NEW YORK, New York --Bad news loves company, eh? While the Republitards keep up their thuggery to get all of the spending -- i.e., the stuff that works -- cut out of the stimulus, they wield a knife in one hand and spoon on horrible additions with the other.
The Times reports tonight that the Republitards hope to "address the recession" by throwing $15K at anyone dumb enough to buy a home now. It's like the opposite of survival of the fittest -- encourage people to do the dumbest thing they could right now. It makes me hope that Washington, DC, will flood not only with unemployed graduates looking to join Obama's administration but also with some goons looking to push Mitch McConnell into the Capitol's choicest puddle.
McConnell and the Republicans continue to meddle with a stimulus package that Americans support 2 to 1, and the Democrats seem to roll over like the Obama's dog-in-waiting. Congress needs to get it into its collective head: encouraging people to take on more assets they can't afford is NOT a solution. The solution is creating work so they actually have some income. Ok, so we now encourage people who can't afford to buy homes to buy homes because they get $15,000 in subsidies. That's maybe 5-10% off the sticker price. If you can't afford a mortgage on $250,000, you probably can't afford $235,000.
One of the big problems now is that there are too many homes -- there's a 13-month inventory. If you can't get that down to 7 months, the problem won't go away. Government should start paying construction firms NOT to build homes and start demolishing them, not encouraging people to buy them.
Moreover, contrary to both Dem and Republican conventional wisdom, home ownership is not in itself an innate good. Especially in times of recession, distorting markets to force more people than is natural to buy homes is a shit idea: It means the labor market is much less flexible as people are tied to their home. In a poor economy, you want to give people maximum flexibility so they can head to the jobs they're qualified for, wherever they may be. Don't encourage people to stay in Cleveland or LA for that matter if the jobs are in Phoenix (or Flint for all I know). Idiotsidiotsidiots. Is there an enlightened nation (Lilliput? Laputa? Eldorado? Canada?) that can pleaseprettyplease invade the US South?
P.S. When someone gorges themself on Mal-o-mars, do you pay them to eat more? That's probably the aptest analogy I can think of with trying to reinflate the housing bubble. There are too many houses, and there's no underlying demand for them in a normal credit environment. Propping them up seems akin to Japan Syndrome -- there is no plan to create a "bad bank" or nationalize the banks to cough up the poison they've got, nor is there a willingness to let house prices hit a bottom the market supports. Until we recognize the losses, it'll be a long, hard climb to move on. Obama and the Democrats were elected to take action, and they seemed to want to do that. Instead, they seem to be mucking about and overly willing to bring themselves down to the level of John Boner. They need to return to Earth.
As a couple of former reporters who worked and lived in Russia, we created this blog in response to a worrying lack of expertise and critical analysis in the reporting on Russia by the English-language press. That is why we named the blog after Walter Duranty, a New York Times reporter posted in the Soviet Union during the 1930's. He wrote glowing reports about Stalin's show trials and the disastrous collectivization drives. Somehow, these fabrications won him a Pulitzer Prize. So we try to provide our own expertise and opinions about Russia to make sure another Duranty doesn't slip through the cracks. Russia can be a disheartening place, so more often than not, you will find we divert from our original purpose to take up other subjects and causes that are of interest to us - we hope they are of interest to you, too.