Friday, August 10, 2007

Hillary Clinton's Billion-Dollar Housing Bailout and Economic Illiteracy

Add Hillary to the bipartisan list

Your cost: $2 billion

Hillary Clinton showed that she has no idea what she is talking about but wants to spend at least $1 billion of your money doing it.

Hillary’s subsidy to the rich (tax cuts for rich bad, but subsidies for rich good?)

Hillary Clinton proposed a federal government $1 billion fund of your tax dollars to bailout home-mortgage delinquents, banks, and Wall Street investors (since the mortgage payment goes to the banks and investors).

Her website's 8/7/07 press release appeared to call for a second billion-dollar fund, for a total of at least $2 billion.

Hillary’s economic illiteracy

Clinton began to show her misunderstanding of basic economics in her CNBC interview by praising the recent tightening of lending standards as a way to prevent foreclosures, even though tightened lending standards do the opposite and will increase foreclosures in current conditions.

She announced in her website's 8/7/07 press release, "If I were President, I would . . . increase the supply of affordable housing." Apparently, she has no idea that (1) it is the currently huge housing inventory (supply) that contributed to the housing crash and foreclosure problem (lower home values, new homes available cheaper than an over-indebted seller's mortgage), and (2) market crashes automatically make housing more affordable (prices drop) but her bailout policies will prop up inflated prices and keep housing less affordable.

She apparently cannot decide whether she wants housing to be less expensive or more expensive because moments later her press release declared war on lower home prices, "To make matters worse, home prices are weakening."

Hillary’s elitism: “Let them eat cake”

Clinton started the patented family sob story in her CNBC interview but then showed more confusion by also stating that it was good that fewer low-income people can get loans because low-income people getting loans contributed to the housing bubble. She asserted that some people "just had no business getting into homeownership.”

It certainly was unwise for people at all income levels to take as much credit as anyone would give them but Clinton seems unable to decide whether she wants to increase the high liquidity that caused the housing problem (her $2 billion bailout) or decrease liquidity and restrict credit.

Hillary can’t spend your money unless you mail it to her

Clinton quickly followed her interview's “struggling family” routine with her other concern, “but it's also about the impact that this is having, and could very dramatically, have on our economy going forward." Remember that a bad economy decreases tax revenue to the government and many politicians do not like it when you send less money to fill their coffers--so stay at your galley oar.

Hat Tip: Another F#cked Borrower

1 comment:

Anonymous said...

Your blog clearly shows that some people interpret information differently. Clinton did praise the tightening of the lending standards, which will help with foreclosures because the loose standards are the reasons why people are foreclosing. Although this is compounded by the high unemployment rates and other issues that we are facing as well.

So before you get all prepared to poor someone a tall steamy cup of "STFU", I think you should take a step back. Breath deeply, and then proceed to type out your "rah rah" soapbox presentation.