Joe Doakes from Como Park writes:
If I am funding an agency whose mission is to promote home ownership among low-income clients but a substantial percentage of those clients are losing their homes and thereby ending up worse off than before they started – foreclosed, credit ruined and evicted – at what point should I conclude that the agency is a failure and stop throwing money down the rat-hole?
Joe is referring to the plethora of non-profits whose goal is to promote home ownership among low-income buyers – like this, and this and this.
It’s Economics 101; you can not make something worth other than what people are naturally willing to pay for it without creating unintended, inevitably bad consequences.
Well, it was Economics 101. In the era of Obama and Dayton, I think it must have been dropped from the curriculum to make time for GLBT economic sensitivity training.
I wonder why Indian workers think their homeland has more opportunities than the U.S. does right now:
http://www.baselinemag.com/c/a/Intelligence/Indian-Workers-Returning-Home-811457/
It’s a good thing we had that “recovery summer” before we got back to the business-bashing-bottle, or we’d really be in trouble. 😉
It’s Economics 101; you can not make something worth other than what people are naturally willing to pay for it without creating unintended, inevitably bad consequences.
Even monopolies have limits to revenues; Microsoft has a monopoly on selling Windows. It cant raise the price for Windows higher than what consumers are willing to pay (vs some alternative OS or doing without).
A government’s economic power lies mostly in its power to shift costs from one group of citizens to another. There is a limit to this, but I fear that is is a hard limit rather than a soft limit. Until you hit the limit the ability to take from group A and spend it on group B looks limitless.
Good intentions. Bad outcomes. It’s a recurring theme of liberalism.
For that matter, take a look at what subsidies of all kinds in welfare have done to the inner city, poor rural areas, and such. It ain’t pretty.
(how exactly did Comrade Obama drive into the South Side every day for two decades without ever, apparently, asking “why isn’t all this working out better for these people?”)
The biggest losers in the housing boom and collapse were responsible, middle class homeowners.
The biggest winners were the people who took the housing money during the boom but were insulated from paying the costs of the collapse — irresponsible homeowners who used their homes as an ATM and the big financial firms.
If we just make “the Rich” pay their “fair share” we can keep people in houses they can’t afford. And when the sewer backs up, because they can’t afford RotoRooter, we can levy “the Rich” some more.
It’s only fair.
So the solution isn’t to give or heavily subsidize a house for someone not fit to own one.
But to start basic economics education in elementry school, really educate them in high school, so by the time said person is 30 years old, she will have saved enough money to make a large down payment on the house. Or perhaps a condo.