In today’s New York Times, the new Nobel laureate Paul Krugman proves that he either should give his medal back, or that the Nobel committee is populated by a bunch of liberals. He claims that the answer to our current economic problems is deficit spending—as if more federal spending is going to change the un-competitive nature of America’s economy.  The federal government has neither the resources nor the expertise to do such a thing, and it annoys me that so many people think it does.

On the other hand, there’s a lot the federal government can do for the economy. It can provide extended benefits to the unemployed, which will both help distressed families cope and put money in the hands of people likely to spend it. It can provide emergency aid to state and local governments, so that they aren’t forced into steep spending cuts that both degrade public services and destroy jobs. It can buy up mortgages (but not at face value, as John McCain has proposed) and restructure the terms to help families stay in their homes.

And this is also a good time to engage in some serious infrastructure spending, which the country badly needs in any case. The usual argument against public works as economic stimulus is that they take too long: by the time you get around to repairing that bridge and upgrading that rail line, the slump is over and the stimulus isn’t needed. Well, that argument has no force now, since the chances that this slump will be over anytime soon are virtually nil. So let’s get those projects rolling.

About the only thing I can agree with is some infrastructure spending—our nation lags behind in that respect and it is one of the few things I think the government is good for.  We might as well do it at this time since it could indeed help some folks who can’t find other work, and provide a small stimulus to the economy while we invest in our future.

But infrastructure spending should not be seen as a way to ‘fix’ the economy—it won’t. The New Deal did not end the Great Depression, WWII and massive deficit spending did. But we should not continue to borrow from future generations to prop up a limping economy. The government can inject borrowed money into a failing economy, but it cannot create a sustainable one.

We are experiencing a massive market correction and reallocation of capital. We must let the market do its thing, and we do not need the government coming in to distort values. We are in for tough times no matter what we do, but we will be much better off in the long run if we keep the government out of the market. You would think the winner of the Nobel prize in Economics would understand that.

Iowahawk captures perfectly my feelings on the housing crisis. Makes sure to read the whole thing.

When I opened the mail on November 1, everthing started to go downhill. For some reason my house payment had gone up by $700 per month! There was no way I was going to squeeze that onto my plastic. I thought that maybe it was some sort of fat-crazy-chick revenge thing from Linda, so when I called First Coralville to complain I asked to talk to her supervisor. “No, it’s not a mistake,” says the guy. “You have an adjustable rate mortgage, and it adjusted.”

“Ex-squeeze-me?”

“Adjustable rate mortgage, A-R-M,” he says. “After the first 6 months, it adjusts up to the prevailing interest rate. You should have realized that, because it’s all there in your contract.”

Who am I, fucking Oliver Wendell Smallprint? I thought ARM meant “always ready money.” I told the dude there’s no way I could pay.

“Have you considered refinancing?” he says.

Duhhhh! I had forgotten that another three months had passed since my last home equity loan, so I hopped into the new Benz and drove to First Coralville to collect my quarterly Fifty Large. But when I got there he starts giving me a big song-and-dance.

“I’m sorry Mr. Burge, you don’t qualify for home equity financing,” he says. “According to the latest appraisal, the value of your home has dropped $500,000. In fact, the value of every home on your block has dropped an average of $200,000 since April.”

“WTF??”

“I’m sorry Mr. Burge, home prices in your neighborhood have been hurt by the national housing bubble, and a steep increase in crime and noise.”

“Well, what am I supposed to do now?”

“Have you considered moving to Lakewood Mobile Home Court? It’s very affordable, and the whole neighborhood has undergone an amazing renaissance this year.”

Ever since that day, its been a non-stop job dealing with the phone calls and certified letters and eviction notices. I keep throwing them in the garage behind the Benz and the dirt bikes, but I get the impression these guys are serious. I put up some official-looking “Smallpox Quarantine” signs on the front plastic sheet, but I don’t think they’ll keep the cops away forever. I can’t pay the mortagage, and can barely scrape enough to pay for the $2 million flood insurance policy.

I’ve had a long time to think about it, and it’s finally time to face up to the ugly truth: I’m a victim. A victim of a pernicious system that entices innocent borrowers with 5000 square foot homes and free money and Igloo coolers, only to bury their dreams under a bunch of APR-ARM-XYZ shyster bullshit gobbledygook.

But the blame doesn’t rest completely with First Coralville; ultimately, the resposibility lies with our government, and society itself. Because it was you that elected the politicians that allowed this stupid crisis to happen, and continue to sit idly while victims like me lose our American Dream.

But it’s not too late to make amends: contact your local elected officials and demand that they do something to alleviate our suffering. Demand an end to ARMs, and demand subprime do-overs. If we don’t act now, the entire economy will collapse, and people like me — and my children, and my dirtbikes — will be out on the streets looking for a new place to live. Maybe in your neighborhood.

Christian Charity Raising Money To Feed Non-Gay Famine Victims

Apparently there has been a decrease in the amount of chronic homeless people.

Advocates for the homeless said they expected a decrease on the national level, given the government’s increasing emphasis on permanent housing instead of temporary shelters.

Since this is being done at the city level I don’t object to it. If you are going to deal with the homeless it needs to be done at the city level. Should this become a federal program then I will disagree with it strongly.

My left leaning readers should get in line at the tobacco store to play their part in providing infrastructure for poor kids.

Smoke it up.

I was under the impression that after a natural disaster the only way the region can recover is by massive federal intervention. But then I read this about Hoover when he helped with the Mississippi flooding:

In early 1927, the Great Mississippi River flood broke the banks and levees of the Mississippi River. Although such a disaster did not fall under the duties of the Commerce Department, the governors of six states along the Mississippi specifically asked for Herbert Hoover in the emergency, so President Calvin Coolidge sent Hoover to mobilize state and local authorities, militia, army engineers, Coast Guard, and the American Red Cross. He set up health units, with a grant from the Rockefeller Foundation, to work in the flooded regions for a year. These workers stamped out malaria, pellagra, and typhoid fever from many areas. His work during the flood brought Herbert Hoover to the front page of newspapers almost everywhere, and he gained new accolades as a humanitarian. The great victory of his relief work, he stressed, was not that the government rushed in and provided all assistance. Rather, it was that much of the assistance available was provided instead by private citizens and organizations in response to Hoover’s appeals. “I suppose I could have called in the Army to help,” he said, “but why should I, when I only had to call upon Main Street.”

Wait so people are capable of repairing their homes and towns without the federal government providing massive funding. Surely you jest.

Turns out to be a bad idea.

Read even a portion of this painfully left leaning piece on how the corps of engineers totally screwed up the levee system in New Orleans and then tell me how pumped you are to let government manage everybody’s health care.

NEW ORLEANS STILL MIGHT HAVE FENDED off Katrina if its levees hadn’t played matador defense. After Hurricane Betsy pummeled New Orleans in 1965, Congress assigned the Corps to protect the city from a 100-year storm. The agency’s first mistake was calculating that 100-year event as a modest Category 3 hurricane, even though Betsy had been a 4, and the National Weather Service later proposed a more severe 4. The Corps then made such egregious engineering errors that it wasn’t even ready for a smaller storm. For example, its levees sagged as much as 5 ft. (1.5 m) lower than their design because the Corps miscalculated sea level and then failed to adjust for subsidence. Some were built in soils with the stability of oatmeal. “These were inexcusable, lethal mistakes,” says University of California, Berkeley, engineering professor Robert Bea, who led a post-Katrina investigation for the National Science Foundation. The Corps also built most of its levees around swampland, a conscious effort to promote the development of low-lying subdivisions like New Orleans East. That no longer seemed like such a good idea after New Orleans East went underwater during Katrina. “That should be the first lesson: build levees around people, not around wetlands,” says Paul Harrison of Environmental Defense.

The basic problem is that protecting New Orleans from deadly storms was never anyone’s top priority. That’s why the city’s main hurricane project was 37 years behind schedule when Katrina hit. Louisiana’s congressional delegation steered Corps funds toward boondoggles that had nothing to do with flood protection, like a $2 billion effort to channelize the Red River for barges that never materialized. Stingy local officials actually helped scuttle a Corps plan to build pumps and floodgates along Lake Pontchartrain, a plan that could have prevented much of Katrina’s flooding. “We can beat ourselves up about the past–or we can use the past to do business differently in the future,” says Corps Colonel Jeffrey Bedey, who is now overseeing construction of, yes, huge pumps and floodgates along Lake Pontchartrain. “I don’t just mean we the Corps. I mean we the country.”

Can’t wait for the ‘corp of health care’ to determine how billions dollars should best be spent on protecting my health. I just hope the legislation will enable even more pork barrel projects than the corp of engineers currently provides.

It’s odd cause some argue that things like education are to important to left up to the markets. The result? High School graduate rates have remained unchanged in thirty years while cost has increase significantly. Over the same period microwaves came into existence and were refined with more features while costing less to produce. In some wired way, by using government to ‘protect’ valuable things in society from free markets what seems to be valued becomes inverted. An outsider comparing education to microwave would have no choice but to conclude we care more about microwaves than education.

It also follows research suggesting that the massive increase in Government funding for daycare provision over the past decade, aimed at helping children to progress more quickly, has in fact hindered their intellectual development as well as exacerbating their behaviour problems.

Huh, who knew? Oh thats right; I did.

This opinion piece is about citizens taking the responsibility of developing infrastructure. Two things to note:

1. Some of my readers are probably crapping their pants. On what justification do they forcibly steal money from what group of people to give to another group of people if that other group no longer needs infratstructure.

2. As you read through the mistakes and errors the local city government made in providing infrastructure, bear in mind thats the same organizational structure some people want to manage health care for everyone.