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>>And fire all the bankers. They aren't fulfilling their part of the social contract and investing in improving the future. We found that out in 2007 and the si

>>And fire all the bankers. They aren't fulfilling their part of the social contract and investing in improving the future. We found that out in 2007 and the situation will keep getting worse until incompetent financiers start losing money. The state administers the largest corporate welfare program in the economy via government-guaranteed mortgages. It guarantees nearly $2 trillion worth every year, which the banks naturally buy as they are risk-free income. So there's no need to fire the bankers. Just stop meddling in the economy with these sophomoric interventions, whether it's GSE mortgage guarantees, or the FDIC: https://www.nber.org/papers/w22223 https://www.nber.org/papers/w22223

Pet_Ant 6y ago
> The state administers the largest corporate welfare program in the economy via government-guaranteed mortgages. It's easy to make an efficient economy, it's harder to make one that produces results that are morally acceptable. How do you propose making housing feasible to most people? I mean it's easy to make a society more efficient by eliminating those with special needs as well, we know that, we just don't want it.
- seiferteric 6y ago
  Does it really fix the issues though? The way I see it, these sort of interventions just trade short term (corrective) pain for long term disasters. I often wonder how much houses would cost if mortgages were not guaranteed, I would think a lot less, the same goes for student loans.
- CryptoPunk 6y ago
  Ceteris Paribus, efficiency is more morally acceptable than inefficiency. Not giving banks a huge unearned subsidy, and not destabilizing the financial sector with government-engineered bubbles, is more morally virtuous than the alternative, IMHO. As for housing, plenty can be done to make it more affordable, without doing grievious economic harm by disrupting normal market activity on a massive scale. For example, reverse the expansion of land-use restriction in high productivity metropolitan zones: https://eml.berkeley.edu/~moretti/growth.pdf https://eml.berkeley.edu/~moretti/growth.pdf

Pet_Ant 6y ago

> The state administers the largest corporate welfare program in the economy via government-guaranteed mortgages. It's easy to make an efficient economy, it's harder to make one that produces results that are morally acceptable. How do you propose making housing feasible to most people? I mean it's easy to make a society more efficient by eliminating those with special needs as well, we know that, we just don't want it.

seiferteric 6y ago
Does it really fix the issues though? The way I see it, these sort of interventions just trade short term (corrective) pain for long term disasters. I often wonder how much houses would cost if mortgages were not guaranteed, I would think a lot less, the same goes for student loans.
CryptoPunk 6y ago
Ceteris Paribus, efficiency is more morally acceptable than inefficiency. Not giving banks a huge unearned subsidy, and not destabilizing the financial sector with government-engineered bubbles, is more morally virtuous than the alternative, IMHO. As for housing, plenty can be done to make it more affordable, without doing grievious economic harm by disrupting normal market activity on a massive scale. For example, reverse the expansion of land-use restriction in high productivity metropolitan zones: https://eml.berkeley.edu/~moretti/growth.pdf https://eml.berkeley.edu/~moretti/growth.pdf