{"id":2375,"date":"2007-12-15T09:20:50","date_gmt":"2007-12-15T16:20:50","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=2375"},"modified":"2007-12-15T09:20:51","modified_gmt":"2007-12-15T16:20:51","slug":"government-interference-will-prolong-housing-woes","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2375\/government-interference-will-prolong-housing-woes\/","title":{"rendered":"Government interference will prolong housing woes"},"content":{"rendered":"

This is my column for this week from the Arizona Republic<\/i> (permanent link<\/a>):<\/p>\n

 
Government interference will prolong housing woes<\/b><\/p>\n

Want to make an economic problem worse? Interfere with it.<\/p>\n

As I write this, the Federal Reserve Bank just cut the Federal Funds Rate by another quarter-point. Why? To try to stimulate the housing market.<\/p>\n

Last week President Bush put together an attestedly voluntary agreement among lenders to freeze interest rates on certain adjustable rate mortgages for five years. The plan is voluntary in the same way that your rowdy Uncle Sid volunteered for the Marines instead of serving 90 days in the clink. Even so, Congress is still rumbling about involuntary solutions to the housing crisis.<\/p>\n

So what’s the beef? Everybody’s just tying to help, right?<\/p>\n

The problem is that all investment is based on planning. Before I risk my capital, I need a reasonable assurance that it will be returned to me — ideally with a healthy profit. There is always some risk in investing, but if the government can change the rules of the game at any moment, then the risk of investing soars. Doing anything else becomes much more attractive.<\/p>\n

Consider: If I plant the right seeds and cultivate them properly, I can expect a bountiful harvest. But if the government were able to control the weather, and if it announced that it might or might not schedule a hard freeze for mid-July, I would be better off doing almost anything other than farming.<\/p>\n

If I have capital available to lend, should I lend it where I know for sure I’ll get five percent interest, or should I lend it to a borrower who will promise to pay me eight percent — until Big Mother cuts that back to four percent as an act of mercy. If it were your money — and in many cases it is, in the form of insurance and pension funds — what would you do?<\/p>\n

It’s plausible that we’ll go through the same amount of economic pain, with or without government involvement. But free markets self-correct quickly, liquidating bad investments and getting back to business. Government interference will almost certainly prolong Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This is my column for this week from the Arizona Republic (permanent link):  Government interference will prolong housing woes Want to make an economic problem worse? Interfere with it. As I write this, the Federal Reserve Bank just cut the Federal Funds Rate by another quarter-point. Why? To try to stimulate the housing market. Last […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,6,5],"tags":[],"class_list":{"0":"post-2375","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-investment","7":"category-marketing","8":"category-real-estate","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1788,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1788\/thomas-sowell-housing-woes-caused-by-land-use-restrictions-and-federal-micro-management-of-lenders\/","url_meta":{"origin":2375,"position":0},"title":"Thomas Sowell: Housing woes caused by land-use restrictions and federal micro-management of lenders","author":"Greg Swann","date":"August 11, 2007","format":false,"excerpt":"Hoover Institute Economist Thomas Sowell:Amid all the hand-wringing and finger-pointing as housing markets collapse, mortgage foreclosures skyrocket, and financial markets panic, there is very little attention being paid to the fundamental economic and political decisions that led to this mess. The growth in risky \"sub-prime\" mortgage loans by people buying\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5485,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5485\/how-the-new-president-is-going-to-prolong-the-housing-bust\/","url_meta":{"origin":2375,"position":1},"title":"How the new president is going to prolong the housing bust","author":"Greg Swann","date":"November 10, 2008","format":false,"excerpt":"This is my column for this week from the Arizona Republic (permanent link). \u00a0How the new president is going to prolong the housing bust I'm writing this before the election, so I don't know who will have won by the time you read this. But here's something I do know:\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5011,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5011\/peter-schiff-our-leaders-irrationally-promoted-home-buying-discouraged-savings-and-recklessly-encouraged-borrowing-and-lending-which-together-undermined-our-markets\/","url_meta":{"origin":2375,"position":2},"title":"Peter Schiff: “Our leaders irrationally promoted home-buying, discouraged savings, and recklessly encouraged borrowing and lending, which together undermined our markets”","author":"Greg Swann","date":"October 16, 2008","format":false,"excerpt":"Peter Schiff in the Washington Post:Amid the chaos of recent days, as the federal government has taken gargantuan steps to stabilize the financial markets, realigning the U.S. economic system in the process, comes a nearly universal consensus: This crisis resulted from government reluctance to regulate the unbridled greed of Wall\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1962,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1962\/is-greenspan-to-blame-for-the-housing-crisis-and-if-he-is-is-this-entirely-a-bad-thing\/","url_meta":{"origin":2375,"position":3},"title":"Is Greenspan to Blame for the Housing Crisis? And, if he is, is this entirely a bad thing?","author":"Greg Swann","date":"September 23, 2007","format":false,"excerpt":"The second half of a US News dyscomium on Alan Greenspan's Fed:The global spread of capitalism has increased inflation-dampening competition throughout the world and allowed investors to accept lower yields when investing in bonds. What's more, globalization has boosted incomes, in Asia and beyond. That has expanded the pool of\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14488,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14488\/housing-might-not-be-a-good-investment-but-its-not-a-bad-hedge-against-inflation\/","url_meta":{"origin":2375,"position":4},"title":"Housing Might Not Be a Good “Investment” But It’s Not a Bad Hedge Against Inflation","author":"Brian Brady","date":"April 26, 2011","format":false,"excerpt":"Debra and I had the good fortune to met Anthony Randazzo at a Reason Foundation dinner last week.\u00a0 Mr. Randazzo published an article today, about real estate as a \"store of value\" (which was consistent with what we've been talking about here on BloodhoundBlog). 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