Does The Housing Market Need More Oversight

housing market

Is Federal Reserve Chairman Ben Bernanke’s new found embrace of financial re-regulation  patently political? It would certainly seem so.

I think the analysis that there wasn’t enough regulation is poppycock. Low interest rates spur real estate investing. It’s a historical fact. Real estate loans increase the money supply.  Another historical fact. Increased money supply stimulates inflation, which benefits real estate investing. Historical fact. The reality of the regulation argument is it passes the blame which is a favorite thing for politicians to do. The easy way to prevent this problem is to have a Fed Chairman who isn’t in a politician’s pocket. Nobody in the Fed had the guts to put the brakes on before it blew up.

There was no “sub-prime mortgage market” before the regulators, i.e., politicians, decided that every (liberal) voter should have a house, regardless of what they earned or their strength of their credit history.

If you create an incentive for people to act irresponsibly with artificially low interest rates, and they do act irresponsibly, who’s fault is it? That’s the real question here. As a parent, if you reward your kid’s bad behavior and your kid behaves badly, who is responsible? Yes, we need more regulation (not).

Actually, we need far less regulation than we have today: less social engineering, less government intervention and less redistribution of wealth. More FREEDOM. More freedom to even make bad choices for ourselves. More freedom to suffer the consequences of our bad choices. The housing bubble was generated by democrats helping their constituents buy homes they could not afford. Then they allowed some to pull cash out of those homes over and above what they had paid. Then in 2008, they changed the tax code to allow no tax liability on debt that has been forgiven equating to free money) Then the government adopted the policy of not chasing after the assets of these people. The government’s job should be solely one of prosecution. Let the free market decide your value to society.                                                  San Diego Realtors