Thursday, April 02, 2009

To Continue the Ongoing Discussion:

A fair response.

My favorite of your links was the one on Wartime Prosperity. I now agree that it was not WWII that got us out of the Depression. It really didn't end until after WWII was over in 1945. It makes sense that war would not increase prosperity. It channels goods and production capacity away from the private sector. The prosperity came after war production capacity was shifted to consumer production.

I read a fantastic book last week called The Venturesome Economy. I will probably put my analysis up on this blog at some point. The author gives some strong arguments on what increases the prosperity of a society.

I actually agree with your points 3, 4, and 5. Just to back up your links in point 5, here is a link from 1999 that predicted some of the recent economic bailouts. The social science research shows that home ownership is generally good for society. So the policy gurus (in both parties) naturally tried to increase home ownership. They assumed correlation equaled causality. In other words, because people who owned their own homes commit fewer crimes they wanted to make it easier for more to own homes.

A more appropriate causality would be certain stabilizing decisions (like a steady job, controlling debt, pursuing education, etc.) are the cause of both low crime and home ownership. Lowering the standards of home ownership did nothing to prevent crime.

The only objection I have is you relying on Media Matters to refute the accusations against Barney Frank. They are at least as partisan as Rush Limbaugh.

I do agree that appropriate regulation would have prevented much of this mess, but the idea that Barney Frank is guiltless is almost laughable.

Here are a couple of videos:

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