic Problems". Dr. Sowell writes:
Within 24 hours, however, Republicans in the Senate came out with a
plan to have the government fix mortgage interest rates at four
percent-- and use taxpayers' money to cover the losses that lenders
would otherwise sustain.
It is painfully obvious that government intervention in the
housing markets over the past several years has been at the heart of
the boom and bust that has led to a huge economic downturn.
It was not the market, but the government, that pushed for
abandoning traditional standards for making mortgage loans. That was
what got both borrowers and lenders way out on a limb-- and set off
economic shock waves when the limb broke.
Of course, again, this seems common sense to me, but the fact is few seem to have noticed, so I am quite pleased that Dr. Sowell agrees with my analysis of the harm done by the government' efforts to artificially reduce interest rates.