The House is scheduled to vote this evening on a fiscal 2012 “minibus” packaging of three appropriations bills (Agriculture, Commerce-Justice-Science and Transportation-HUD) agreed to in conference on Monday. It includes a continuing resolution to keep the government funded through December 16th, thus avoiding a government “shutdown.”
The words “bipartisan” and “commission” usually send a chill down my spine. I felt such a chill when I learned that the Bipartisan Policy Center (BPC) had formed a Housing Commission to “address the long-term challenges facing a struggling housing sector.” My initial reaction was confirmed when I read that it would be chaired by former government officials and politicians of the establishment type:
In case you missed it, President Obama gave a big speech out in Las Vegas about both his “jobs” plan and a new plan to help underwater borrowers re-finance their mortgage.
Over at Cato’s blog, my colleague Mark Calabria calls out Nobel economics prize winner Joseph Stiglitz for ignoring his own little role in the economic downturn:
The Indianapolis Star recently ran an article on a relatively wealthy county in Indiana that has received $3 million in HUD Community Development Block Grant funding since 2005. I lived in Hamilton County for three years and it has a well-deserved reputation in Indiana as being the home of the state’s hoity-toity. I don’t believe the federal government should be subsidizing community development for any locality, but subsidizing wealthier areas of the country is extra ridiculous.
The Washington Post is reporting that President Obama has assigned his staff with the task of designing a new set of government guarantees behind the U.S. mortgage market. Although as the Post also reports the “approach could even preserve Fannie Mae and Freddie Mac.” That’s correct. Despite their role in driving the housing bubble and the already $160 billion in taxpayer losses, President Obama appears to be considering just putting the same failed system in place. Of course, we’ll be promised that it will all work better this time.
When government officials come up with what they claim to be a wonderful new idea, I often think of an old Saturday Night Live skit from 1990 poking fun at commercials for blue jeans. The skit’s scene is a group of middle-aged buddies getting ready to play basketball in their new “Bad Idea Jeans.” Each guy optimistically announces a plan to do something that is actually a “bad idea.” For example, a character says “I don’t know the guy but I’ve got two kidneys and he needs one, so I figured…” and “BAD IDEA” flashes across the screen. (The skit can be watched here.)
On Tuesday, Case-Shiller released their monthly housing price index. Surprise, it fell by 4.2% in the first quarter of 2011. I’ve been predicting a decline of about 6% over the course of 2011 (might need to adjust that). Of course, this should come as no surprise. We’ve spent the last couple of years trying to re-create the bubble, with little success.
A year-long investigation by the Washington Post into the Department of Housing & Urban Development’s HOME affordable housing program uncovered systemic waste, fraud, and abuse. The tale is yet another example of why the federal government should extricate itself from housing policy and allow the states to chart their own course.
Local officials, like their federal and state counterparts, spend other people’s money. Policymakers are naturally unlikely to spend other people’s money as carefully as they would their own. This situation is exacerbated when local officials spend money obtained from federal taxpayers. At least when local taxpayers foot the bill, they have an incentive to keep an eye on how their money is spent. That incentive is largely nonexistent when the money comes from Washington.