Quote:
Originally Posted by gldstwmn
Okay. Now bridge that to your point about being further to the right than W and I think we're finally getting somewhere.
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Um, I did, I just don't think you understood what I said. His position was for a federal takeover of a private company and I just made the argument that governmental takeovers of private companies cause economic imbalances that disrupt market efficiency. Free markets are a right wing position and government controlled necessities (with little to no price elasticity or substitute goods) such as housing would be a left wing position. Given that the takeover was by way of purchasing preferred stock instead of by discounted debt, it was a half-assed attempt at federalizing a partially federalized company. My answer is to let it collapse and let other companies buy out the assets, or have the government assist in starting a new company or hold auctions to sell off the mortgages with strict rules about not changing existing terms. Doing this would be a free market position, which is what I would recommend. Letting the housing market fail would bring home prices down to levels where average people could afford them again, which would result in another boom, only one that is sustainable. Anything short of that is propping up artificially inflated prices, which causes overages and surplus supplies; IE lots of unsold homes. Doing what they are doing is tantamount to a price floor. Price controls are never efficient. You either have surplus supply or shortages, depending on whether you had a price floor or ceiling, respectively. Keeping interest rates low, while propping up high prices is a recipe for disaster. It devalues the dollar and causes excess housing supply.