Civitas Review Online

We’ve seen it time and again. Government creates a mess, then offers itself as a solution, (using other people’s money, of course).

Healthcare:

Government creates a massively distorted, overprices (and going up) socialist patchwork of a health care system, then wants to help it out by "sharing the burden" with full-tilt single-payer socialism. Medicaid and Medicare will go over a cliff in about 15-20 years, no matter what, because the unfunded liability is massive. 45 million uninsured because they can’t afford it. The crisis will be orders of magnitude bigger than what’s going on today in the mortgage industry. The left celebrates the status quo while incrementally pushing us towards the precipice. Left blames greed and the market for government failure.

Mortgages & Lending:

Government creates a massively distorted, over-valuation bubble through "flexible lending standards," GSEs like Freddie and Fannie, and a tax code that encourages over-investment in real estate — all of which causes a bubble. Economists warn the government back in the late 1990s about bad risk practices–particularly the Community Reinvestment Act, then industry passes the built-in bad debt around like a bag of stink. Now we’re in a meltdown. Government wants to rescue the banks after pushing them into insolvency. (See this terribly disturbing related story about Wachovia.) Left blames greed and the market for government failure.

The common thread? Government causes a Lorenz-like perturbation in the system, then the perturbation grows into a Tsunami. Government handmaidens point to government mistake and blame the market. People believe big lie. The lesson? Get government out of… well, everything.
-Max Borders

Obama says we should let illegals into the N.C. community college system.

A bunch of my favorite minds on the bailout. (Munger’s in there too.)
-Max Borders

(Update: More sanity on the bailout; plus here, and here (honest uncertainty) and here fed up with inadequate metaphors.)

Apparently, Bev Perdue would like to give Hugo Chavez-type powers to the governor during times of ‘crisis.’  According to Under the Dome, Perdue says:

"The governor needs the power to be able to respond," Perdue said in a telephone interview. "The governor would have been able to work with other governors in other states who might not be having the challenge or work with distributors…to make sure trucks could be moved from one place to another."

I hope the electorate is clever enough to see that gouging laws and other 70s-style energy policies have been partially responsible for the problems we’re seeing with N.C. gas stations running out (which doesn’t happen when prices accurately reflect scarcity). But more to the point: how the heck does Beverly Perdue think she or any governor can do better than a distributed system of prices (reflecting supply and demand)? What sort of power grab is this? Which areas deserve fuel more than others? Would she make sure gas got to Tony Rand’s and Marc Basnight’s districts?

She didn’t go into that kind of detail. Politicians usually don’t.
-Max Borders

This Youtuber thinks he’s found the origins of this financial mess. (Hint: it ain’t "deregulation".)

Pass local immigration reform …

Prince William County, Va., did in 2007.

The result:

47% decline in uninsured births at Potomac Hospital in eastern Prince William County.
33% decline in uninsured births at Prince William Hospital in Manassas.
10% decline in uninsured emergency room visits at Potomac Hospital.

Read more here.

And don’t forget to check out our recent interview of Prince William County Supervisior John Stirrup.

Anti-"gouging" laws are causing filling stations around the state to run out. But nobody mentions that in this article. Now that prices are being set by idiotic bureaucrats, we can expect more of this.
-Max Borders

Tony Woodlief nails it:

For those of you who lack the advanced financial expertise necessary to decipher news surrounding the current mess, I’ve interviewed an expert to help us make sense of the headlines.

Q: How did we get into this mess?

A: Two entities created and overseen by Congress, Freddie Mac and Fannie Mae, flooded the mortgage market with cheap, taxpayer-backed money. Plus millions of Americans accepted the crazy idea that it’s okay to finance more house than you can really afford, using 95/5 and even 99/1 mortgages. It was a toxic mix of incompetence and greed.

Q: Doesn’t Wall Street have some culpability here?

A: Didn’t you hear that part about incompetence and greed? Besides, “Wall Street” is an abstraction. It’s kind of like The Force in Star Wars, or . . .

Q: Congressional oversight?

A: Exactly.

Q: What’s the government’s plan to fix this mess?

A: They’re going to buy all the troubled assets, and then create lots of rules that give them more authority to oversee financial institutions.

Q: You mean oversight like the kind that encouraged Freddie Mac and Fannie Mae to back millions of housing equivalents of the Bridge to Nowhere?

A: You got it.

Q: How does the average American get in on this “buying of troubled assets” deal?

A: It’s simple: you either need to be the overpaid CEO of a firm that stupidly overleveraged itself in marginal mortgages and their derivatives, or one of those home speculators who bought three houses in Florida hoping to flip them, and is now claiming to have been misled, abused, etc.

Q: What about those of us who only bought a house we could afford, and have been working diligently to make payments?

A: Well, you’ll have to work a little harder to bail out the rest of us.

Q: It sounds like we’re rewarding the guilty and punishing the innocent.

A: Welcome to Washington.

While pulling into a parking lot this morning, I saw this car. Just thought it was amazingly ironic given the controversy this week surrounding Lt Gov Perdue’s fundraising from DOT members.

Russell Roberts stands athwart the calls government for regulation and bailouts and yells: look in the mirror, government. Check out this piece and consider this quote:

Both presidential candidates will promise a risk-free world with high returns. But peddling that fantasy is the cause of the current crisis. We treat our children this way–we do our best to insulate them from harm and still allow them to grow. I’d like politicians to treat me as an adult, paying the price for my recklessness and reaping a reward when I am prudent. Returning to that world, the world of markets, is the beginning of a return to stability.

The leftists are using the meltdown to blame capitalism, but the government they love let the greedy and regulators collude, which would not happen in an "organic market." In this NPR radio segment (starting at about 18:20) Russ begins to explain that we can’t spend other people’s money and expect the incentives not to let rational self interest turn into greed without risk.
-Max Borders