{"id":5244,"date":"2008-10-27T05:00:25","date_gmt":"2008-10-27T12:00:25","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=5244"},"modified":"2008-10-26T23:31:50","modified_gmt":"2008-10-27T06:31:50","slug":"arthur-laffer-the-age-of-prosperity-is-over","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5244\/arthur-laffer-the-age-of-prosperity-is-over\/","title":{"rendered":"Arthur Laffer: “The Age of Prosperity Is Over”"},"content":{"rendered":"

The author of the Laffer Curve in the Wall Street Journal:<\/em><\/a><\/p>\n

When markets are free, asset values are supposed to go up and down, and competition opens up opportunities for profits and losses. Profits and stock appreciation are not rights, but rewards for insight mixed with a willingness to take risk. People who buy homes and the banks who give them mortgages are no different, in principle, than investors in the stock market, commodity speculators or shop owners. Good decisions should be rewarded and bad decisions should be punished. The market does just that with its profits and losses.<\/p>\n

No one likes to see people lose their homes when housing prices fall and they can’t afford to pay their mortgages; nor does any one of us enjoy watching banks go belly-up for making subprime loans without enough equity. But the taxpayers had nothing to do with either side of the mortgage transaction. If the house’s value had appreciated, believe you me the overleveraged homeowner and the overly aggressive bank would never have shared their gain with taxpayers. Housing price declines and their consequences are signals to the market to stop building so many houses, pure and simple.<\/p>\n

But here’s the rub. Now enter the government and the prospects of a kinder and gentler economy. To alleviate the obvious hardships to both homeowners and banks, the government commits to buy mortgages and inject capital into banks, which on the face of it seems like a very nice thing to do. But unfortunately in this world there is no tooth fairy. And the government doesn’t create anything; it just redistributes. Whenever the government bails someone out of trouble, they always put someone into trouble, plus of course a toll for the troll. Every $100 billion in bailout requires at least $130 billion in taxes, where the $30 billion extra is the cost of getting government involved.<\/p>\n

If you don’t believe me, just watch how Congress and Barney Frank run the banks. If you thought they did a bad job running the post office, Amtrak, Fannie Mae, Freddie Mac and the military, just wait till you see what Read more<\/a><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

The author of the Laffer Curve in the Wall Street Journal: When markets are free, asset values are supposed to go up and down, and competition opens up opportunities for profits and losses. Profits and stock appreciation are not rights, but rewards for insight mixed with a willingness to take risk. People who buy homes […]<\/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":[8,26,5],"tags":[],"class_list":{"0":"post-5244","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-investment","7":"category-lending","8":"category-real-estate","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":2560,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2560\/understanding-the-laffer-curve-reality-myth-whats-next\/","url_meta":{"origin":5244,"position":0},"title":"Understanding the Laffer Curve — Reality & Myth — What’s Next?","author":"Jeff Brown","date":"February 2, 2008","format":false,"excerpt":"Being just slightly to the right of Attila the Hun, taxes are of great import to me. I believe in principles long established. One of them is small government works better for its citizens than large government. Lower taxes are better than higher taxes as long as the bills are\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10558,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10558\/manufacturing-inflation-how-art-laffer-got-it-wrong\/","url_meta":{"origin":5244,"position":1},"title":"Manufacturing Inflation (How Art Laffer Got It Wrong)","author":"Brian Brady","date":"December 15, 2009","format":false,"excerpt":"If you've wondered where that inflation was, you might start seeing signs of it today.\u00a0 Economic data released today are a great example of why inflation is a monetary consequence and not an economic one: New York metro manufacturing activity slowed WAY less than expected: Factories in the New York\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17932,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17932\/overnight-news-which-slaves-are-wisest-to-rebel\/","url_meta":{"origin":5244,"position":2},"title":"Overnight News: Which slaves are wisest to\u00a0rebel?","author":"Greg Swann","date":"March 5, 2021","format":false,"excerpt":"I gave this observation to Odysseus a few weeks ago \u2013 opining about the world as an opinionated dog might do: \u201cTo be owned as a pet is to be loved. To be owned as an investment is to be prized. But to be owned as a nuisance is to\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"Ya think it's easy?","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/08\/BHBNewTopImage-300x225.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":11158,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/11158\/a-scary-thought-on-the-non-existent-shadow-inventory\/","url_meta":{"origin":5244,"position":3},"title":"A Scary Thought on the (Non-Existent?) 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