NC Libertarian Senate candidate Chris Cole on the mortgage bail-out

When you're running on a shoestring in the margins between Libby Dole and Kay Hagan, any notice is good notice, and I can only hope that Chris Cole's piece in the Huntersville Herald gets picked up by more North Carolina media.

Not being a gold bug, I am ambivalent about Cole's belief in the gold standard, but his analysis of the current Fannie Mae/Freddie Mac bail-out is right on point:

No wonder the government no longer issues gold certificates, and no wonder our savings rate has fallen to about one-half of one percent. It is against self-interest to hold money that is worth less the longer you hold onto it.

Thus, we have the setup for our current credit and foreclosure crisis.

When money is saved, its owner intends its use in the future, and the bank uses it to make loans, which are used for tasks such as the creation of new businesses. More savings mean lower interest rates, which, in turn, send a market signal for businesses and individuals to invest for future demand. The real interest rates based on savings have been replaced by artificial signals from Federal Reserve-set interest rates, along with home- and land-ownership incentives by government. The result has been a market expectation of future increases in demand for homes and land, and thus, a real-estate price bubble. All of which was fine, as long as there was an actual demand in the future. What has happened is that demand no longer matches the fake interest signal, and the housing bubble has burst.

The solution offered by politicians, such as Republican Sen. Elizabeth Dole, is to pump Federal Reserve loans into Fannie Mae and Freddie Mac companies to finance more loans for folks who couldn't otherwise qualify for them, setting up another housing bubble and more foreclosures rather than fewer. Quick fixes can always be expected to result in long-term problems.

The long-term solutions are harder.

And I'm also in complete agreement with one of his preferred solutions:

Phase out government programs that subsidize home ownership. This must include setting a date for the revocation of the charters of Fannie Mae and Freddie Mac (I suggest four years), so that they will cease sending false market signals, without stranding current buyers and sellers.

That one's tough medicine. A lot of people will have the knee-jerk reaction that first-time home-buyers wouldn't be able to get into houses without government subsidies. But that's primarily because they have to compete with other buyers using government subsidized loan instruments.

None of that is the point, however. The point is: Chris Cole is yet another Libertarian candidate in North Carolina who is broadening the political debate. Even voters and candidates who disagree with his solutions have a better range of choices because he's there.

The Obligatory Libertarian Tax Day Post

The most disturbing factoid that I learned on Tax Day was that the average American must now spend a full twenty-four hours filling out tax forms. That's three work days. Or, think of it this way: if you had to put in two hours per night after dinner to finish your taxes, that's two weeks (with Sundays off). I saw a talking head economics professor on some Philly TV channel pontificating about how Americans procrastinate. He was laughing. The IRS guy they interviewed actually said, "Tick, tick, tick." You have to wonder if Governor Ruth Ann Minner and her cohorts put in twenty-four hours pondering whether or not to give Kraft Foods $708,000 of our State taxes while demanding that school districts return $8-10 million each?

New Warfare: I started my posts with a discussion.....

.....on Unrestricted warfare . The US Air force Institute for National Security Studies have developed a reasonable systems approach to deter non-state violent actors who they label as NSVA's. It is an exceptionally important report if we want to deter violent extremism and other potential violent actors that could threaten this nation and its security. It is THE report our political officials should be listening to to shape policy so that we do not become excessive in using force against those who do not agree with policy and dispute it with reason and normal non-violent civil disobedience. This report, should be carefully read by everyone really concerned with protecting civil liberties while deterring violent terrorism and I recommend if you are a professional you send your recommendations via e-mail at the link above so that either 1.) additional safeguards to civil liberties are included, or 2.) additional viable strategies can be used. Finally, one can only hope that politici...

More of This, Please

Or perhaps I should say, "Less of this one, please." Or how about just, "None of them. Ever again. Please....For the Love of God." Sunshine State Poll: Grayson In Trouble The latest Sunshine State/VSS poll shows controversial Democratic incumbent Alan Grayson trailing former state Senator Dan Webster by seven points, 43 percent to 36 percent. A majority of respondents -- 51 percent -- disapprove of the job that Grayson is doing. Independents have an unfavorable view of him as well, by a 36/47 margin. Grayson has ignored the conventional wisdom that a freshman should be a quiet member who carefully tends to the home fires. The latest controversy involves his " Taliban Dan " advertisement, where he explicitly compares his opponent to the Taliban, and shows a clip of Webster paraphrasing Ephesians 5:22 -- "wives, submit to your husbands." An unedited version of the clip shows that Webster was actually suggesting that husba...

Search This Blog