Wednesday, March 18, 2009

False Solutions and Real Problems

By Thomas Sowell
Someone once said that Senator Hubert Humphrey, liberal icon of an earlier generation, had more solutions than there were problems.

Senator Humphrey was not unique in that respect. In fact, our present economic crisis has developed out of politicians providing solutions to problems that did not exist-- and, as a result, producing a problem whose existence is all too real and all too painful.

What was the problem that didn't exist? It was a national problem of unaffordable housing. The political crusade for affordable housing got into high gear in the 1990s and led to all kinds of changes in mortgage lending practices, which in turn led to a housing boom and bust that has left us in the mess we are now trying to dig out of.

Usually housing affordability is measured in terms of how much of the average person's income it takes to cover either apartment rent or a monthly mortgage payment.

There were certainly places here and there where it took half a family's income just to put a roof over their heads. Many such places were in coastal California but there were a few others, here and there, on the east coast and elsewhere.

But, vast areas of the country in between-- "flyover country" to the east coast and west coast elites-- had housing prices that took no larger share of the average American's income than in the decade before the affordable housing crusade got under way.

Why then a national crusade by Washington politicians over local problems? Probably as good an answer as any is that "It seemed like a good idea at the time." How are we to be kept aware of how compassionate and how important our elected officials are unless they are busy solving some problem for us?
Read it all here:

1 comment:

  1. it's awsome how you said that, a solution to a problem that didn't exist. not only were people getting houses beyond their means but it also jacked up the relestate prices for everybody else. a little counterproductive if you ask me. i baught my house right at the the economic crissis and closted oct 08. now i fight just to stay in it being a single guy in a boom town in wyoming. all so some people 3 states away from me could live the 'american dream' with half the work that i myself has to put out.